US industrial leasing set to soar; Blackstone to sell G6 Hospitality for $525M

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Industrial leasing in the US is expected to spike in 2024 as tenants seek to move into newer and more modern space, according to a report from CBRE Group Inc.

CBRE Research projects industrial leasing in 2024 at 800 million square feet, up from the 790.4 million square feet recorded in 2023. The 2024 square-footage projection would be the third-highest annual amount on record, according to the real estate services company.

"As new space becomes available, many occupiers are moving out of older facilities that lack modern amenities," CBRE said.

Industrial buildings completed between 2023 and the second quarter of 2024 posted 395 million square feet of positive net absorption, while those built between 2000 and 2022 recorded 17 million square feet of negative net absorption.

The US has 20 billion square feet in total industrial space, more than 13 billion square feet of which was built before 2000.

CHART OF THE WEEK: REIT capital offerings decline in August

⮞ US equity real estate investment trusts pulled in $6.99 billion through capital offerings in August, down 19.4% month over month.

⮞ Almost all the capital was raised through debt offerings, while the remaining $18.5 million and $3.5 million were obtained through common equity and preferred equity offerings, respectively.

⮞ Retail REIT Realty Income Corp. raised the biggest amount in August, at $1.43 billion, after selling three sets of notes.

M&A

– Blackstone Real Estate Advisors LP agreed to sell G6 Hospitality LLC, an economy lodging locations operator, to Oravel Stays Ltd. in a $525 million deal. The transaction is expected to close in the fourth quarter.

– American Healthcare REIT Inc. acquired the remaining 24% minority stake it did not already own in Trilogy REIT Holdings LLC from an affiliate of NorthStar Healthcare Income Inc. in an all-cash deal valued at approximately $258 million.

PROPERTY DEALS

– Elliott Investment Management LP agreed to purchase the 687,000-square-foot office tower at 701 Brickell Ave. in Miami from Nuveen Real Estate for about $450 million, The Real Deal reported.

– Primaris REIT reached a deal to buy the Les Galeries de la Capitale shopping center in Quebec City for about C$325 million. The transaction is expected to close Oct. 1.

– Northwood Investors LLC acquired a combined 1.8 million-square-foot industrial portfolio spanning Georgia, Florida and Texas for $160 million. Affiliates of Apollo Global Management Inc. provided financing for the acquisition.

US HOTEL PERFORMANCE

US hotel performance was up year over year across all three key metrics during the week ended Sept. 21, STR reported, citing data from CoStar, which provides information and analytics on property markets.

Revenue per available room (RevPAR) was $116.22, up 2.5% from the comparable week in 2023, while occupancy rose 0.5% to 68.9%. Average daily rate (ADR) increased 2% year over year to $168.80.

Among the top 25 markets, Houston reported the biggest year-over-year gain in occupancy, while San Francisco logged the highest increase in ADR and RevPAR. New York City reported the steepest drop in RevPAR.

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