US multifamily REITs pipeline up in Q2; PGIM sells Fla. retail assets for $224M

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

The development pipeline of US multifamily real estate investment trusts rose to $5.0 billion in the second quarter of 2024 for the first time since the first quarter of 2023, wealth manager Janney Montgomery Scott said in a Sept. 5 report.

The pipelines lean heavily toward the East Coast, with northern New Jersey, Raleigh and Durham, NC., and Charlotte, NC., accounting for 16.3%, 11% and 10.4% of the current total, respectively.

AvalonBay Communities Inc. has the biggest overall exposure, accounting for 47% of the projects and 51% of the dollar value of the entire multifamily REIT subsector.

Janney expects the REIT's pipeline to fall in the second half of 2024 before rebounding in 2025.

"While the next 12 months will continue to see substantial new supply, the combination of higher debt costs, still elevated construction costs and reduced availability for new construction financing means that relatively few private developers have been starting new projects over the last year," according to the report.

CHART OF THE WEEK: US REITs record tamer Q2 same-store net operating income growth

⮞ The same-store net operating income of US REITs grew at a median rate of 2.6% on an annual basis, slower than the 3.8% median growth recorded in the same period in 2023.

⮞ Healthcare REITs booked a median increase in same-store NOI of 7.8%, the biggest year-over-year growth among the REIT segments.

⮞ Only the self-storage REIT segment recorded a decrease in same-store NOI, with a median year-over-year drop of 1.6%.

Property deals

– PGIM Real Estate Finance LLC sold a 608,314-square-foot grocery retail portfolio comprising seven properties — spanning Davie, Lake Worth, Kissimmee, Royal Palm Beach and Fort Myers, Fla. — for $223.9 million.

– Healthcare Realty Trust Inc. acquired eight properties in its joint venture with Nuveen Real Estate for $193 million, bringing the total value of their partnership to more than $600 million.

– NexLiving Communities Inc. closed its acquisition of a portfolio comprising 16 multifamily properties in eastern Ontario and Québec. The portfolio, appraised at $224 million, was purchased from Canada Inc. and Devcore Group Inc.

Explore key people moves in North American real estate.

REIT Replay: REIT share prices continue to tick up during final week of August