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GGP reports Q2 results; $500M expansion project planned for Phoenix university

Commercial real estate

* GGP Inc. reported second-quarter funds from operations of $334.7 million, or 35 cents per share, compared to $340.1 million, or 35 cents per share in the year-ago period.

The company offered 2017 third-quarter FFO-per-share guidance in the range of 36 cents to 38 cents, and affirmed its full-year FFO-per-share guidance at a range of $1.56 to $1.60.

* Grand Canyon Education Inc. plans to spend an average of $100 million over the next five years to expand its Grand Canyon University campus in Phoenix to 400 acres, the Phoenix Business Journal reported, citing company CEO Brian Mueller. For 2017, the company has set aside more than $100 million to add two apartment-style dorms, a classroom building, a parking garage and a club sports facility.

* First Potomac Realty Trust is laying off 72 of its roughly 120 employees ahead of its planned acquisition by Government Properties Income Trust, the Washington Business Journal reported, citing a Worker Adjustment and Retraining Notification notice filed by the company to Maryland's labor department.

The notice, which covers 50 employees in Bethesda, Md., and 22 in Columbia, Md., will take effect Oct. 1, according to the Aug. 1 report.

* Maefield Development, in partnership with Fortress Investment Group LLC and L&L Holding Co., acquired the hotel section of 1568 Broadway in Manhattan, N.Y., for $200 million, The Real Deal reported.

JPMorgan Chase covered $75 million of the purchase consideration for the Double Tree Hotel portion of the 47-story building, which also houses the Nederlander Organization-owned historic Palace Theater, the report added, citing documents filed with the city's Department of Finance. Maefield bought the leasehold stake in the hotel from Sunstone Hotel Investors Inc. for $540 million in 2015.

* Dallas-based developer Sam Ware and business partner Jeff Blakeley of Dreien Opportunity Partners LLC are planning to redevelop the 1.4-million-square-foot former Parkland campus along Harry Hines Boulevard in Dallas into a mixed-use destination called The District, with features including a hotel, condominiums, apartments and senior care facilities, the Dallas Business Journal reported. The partners are close to signing a sale-leaseback contract for the asset. The agreement is expected to allow Parkland to lease back roughly 500,000 square feet of medical space for about three years, the report added.

* Developer Irgens will in August start building the 25-story BMO Harris Financial Center in a more than $175 million project that will displace a parking structure at North Water and East Wells streets in Milwaukee, the Milwaukee Business Journal reported, citing Irgens CEO Mark Irgens. Completion is slated for December 2019. The tower will span 379,400 total square feet and will come with a 647-stall parking ramp. BMO Harris plans to lease 124,000 square feet at the property, while retail space is expected to take up 12,000 square feet, the report noted.

* Gary Prosterman of Development Services Group, John Tirrill of SWH Partners and Bob Worthington of Worthington Hyde Partners have teamed up to deliver a $73 million mixed-use project at the site of the old Wonder Bread factory in Memphis, Tenn.'s Edge District, the Memphis Business Journal reported. The project will include apartments, offices and retail space.

* Facebook plans to appoint Local Initiatives Support Corp. to manage its Catalyst Housing Fund that will invest in affordable housing near the tech giant's headquarters in Menlo Park, Calif., the Silicon Valley Business Journal reported. Local Initiatives Support Corp. said it plans to boost the size of the fund to $75 million over five years, according to the report.

Facebook announced in July plans to build 1,500 residential units near its headquarters, with 15% of the units intended to be offered at below market rates.

After the bell

* Washington, D.C.-based alternative investment firm Carlyle Group LP drew close to $5 billion in commitments for its latest real estate funds, PERE News reported.

* Federal Realty Investment Trust announced a binding contract to set up a new joint venture with Primestor Development Inc., with the trust agreeing to invest roughly $345 million for an approximate 90% interest in the venture.

* First Potomac Realty Trust, now engaged in a merger deal with Government Properties Income Trust, was approached by three suitors seeking to buy the company between March 2016 and December 2016.

* Boston Properties Inc. reported second-quarter funds from operations attributable to common shareholders of $257.9 million, or $1.67 per share, up from $220.6 million, or $1.43 per share, in the 2016 second quarter.

* A Washington Prime Group Inc. unit priced an underwritten public offering of $750 million of 5.950% notes due Aug. 15, 2024.

* Kimco Realty Corp. priced an offering of $500 million of notes due Feb. 1, 2025, and $350 million of notes due Sept. 1, 2047.


* Nationwide home prices increased 6.7% year over year in June, and 1.1% from May, Housingwire reported, citing data from CoreLogic. Prices are expected to rise a further 5.2% by June 2018 and 0.6% by July, the report added. Denver, Houston, Miami and Washington, D.C., are now considered overvalued, the report noted.

The day ahead

Cleveland Federal Reserve Bank President Loretta Mester and San Francisco Federal Reserve Bank President John Williams are scheduled to speak today.

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng climbed 0.24% to 27,607.38, while the Nikkei 225 rose 0.47% to 20,080.04.

In Europe, at around midday, the FTSE 100 had fallen 0.31% to 7,401.32 and the Euronext 100 was down 0.11% at 999.49.

On the macro front

Mortgage applications fell 2.8% on a seasonally adjusted basis in the week ended July 28, the Mortgage Bankers Association reported, citing data from its weekly mortgage applications survey.

The ADP employment report, Gallup U.S. job creation index and EIA petroleum status report are also due out today.

Now featured on S&P Global Market Intelligence

* REIT Replay: Earnings and gains: Real estate investment trusts and the broader markets posted notable gains Tuesday, Aug. 1, as earnings season got into full swing.

* The Earnings Report: This roundup includes recent earnings reports from Retail Properties of America, Tanger Factory Outlet Centers and Ramco-Gershenson Properties, among others.

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