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Simon JV to rescue J. C. Penney; Brookfield seeks $1.3B Simply Self Storage sale

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

While uncertainty still clouds many corners of the commercial real estate market, the worst of the pandemic-generated storms seem to be clearing as business activity slowly resumes.

A team of analysts at Baird noted that investment sales activity in direct real estate "appears poised to recover" given a recent uptick in the signed confidentiality agreements that attend such deals. The rate of year-over-year decline in signed confidentiality agreements is significantly less now than it was earlier in the year — about 17% at the end of July instead of 74% in late April to early May.

"Given the increase in confidentiality agreements and the correlation between public market pricing and confidence in the investment sales market, we anticipate an increased level of price discovery in the months to come," the team said in a Sept. 9 research note.

The industrial and medical office segments are among the property types best positioned for growth, while traditional office and "select" multifamily real estate investment trusts offer the best value, the Baird analysts said.

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

Meanwhile, a trio of retail real estate investment trusts offered cash rent collection data that one analyst read as "encouraging" for the particularly hard-hit retail segment. Each of Acadia Realty Trust, Retail Properties of America Inc. and RPT Realty saw sequential monthly gains in cash rent collection in July and August. Acadia collected 81% of rents in August, while Retail Properties of America collected 77%, and RPT Realty collected 86%.

"It appears to us that the nation's economy is slowly recovering as restrictions are lifted and stores reopen to business," Compass Point analyst Floris van Dijkum said in a Sept. 9 research note.

Retail Properties of America also resumed paying its quarterly dividend, which many retail REITs were forced to suspend as a defensive measure early on in the pandemic.

"Potential additional updates from other management teams over the next weeks should provide ammunition to more bullish positioned investors while dispelling many fears of significant permanent damage from more skeptical capital," van Dijkum said.

Megadeals

* Landlords Simon Property Group Inc. and Brookfield Property Partners LP reached an agreement to acquire department store chain J. C. Penney Co. Inc. out of bankruptcy in a $1.75 billion deal, including debt.

* Three REITs sponsored by Resource Real Estate LLC agreed to merge in separate stock-for-stock deals to create a $3 billion self-managed REIT. Resource Real Estate Opportunity REIT II Inc. will acquire Resource Real Estate Opportunity REIT Inc. and Resource Apartment REIT III Inc.

* Canada's Brookfield Asset Management Inc. is working with advisers to assist it with the potential sale of U.S. self-storage company Simply Self Storage, which could trade for approximately $1.3 billion, Bloomberg News reported, citing unnamed sources.

* Private equity firm TPG is looking to sell mobile home park operator Strive Communities, which could fetch $750 million or more, Bloomberg News reported, citing unnamed sources.

Green zone

* SL Green Realty Corp. is opening its $3 billion One Vanderbilt office tower in New York in the week of Sept. 14, The Wall Street Journal reported. Separately, the office REIT secured a new $600.0 million construction loan for its 410 Tenth Avenue property in Manhattan, N.Y., anchored by Amazon.com Inc. and First Republic Bank.

SL Green is also looking to sell its mixed-use development at 185 Broadway in New York City's Financial District neighborhood that could be worth more than $400 million, The Real Deal reported, citing marketing materials.

Portfolio panel

* Pacific Retail Capital Partners LLC and Golden East Investors won the bid for seven malls owned by Starwood Capital Group Management LLC after the latter defaulted on bonds issued in Israel in spring, The Wall Street Journal reported, citing the new operators. Starwood acquired the portfolio seven years ago for $1.6 billion.

* Artis Real Estate Investment Trust will spin off its Canadian retail properties into a newly formed retail REIT and sell a further C$550 million of noncore assets.

To the public

* Broadstone Net Lease Inc. set the price range of its IPO of 33.5 million class A shares at between $17.00 and $19.00 per share.

* Chinese data center operator Chindata Group Holdings Ltd., backed by Bain Capital LP, filed for an IPO of an undisclosed number of its American depositary shares, representing its class A ordinary shares.

Around the world

* Private equity and real estate giant The Blackstone Group Inc. acquired a 28-property logistics portfolio in Europe from a joint venture of private equity firm Castlelake LP and Melcombe through an auction. The properties are spread across Germany and France, with 16 properties in Paris.

* Digital Realty Trust Inc. unit Interxion BV purchased Croatia-based carrier-neutral data center provider Altus IT for an undisclosed amount.

* Newly established closed-ended investment company Home REIT PLC plans to raise £250 million in an IPO on the London Stock Exchange.

* Sino-Ocean Group Holding Ltd. is planning to spin off and list Sino-Ocean Service Holding Ltd., its property management business, on the Hong Kong stock exchange. The parent company will own at least a 50% stake in Sino-Ocean Service upon the completion of the planned spinoff.

* Australia's Dexus proposed to merge its A$10 billion Dexus Wholesale Property Fund with that of a diversified property fund with A$4.5 billion of assets, The Australian Financial Review reported.

* Private equity firm EQT AB (publ)'s EQT IX fund agreed to pay €1.3 billion to acquire Spanish online real estate classifieds marketplace provider Idealista SAU from funds advised by Apax Partners SAS and management.

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