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WeWork postpones IPO; Blackstone to buy Colony industrial assets for $5.9B

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WeWork postpones IPO; Blackstone to buy Colony industrial assets for $5.9B

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

WeWork's worrisome world

* The We Co., the parent of coworking giant WeWork Cos. Inc., decided to postpone its planned IPO indefinitely to focus on the company's core business, just days after co-founder Adam Neumann stepped down as CEO amid increasing criticism and investor concerns regarding the company's valuation and corporate governance structure.

The company's newly appointed co-CEOs, Artie Minson and Sebastian Gunningham, said they have "every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future."

* Citing sources close to the situation, the New York Post reported that WeWork is in talks with banks including JPMorgan and Goldman Sachs for financing to prevent a cash crunch after its IPO was postponed. One of the sources said the banks could arrange a loan of up to $2 billion or more.

* Separately, WeWork agreed to occupy 362,197 square feet in the 40-story building at 437 Madison Ave. in Manhattan, N.Y., replacing Omnicom Group Inc., whose lease is set to expire in 2020, the Commercial Observer reported.

M&A-verse

* An affiliate of private equity giant Blackstone Group Inc. agreed to acquire Colony Capital Inc.'s industrial real estate assets and affiliated industrial operating platform for $5.9 billion. The last-mile light industrial portfolio of Colony Industrial consists of approximately 60 million square feet of infill logistics assets across 465 buildings in 26 U.S. markets and is significantly concentrated in Dallas, Atlanta, Florida, northern New Jersey and California.

Colony Capital expects the sale to generate net proceeds of more than $1.2 billion, with closing slated for the fourth quarter.

* CoStar Group Inc. plans to acquire hotel data analytics company STR Inc. in an all-cash transaction valued at $450 million, with closing scheduled for the fourth quarter.

* Property services company Newmark Group Inc. bought Workframe Inc., which provides workflow solutions to players in the commercial real estate industry.

* Certain Reven Housing REIT Inc. stockholders who collectively own about 70.7% of the company's shares approved its proposed acquisition by KBS Strategic Opportunity REIT Inc., with Reven saying no further action or shareholder vote is required to finalize the merger.

* Canadian private equity firm Clarke Inc. wrapped up its buyout of Holloway Lodging Corp., with the hotel operator's shareholders receiving 0.65 of a Clarke common share for each Holloway share they own.

* A Cortland Partners LLC affiliate completed its acquisition of Canada's Pure Multi-Family REIT LP in an all-cash transaction valued at about US$1.2 billion, including net debt.

* Office real estate investment trust NorthStar Realty Europe Corp. completed its merger with and into a wholly owned unit of an Axa Investment Managers - Real Assets-managed fund.

Venturing big

* A Blackstone affiliate agreed to purchase a 65% controlling interest in Great Wolf Resorts Inc. from Centerbridge Partners LP affiliates. The private equity firms will form a new $2.9 billion joint venture to own the family-oriented entertainment resorts owner and operator.

* Simon Property Group Inc. and Rue Gilt Groupe LP agreed to set up a new multiplatform venture focused on digital value shopping, with the mall giant to contribute roughly $280 million to the venture including the value of its online outlet marketplace Shop Premium Outlets.

* HCP Inc. entered into various agreements with Brookdale Senior Living Inc., including the healthcare REIT's purchase of a 51% stake in Brookdale's unconsolidated 13-property continuing care retirement community venture for $510 million.

* Data center landlord Equinix Inc. agreed to buy three data centers from Mexican telecom firm Axtel SAB de CV for US$175 million, marking its debut in the country. Bloomberg News had recently reported, citing unnamed sources, that the company was in talks for the acquisitions.

Property ledger

* Office REIT SL Green Realty Corp. is under contract to sell its 37-story, 97%-occupied property at 220 E. 42nd St. in Midtown Manhattan, known as The News Building, for $815.0 million.

* Office landlord Columbia Property Trust Inc. sold the Lindbergh Center mixed-use property in Atlanta for $187 million.

* Xenia Hotels & Resorts Inc. aims to sell a portfolio of seven Kimpton hotels that could trade for approximately $500 million, Bloomberg News reported, citing unnamed sources. Newmark Knight Frank will reportedly advise Xenia on the potential sale of the portfolio, which includes Kimpton Hotel Monaco properties in Chicago, Denver and Salt Lake City.

* A unit of homebuilder Toll Brothers Inc. and Carlyle Group LP entered into a joint venture to develop the 320-unit, 12-story Osprey apartment community in Atlanta's West Midtown neighborhood. Leasing and first move-ins are expected in early 2020.

Funds game

* Selina Ltd., a traveler-focused coworking startup that counts former WeWork CEO Adam Neumann among its backers, is working with Bank of America Corp. to raise $500 million for a U.S. real estate-focused fund, Bloomberg News reported, citing Selina President Yoav Gery.

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