REITs and the broader markets ended their losing streak Wednesday, April 6, as a pair of health careREITs launched common stock offerings to help fund significant property acquisitions.
The MSCI US REIT Index (RMZ) climbed 0.20% to 1,150.55, and theSNL US REIT Equity Index added 0.30% to finish at 306.62. The Dow Jones IndustrialAverage jumped 0.64% to 17,716.05, while the S&P 500 surged 1.05% to close at2,066.66.
Physicians RealtyTrust initiated an upsized public offering of 22.5 million common shares of beneficial interestto help finance the $724.9 million purchase of 52 medical office facilities fromregional health systems controlled by Catholic Health Initiatives.
The deal will be completed in two tranches, with the first trancheslated to close this month and the second before the end of the second quarter.The properties aggregate 3,159,495 rentable square feet across 10 states.
The Milwaukee-based REIT said the offering was at $17.85 per share, representingnet proceeds of roughly $384.9 million. The offering, which will also include a30-day underwriters' option to purchase up to 3,375,000 additionalshares, is anticipated to close April 11.
Healthcare Trustof America Inc. said it kicked off a public offering of 5.2 million common shares, with a 30-day optionfor underwriters to buy up to 780,000 additional shares. It priced the offering at $28.90 per share for expected grossproceeds of about $150 million.
Separately, the Scottsdale, Ariz.-based REIT said it purchasedmedical office buildings in three separate transactions worth a total of $163 millionduring the first quarter and is under contract to buy additional MOBs in New Englandand the Midwest for roughly $210 million. It added that it inked exclusive nonbindingletters of intent to acquire an undisclosed number of additional assets.
The company said part of the net proceeds from the offering,set to close by April 11, will be used to help fund its pending real estate acquisitions.
Healthcare Trust of America shares fell 2.10% to close at $28.90,while Physicians Realty shares slid 0.65% lower to $18.34.
CommunicationsSales & Leasing Inc. moved one step closer to its pending $409 million acquisitionof PEG Bandwidth LLC.
The REIT said April 6 that the waiting period under the Hart-Scott-RodinoAntitrust Improvements Act of 1976 has expired, paving the way for the to potentially closein early May. The deal remains subject to additional regulatory approvals.
Shares of Communications Sales popped 2.28%, ending Wednesdayat $22.83.
Regional mall giant SimonProperty Group Inc. has beefed up its coffers with an expanded unsecuredmulticurrency supplemental revolving credit facility.
The company said April 6 that the existing revolver's borrowingcapacity has been increased to $3.5 billion from $2.75 billion through the of a $750 million accordionfeature under the facility. The amended facility also allows the company to furtherexpand the facility to $4.25 billion.
Chairman and CEO David Simon said in a release that the transactionstrengthens the company's financial flexibility while providing "greater liquidity"to facilitate its growth.
Simon shares put on 0.78% to close at $208.66 on April 6.
On the macro front, U.S. commercial property values fell by lessthan 0.50% in March, Green Street Advisors reported April 6, citing its Green StreetCommercial Property Price Index. The firm noted that the recent flattening out incap rates has led to a materially slower pace of property appreciation comparedto a year ago.
Meanwhile, the Mortgage Bankers Association reported April 6that U.S. mortgage applications in the week ended April 1 climbed 2.7% week over week on a seasonally adjusted basis.
The market composite index rose 3% from a week earlier on anunadjusted basis.
Anbang's abortedStarwood gambit raises questions about China-US deals: Large Chineseacquirers, including several insurance companies, are seeking to invest in U.S.assets. But observers say Anbang Insurance Group's ultimately unsuccessful bid toacquire Starwood Hotels & Resorts Worldwide illustrates the difficulties ofcross-border M&A.
Data Dispatch:REIT ATM offerings up nearly 30% QOQ in Q4'15: Year-to-date in 2016,REITs have announced six new programs.
Real Estate Rundown:Expect multifamily vacancy to trend up, Reis says: The research firm'sfirst-quarter data showed moderate improvement in most office and retail fundamentals,but hinted at the prospect of a prolonged upswing in multifamily vacancy, as newconstruction outpaces absorption.
Market prices and indexvalues are current as of the time of publication and are subject to change.