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Simon, Brookfield complete J.C. Penney deal; Airbnb sees blockbuster IPO

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Simon, Brookfield complete J.C. Penney deal; Airbnb sees blockbuster IPO

S&P Global Market Intelligence offers our top picks of real estate news stories and more published throughout the week.

Retail and retail real estate industry leaders scoured the crystal ball at ICSC's RECon New York conference this week for a clear read on rapidly changing consumer behavior and where the industry is heading post-pandemic.

The economic shutdown in 2020 has generated significant headwinds for even marquee retail real estate names in the U.S., as evidenced by Fitch Ratings' recent move to downgrade regional mall landlord Simon Property Group Inc., with a negative outlook.

Randall McKillop of the retail consulting firm Toolbox Group described the pandemic as an "acceleration and evolution" of trends that were already reshaping the market, as well as a catalyst that may have advanced the industry's maturation by a decade. There likely will be no return to precisely the way retail was just before the economic shutdown in March, he said.

"It isn't really online versus traditional retail [anymore]," McKillop said during a conference panel. "There really is just commerce now. There's this hybrid approach to how consumers engage with retail."

Separately, JP Suarez, Walmart's international chief administrative officer, posited that the days of pure "offline" shopping may be over. "The idea that you're just an online or offline shopper is just gone," Suarez said. "You're an omni shopper now. You're going to see customers shopping multiple ways, so long as you make it easy and convenient and accessible."

READ MORE: Sign up for our weekly coronavirus newsletter here, and read our latest coverage on the crisis here.

Up in the air

* Online vacation-rental company Airbnb Inc.'s shares more than doubled in price in their Nasdaq debut on Dec. 10, opening at $146 apiece. The company recently priced its IPO of 51,323,531 in class A common stock at $68 per share, targeting proceeds of about $3.4 billion.

Mergers & investments

* Front Yard Residential Corp. will convene a special meeting of its stockholders Jan. 6, 2021, to vote on its proposed merger with Pretium Partners LLC and Ares Management Corp. The deal is expected to close in the first quarter of 2021.

* Extra Space Storage Inc. invested $300 million in preferred equity in NexPoint Storage Partners, the new platform formed following NexPoint Advisors LP's take-private acquisition of self-storage REIT Jernigan Capital. NexPoint Storage Partners invests in newly built, multistory, climate-controlled, class-A self-storage facilities — known as Generation V facilities — across the U.S.

Portfolio pieces

* Simon Property and Brookfield Asset Management Inc. completed their acquisition of substantially all the retail and operating assets of apparel and homewares retailer J. C. Penney Co. Inc., which now has access to approximately $1.5 billion of new financing.

* Real estate investment firm Hines and the National Pension Service of South Korea formed a $1.5 billion build-to-core joint venture focused on urban infill property development opportunities globally.

* Facebook Inc. committed $150 million from its $1 billion affordable housing fund to construct at least 2,000 homes for the lowest-income residents of the San Francisco Bay Area in California.

* Public Storage acquired 24 existing assets encompassing 2.3 million net rentable square feet as the first phase of its deal to acquire the Beyond Self Storage LLC portfolio for $528 million. The total portfolio comprises 36 properties spanning 3.6 million net rentable square feet.

Around the world

* The Blackstone Group Inc. is readying a potential sale of a A$3.5 billion portfolio of logistics properties in Australia, The Australian reported, citing sources with knowledge of the deal. The private equity giant will begin a dual-track process for the offering by mid-January 2021 that could also include listing the properties on the Australian stock exchange as a real estate investment trust.

* A fund of EQT Partners AB agreed to sell Germany-based real estate company Apleona GmbH to PAI Partners for about €1.6 billion. The deal is expected to close in the second quarter of 2021.

* Lone Star sweetened its cash takeover offer for U.K.-based retirement community developer McCarthy & Stone PLC to 120 pence per share from 115 pence. The new offer values the entire existing issued and to-be-issued share capital of McCarthy & Stone at about £647 million.

* Swedish real estate company Samhällsbyggnadsbolaget i Norden AB (publ) withdrew its offer to acquire Norwegian peer Entra ASA as the due diligence condition of the offer was not satisfied.

* Carlyle Group Inc. sold a 13-property logistics portfolio in Northern Italy for €270 million to AXA Real Estate Investment Managers SA. The assets total 390,000 square meters.

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