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Omega Healthcare to buy out MedEquities; Welltower picks up $1.25B portfolio

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

Healthcare handshakes

* Omega Healthcare Investors Inc. agreed to acquire fellow healthcare real estate investment trust MedEquities Realty Trust Inc. in a deal valuing MedEquities at about $600 million. The merger will increase the value of Omega's nonskilled nursing assets by $296 million.

Under the terms of the deal, which is expected to close in the first half of 2019, MedEquities shareholders will receive a fixed-exchange ratio of 0.235 of an Omega common share and $2.00 in cash for each MedEquities share, representing a value of $10.26 per share based on Omega's $35.15 closing stock price on Dec. 31, 2018. MedEquities will also pay its shareholders a special cash dividend of 21 cents per share on the trading day immediately before the merger closes.

* Welltower Inc. agreed to purchase 55 class-A medical office and outpatient facilities from nontraded CNL Healthcare Properties Inc. for $1.25 billion. The buildings cover 3.3 million rentable square feet and are part of a 63-property portfolio that CNL Healthcare was marketing as part of its pursuit of strategic alternatives. The company plans to continue marketing the portfolio's remaining properties, as well as six skilled nursing facilities in Arkansas.

Corporate level

* Government Properties Income Trust completed its merger with Select Income REIT in a deal valued by S&P Global Market Intelligence at $1.57 billion. The merged office REIT changed its name to Office Properties Income Trust and began trading on the Nasdaq under the ticker symbol OPI on Jan. 2.

* Diversified REIT iStar Inc. increased its stake in ground-lease REIT Safety Income & Growth Inc. with a $250 million equity investment. Under the deal, iStar purchased 12.5 million limited partnership units in Safety Income's operating partnership at $20.00 per unit. Safety Income will use the investment to boost its portfolio by $750 million, based on its targeted two-to-one debt-to-equity ratio.

Big-figure deals

* Private real estate company Tishman Speyer Properties LP agreed to sell the Wilshire Courtyard business campus in Los Angeles to Canadian developer Onni Group of Cos. Ltd. for $630 million, The Real Deal reported, noting that the agreement is preliminary, and a formal contract has not been signed.

* Sportswear retailer Modell's Sporting Goods sold a 366,000-square-foot distribution center in the Bronx, N.Y., for $115 million, The Real Deal reported. Annapolis, Md.-based Realterm Logistics purchased the warehouse at 1500 Bassett Ave., according to the report.

* Realterm Logistics also acquired a six-building industrial park in Westchester County, N.Y., from Mack-Cali Realty Corp. The Elmsford Distribution Center encompasses more than 386,000 square feet of space, and its sale comes as Mack-Cali is unloading its flex-warehouse space and focusing on office and multifamily real estate.

* Icon Realty Management LLC agreed to sell a two-tower, 104-condominium project on the Upper East Side in Manhattan, N.Y., for $714 million, The Real Deal reported.

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