Commercial real estate
* South Korean financial services company Mirae Asset Global Investments Co. Ltd. agreed to buy 15 luxury hotels across the U.S. from Anbang Insurance Group Co. Ltd. for more than US$5.8 billion, The Wall Street Journal reported, citing people familiar with the matter.
* Swiss flexible workspace provider IWG PLC is in discussions with investment banks about possibly selling its Canadian operations, Bloomberg News reported, citing a person with knowledge of the matter. The London-listed company was previously reported to be exploring a spinoff of its U.S. business into a separate publicly traded company with a valuation of up to £3 billion.
* The Journal featured a report on traditional landlords' attempts to push back against WeWork Cos. Inc.'s deals with large corporations by launching their own coworking businesses. Office landlords including Boston Properties Inc., British Land Co. PLC, Tishman Speyer and Hines have launched their own coworking brands to compete with WeWork.
The moves raise questions about whether big landlords "can forestall an Uber-like undermining of their business," or whether the coworking startups "can outflank a well-funded counterattack," according to the publication. IPO-hopeful WeWork indicated in its filing that 40% of its business targets larger enterprises instead of the smaller entrepreneurs and businesses it used to target.
* Kennedy Wilson formed a new joint venture with Security Benefit Life Insurance Co. to target stabilized, income-producing real estate investment opportunities in the western U.S. with an initial investment target of $500 million. Kennedy Wilson will have a 20% interest in the investment and earn customary fees as asset manager.
The joint venture acquired the Sunset North office campus in Bellevue, Wash., for $227 million, investing $77 million of equity, and secured a $150 million, 10-year fixed-rate, interest-only loan. The acquired three-building property spans 464,000 square feet across seven acres and is 99% leased.
* Ceruzzi Properties is looking to sell the land underneath the 34-story Lipstick Building in Manhattan, N.Y., after a partnership led by Argentina's IRSA Inversiones y Representaciones Sociedad Anónima let its option to acquire the land expire earlier in 2019, The Real Deal reported, citing Ceruzzi President Art Hooper.
Ceruzzi is marketing the fee position in the 592,000-square-foot property via JLL. SL Green Realty Corp. has a stake in the position through a preferred-equity stake expiring in 2020, according to the report. Ceruzzi acquired the ground lease for $453 million four years ago. No asking price has been set for the asset, the report added, citing Hooper.
* The Bently family is placing the 186,000-square-foot Bently Reserve building in San Francisco's Financial District up for sale, with the property expected to sell for up to $150 million, the San Francisco Business Times reported, citing sources familiar with the deal. The eight-story property previously changed hands for $46.8 million in 2005, and the Bently family spent $35 million on renovations, the report noted, citing property records.
* Growth in hotel revenue per available room shrunk to 1.4% in the first quarter and 1.1% in the second quarter, marking the first time since 2010 that the metric was below 2% for two consecutive quarters, the Journal reported, citing STR. STR also lowered its forecast for 2019 U.S. RevPAR growth to 2% in June from a prediction of 2.3% in February.
The declining prospects are also reflected by investors, with hotel real estate investment trusts being the second-worst performers among REITs in 2019, beating only mall REITs, the publication noted. Hotel REITs returned 3.4% in the first eight months, while the FTSE Nareit All Equity REITs index had a total return of 26% for the period.
New supply is eating into pricing power, along with weaker business travel demand and higher labor costs, according to the publication.
* Real estate firms such as Redfin Corp., Zillow Group Inc. and OpenDoor Inc. are venturing into new businesses to supplement their incomes, helping to counter tight margins in their core businesses as well as to diversify, according to a report from the Journal. The side businesses include mortgages and title insurance.
The publication noted that analysts and industry executives are warning that mortgages and title insurances are not likely to compensate for dropping revenues in their main business segments.
* Harbert Management Corp. is targeting a $600 million U.S. value-add real estate fund, IPE Real Assets reported, citing a board meeting document from fund investor Teachers' Retirement System of Louisiana. The retirement system approved a $50 million commitment to the Harbert United States Real Estate Fund VII.
The retirement system also approved a $75 million commitment to the Cabot Industrial Value Fund VI, which is targeting $800 million for investments in North America.
After the bell
* Blackstone Group Inc. has put the 36-story Park Avenue Tower in New York City on the block for more than $800 million, The Real Deal reported, citing a source familiar with the building.
The day ahead
Early morning futures indicators pointed to a higher opening for the U.S. market.
In Asia, the Hang Seng gained 1.78% to 27,159.06, and the Nikkei 225 increased 0.96% to 21,597.76.
In Europe, around midday, the FTSE 100 climbed 0.92% to 7,334.87, and the Euronext 100 was up 0.46% to 1,084.33.
On the macro front
The PPI-FD index, the Atlanta Fed business inflation expectations report, the wholesale trade report and the EIA petroleum status report are due out today.
Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.
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Data Dispatch: US REIT median implied cap rates hold steady in Q2: Chart Watch: The median implied cap rate for U.S. REITs remained flat quarter over quarter, but was up a slight 13 basis points on a yearly basis.
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