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Taking the reins; the REIT stuff

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Taking the reins; the REIT stuff

S&P Global Market Intelligence offers our top picks of U.S. real estate news stories and more published throughout the week. Please note that some entries may have links to third-party sources that may require a subscription.

Taking the reins

* New York REIT again led headlines this week, receiving 14 separate management proposals from interested parties Friday, after reaching out to 31 entities.

WW Investors LLC also submitted a proposal that the shareholder activist said Oct. 4 could save the REIT more than $50 million in liquidation costs and $4 million in annual operating costs, compared to the existing advisory agreement.

Under the WW Investors proposal, the activist shareholder group would manage the REIT during its planned liquidation, or on an ongoing basis if no liquidation plan is rolled out. The proposal also calls for the appointment of Wendy Silverstein, a former Vornado Realty Trust executive, as CEO of the REIT.

The REIT stuff

* HCP Inc. provided an update this week on its plan to spin off its skilled nursing unit into a REIT, announcing Oct. 3 that the unit, called Quality Care Properties Inc., priced a $750 million debt offering and obtained a $1.0 billion first-lien term loan. The net proceeds will be used to help pay for the properties and assets that HCP will contribute to Quality Care prior to its spinoff, which is targeted for a fourth-quarter close.

* Wireless telecom company SBA Communications Corp. is on the verge of entering the REIT space, revealing that its plan to convert into a REIT obtained board approval and will be up for a vote at a special shareholder meeting scheduled for the fourth quarter. SBA President and CEO Jeffrey Stoops said in an Oct. 3 release that the REIT conversion should give the company ample opportunities to create long-term shareholder value.

Signed, sealed, delivered

* As scheduled, Cousins Properties Inc. finalized its merger with Parkway Properties Inc. Oct. 6 and the spinoff of the combined entity's Houston-based assets into a new REIT known as Parkway Inc. should be completed Oct. 7. The merged entity started trading on the NYSE Oct. 6 under the CUZ ticker symbol.

* More than a year after it first unveiled plans to go public, MedEquities Realty Trust Inc wrapped up its IPO of 19,925,333 common shares, which priced at $12.00 apiece. Part of the net proceeds from the offering will be applied toward preferred stock redemption.

* A bevy of completed transactions on the property front also made headlines this week. As expected, Medical Properties Trust Inc. acquired an equity stake in Steward Health Care System LLC and real estate interests in nine acute care hospitals that the latter operates for a total investment of $1.25 billion. The trust said Oct. 3 that it funded the transaction in part with proceeds from its common stock offering.

* Liberty Property Trust said Oct. 3 that it increased its total dispositions to date for 2016 to $1.2 billion with the closing of its $969 million portfolio sale announced in July. The company sold the portfolio, comprising 108 properties and about 26.7 acres of land across four states, to Workspace Property Trust and Safanad Ltd.

* National Storage Affiliates Trust announced Oct. 6 that its joint venture purchase of the iStorage portfolio for roughly $630 million closed, and that it separately wrapped up its purchase of the iStorage property management platform.

Follow the leader

* Washington Prime Group Inc. announced Oct. 6 that it selected Lou Conforti as its CEO, with immediate effect. He had served as interim CEO since June and he will continue to serve on the company's board.

* Education Realty Trust Inc. announced Oct. 3 that it brought in John Thomas as an independent director effective Sept. 28. Thomas is also the president, CEO and a trustee of Physicians Realty Trust.

* Equity LifeStyle Properties Inc. Vice President and Chief Accounting Officer Ann Wallin is stepping down, effective Oct. 21, to explore a new opportunity. The company said Oct. 3 that Executive Vice President, CFO and Treasurer Paul Seavey took over the principal accounting officer responsibilities immediately after Wallin's tender of resignation.

Shopping spree

* Ventas Inc. announced Oct. 5 that Ardent Health Services, in which it owns a 9.9% equity stake, is acquiring LHP Hospital Group Inc. in a merger deal that Ventas' chairman and CEO said would create the nation's second-largest private, for-profit hospital operator with 19 hospitals across six states. Ventas is providing $700 million in secured debt financing to an Ardent subsidiary to help fund the transaction, which is slated to close in early 2017.

* Pure Industrial Real Estate Trust agreed to pay about C$171.1 million on Oct. 3 for income-producing properties in Alberta and roughly US$81.0 million for similar assets in the Southeastern U.S. It is also spending some C$40.0 million on a distribution facility development in Richmond, British Columbia, which is underway. The company launched a bought-deal trust unit offering to help finance the transactions.

Unloading zone

* As part of its initiative to unload up to $1 billion of noncore assets, Columbia Property Trust Inc. announced Oct. 3 that it sold a class A office building in Newark, N.J., for $174.5 million, bringing its total year-to-date asset sales to roughly $532 million.

* H&R Real Estate Investment Trust struck a roughly C$257.4 million deal to divest a 50% stake in a Calgary, Alberta, property known as the TransCanada Pipeline Tower. The company said Oct. 6 it will use proceeds from the sale, set to close in November, for debt repayment.

* Artis Real Estate Investment Trust said Oct. 4 that it is off-loading the Southwood Corner retail property in Calgary in a C$40.2 million deal with an unnamed buyer. In late September, Artis was reported to be considering selling about C$300 million of its retail and industrial properties in that province.

Featured during the week on S&P Global Market Intelligence

Real Estate Rundown: HCP spinoff issues debt on time, but pays for its tenant's troubles: The company, which is coming into existence largely as a way of removing properties linked to tenant HCR ManorCare from HCP's portfolio, issued debt at notably high rates in a series of recent transactions.

Q&A: Farmland Partners CEO — 'We're after every high-quality investor we can get': S&P Global Market Intelligence caught up with Paul Pittman, CEO of Farmland Partners, to talk growth strategy in the niche farmland REIT space.

League Tables

Data Dispatch: SNL Q3'16 M&A League Tables: SNL Financial on Oct. 7 released third-quarter 2016 M&A league tables for its covered North American sectors.

Data Dispatch: SNL Q3'16 Capital Markets League Tables: SNL Financial on Oct. 7 released third-quarter 2016 capital markets league tables for its covered North American sectors.

Data Dispatch: Deal spike in Q3 shakes up REIT M&A league tables: New leaders in the financial adviser rankings by deal value and deal count emerged after an active quarter in REIT M&A.

Data Dispatch

Data Dispatch: Bank of America Merrill Lynch takes 2016 lead among real estate equity underwriters: As of the end of the third quarter, the firm was second for the year among real estate debt underwriters, behind J.P. Morgan Securities.

Data Dispatch: US REITs outperform S&P 500 YTD through Q3: In the third quarter, the broader REIT sector posted a negative total return, though industrial REIT performance remained strong, beating the S&P 500 with a 5.1% total return.

Data Dispatch: 106 North American real estate companies increase dividends through Q3: During the two-week period between Sept. 17 and Sept. 30, W.P. Carey was the sole SNL-covered North American real estate company to announce an increase to its dividend.

Data Dispatch: US REITs trade at a slim premium to NAV at Q3-end: The "other" retail sector, comprising single-tenant and outlet center REITs, among others, traded at the largest premium to NAV, at 30.3%.

Data Dispatch: ChartWatch: Exit, opportunity in Moody National REITs' merger: The combination of the two nontraded hotel REITs, both sponsored by the Moody National Cos., would bring together two entities with shared leadership, among other similarities.

Data Dispatch: Household income projected to rise the fastest in Oklahoma in aging US: The U.S.' population is expected to hit 337.4 million in 2022, with the oldest demographic making up a higher percentage of the total, according to Nielsen's latest demographic projections.