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Blackstone's Invitation Homes inks merger deal; Morgan Stanley mulls HQ move

Commercial real estate

* Invitation Homes Inc., the newly public single-family rental unit of Blackstone Group LP, signed a definitive agreement to combine with peer Starwood Waypoint Homes in a 100% stock-for-stock merger of equals.

The deal would create an entity with an equity market capitalization of approximately $11 billion and a total enterprise value of $20 billion, based on both companies' closing stock prices Aug. 9.

* Morgan Stanley is scouting for a possible new global headquarters in Manhattan, N.Y., and the bank's requirement of 1.9 million square feet could take it to Hudson Yards, Reuters reported, citing unnamed sources.

The bank occupies 1,335,000 square feet in its present global headquarters at 1585 Broadway in Midtown Manhattan and 564,900 square feet at its investment management headquarters at 522 Fifth Ave. The news outlet noted that the bank's ownership of both locations means it is under no pressure to relocate and cited a source as saying that a renovation of its present headquarters is also being considered.

The sources pointed to Tishman Speyers' planned 65-story tower in Hudson Yards and Brookfield Property Partners LP's Manhattan West project as potential options, according to the report.

* Silverstein Properties filed a permit for a 723-foot tall building at 520 W. 41st St., which forms part of a blockwide development site between 10th and 11th avenues on Manhattan's Far West Side, The Real Deal reported. The building will contain 499 residential units and 63,000 square feet of commercial space, the report noted, citing a filing.

The company was previously planning a 1,000-foot tall condominium and retail tower on the site at 514 11th Ave. with 1,400 luxury units and 300,000 square feet of retail space. Later, it was reported to be mulling two towers at the former Mercedes-Benz site dealership site, which it refinanced in January with a $153 million loan from SL Green Realty Corp.

* Douglas Emmett Inc. secured four interest-only refinance loans totaling $550 million through brokerage Walker & Dunlop Inc. The loans are backed by four class A apartment assets in Los Angeles and Santa Monica, Calif., Walker & Dunlop said in a release.

* The New York City Council approved the rezoning of Manhattan's East Midtown business district, sealing a plan that could lead to 13.4 million square feet of new and redeveloped office space in the upcoming decades, The Wall Street Journal reported. The rezoning covers about 78 blocks.

The rezoning requires developers to invest in public-space enhancements in order to build taller and also allows for the sale of unused air rights by landmark buildings while requiring a contribution to public projects from the air rights sales.

* According to The Real Deal's analysis of data from the New York State Attorney General's office, developers filed plans for 533 condominium units across nine projects in Queens, N.Y., in the second quarter, marking a decline from the previous quarter but still the second-highest amount since the first quarter of 2008.

* The Journal featured a report on how traditional developers are foraying into the so-called co-living concept in New York, adopting the model employed by newcomers like WeWork's WeLive, and building amenity-filled multiple-bedroom apartments designed for shared living. The Durst Organization's Frank 57 West project in Manhattan is one such example.

* Northern Trust Corp. signed up for 462,000 square feet at CNA Financial's 1.2 million-square-foot, 45-story property known as Big Red in Chicago's Loop district, the Chicago Tribune reported, citing Northern Trust spokesman Douglas Holt. The lease deal for 333 S. Wabash Ave. includes signage and naming rights for the building. Northern Trust plans to move up to 3,000 employees to the address in 2020 from multiple locations in Chicago, the report noted, citing Holt.

Insurer CNA had struck a deal with developer John Buck Co. in 2015 to move to a 35-story office tower being developed on Franklin Street while selling the 1.2 million-square-foot Big Red building to the developer for $108 million. The Franklin Street tower is set to open in June 2018, according to the report.

* Teeple Partners plans to develop an $83 million mixed-use project on a 1.4-acre lot next to City Hall in downtown San Antonio, the San Antonio Business Journal reported. The project, tentatively dubbed Kallison Square, is expected to comprise 305 residential units, about 45,000 square feet of shops and offices, and a six-story parking garage with 525 spaces.

* Citing JLL's 2017 North American Seaport Outlook report, Commercial Property Executive noted that the $5 billion expansion of the Panama Canal has led to boosts in the industrial real estate markets along ports in the East Coast and Gulf Coast in the U.S. About 25.4 million square feet of industrial space is in the pipelines at the 14 markets that JLL tracked for its report, with about 65% of that space situated in East and Gulf Coast ports.

After the bell

* Private equity firm Landmark Partners and Carlyle Group's Metropolitan Real Estate Equity Management unit acquired close to $2 billion of real estate assets from Harvard Management Co. Inc., Secondaries Investor reported.

* Morguard Corp. detailed its latest property transactions, including the acquisition of a pair of properties and sale of four assets across the U.S.


* The Cosmopolitan luxury resort casino in Las Vegas is set to renovate most of its hotel rooms amid upgrades that a spokesperson said will "substantially" exceed $100 million, the Las Vegas Sun reported. The resort will renovate 2,895 of its 3,027 rooms in the Boulevard and Chelsea towers, and the work is expected to complete in 2018.

* The Pennsylvania Gaming Control Board approved a proposed casino and hotel in South Philadelphia by Stadium Casino LLC, The Philadelphia Inquirer reported. The approval process for Philadelphia's second casino has been ongoing since 2014, according to the report.

The day ahead

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

In Asia, the Hang Seng fell 1.13% to 27,444.00, while the Nikkei 225 was down 0.05% to 19,729.74.

In Europe, around midday, the FTSE 100 was down 1.15% to 7,411.83, and the Euronext 100 fell 0.43% to 999.12.

On the macro front

The jobless claims report, the PPI-FD report, the EIA Natural Gas report, the Treasury budget report, the Fed balance sheet and the money supply report are due out today.

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