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Education Realty in merger talks; more twists in Quality Care, LaSalle deals

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Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021

Capital Markets View – January 2021


Education Realty in merger talks; more twists in Quality Care, LaSalle deals

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.

Merger mania

The week saw a continuation of the increased pace of merger and acquisitions activity in the real estate industry.

* Unnamed sources told The Wall Street Journal that student-housing real estate investment trust Education Realty Trust Inc. is in exclusive negotiations to be acquired by Greystar Real Estate Partners LLC for roughly $3.1 billion, in a $41.50-per-share deal.

* Healthcare REIT Quality Care Properties Inc. received an acquisition proposal from an unnamed third party during the go-shop period for its $20.75-per-share all-cash deal with peer Welltower Inc. Quality Care's financial adviser, Goldman Sachs, contacted 34 parties including REITs, healthcare providers and financial sponsors to solicit offers during the go-shop period, which ended June 9.

Five of the parties entered confidentiality agreements, and one party made an offer. Quality Care's board and its advisers determined that the proposal could possibly lead to a more favorable offer than Welltower's deal.

* Hotel REIT Pebblebrook Hotel Trust made yet another increased offer for peer LaSalle Hotel Properties with an implied price of $37.80 per common share, after the latter signed a $33.50-per-share deal with a Blackstone Group LP affiliate. The new offer price also takes into account the $112 million termination fee payable to Blackstone if LaSalle terminates its deal with the private equity giant.

Going public

* Primarily single-tenant net-lease real estate company Essential Properties Realty Trust Inc. is offering 32,500,000 shares of its common stock in an IPO. The company expects a price range of between $14 per share and $17 per share, with expected net proceeds of between $455 million and $552.5 million.

Selling off

* Canada-based diversified REIT H&R Real Estate Investment Trust completed the roughly US$620.4 million sale of almost all its U.S. retail properties. The transaction involved 62 of the REIT's properties, excluding 16 gas stations and convenience stores, and a grocery-anchored center in Florida which is under contract for US$12.6 million.

Featured during the week on S&P Global Market Intelligence

Data Dispatch: 5 US equity REITs identified as share-repurchase candidates in 2018

Conference Chatter: REIT discounts maybe not so deep — or unjustified

Research Roundup: Evercore makes 6 ratings changes; Jefferies initiates coverage of 3 REITs