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2 Calif. buildings to trade for $350M; Crown Realty CEO charged in bribery probe

Commercial real estate

* David Ellison, the founder of Skydance Media, is close to buying two buildings in the Lantana office complex in Santa Monica, Calif., for roughly $350 million, The Real Deal reported, citing unnamed sources. The two buildings, Lantana Center and Lantana West, comprise the complex's north campus and total 278,680 square feet.

The properties are being sold by a joint venture between Artisan Realty Advisors LLC and Brightstone Capital Partners.

* Crown Realty & Development Inc. co-founder, CEO and president Robert Flaxman, and Robert Zangrillo, founder and CEO of venture capital and real estate investment firm Dragon Global, are among dozens of individuals charged in an alleged bribery scheme to secure the admission of students to top universities across the U.S.

The scheme involved bribing administrators and athletic coaches to facilitate the admission of students to elite universities such as Yale, Stanford, Georgetown, the University of Southern California and the University of Texas.

* According to The Wall Street Journal, several real estate startups that rent out furnished properties on flexible terms after signing long-term leases or management agreements with landlords, are following a private-equity investing approach to increase their revenue. Coworking companies like We Co., which includes WeWork Cos. Inc., are raising money for real estate investment funds. The coworking giant raised $745.4 million from investors as of March 8 for one such fund, the publication added, citing securities filings.

Such property firms, including Bond Collective, often collect management fees or acquire a stake in the building, according to the report. Co-living firm Medici Living GmbH is investing $300 million in U.S. projects through a partnership, as well as roughly $1 billion in developments across Europe with Corestate Capital Holding SA. Starcity Properties Inc., another co-living firm, is raising a $1 billion-plus fund, the publication added.

* Blackstone Group LP's Blackstone Real Estate Investment Trust acquired a 100-unit complex in Santa Fe Springs, Calif., for $56.7 million from Praedium Group LLC, The Real Deal reported, citing property records.

Located at 12257 Heritage Springs, the Miro Apartments are part of the larger 5.8-acre Village at Heritage Springs masterplanned community. The Blackstone entity received a $28.2 million acquisition loan from California Bank and Trust for the purchase. Praedium bought the asset from developer Fairfield Residential Co. LLC for $47 million in 2016, the news outlet added, citing Bisnow.

* Sales of nontraded REITs jumped 62.2% year over year in the first two months of the year, signaling growing strength in an industry beleaguered in recent years by tighter regulatory oversight around fee transparency. Led by institutional players such as Blackstone, sponsors of nontraded REIT products raised a cumulative $997.3 million in January and February, up from the $614.9 million in the same period in 2018, according to investment banking firm Robert A. Stanger & Co. Inc.

Sales of daily net asset value REITs, so-called "perpetual life" products that offer liquidity and regularly updated valuations, continue to climb as a percentage of overall sales. In January and February, such sales totaled $777.2 million, representing 77.9% of the total, up from $464.0 million a year ago.

* Aby Rosen of real estate firm RFR Holding LLC, which along with Vienna-based SIGNA Holding GmbH is under contract to buy the 77-story Chrysler Building in New York City for roughly $150 million, said he will consider transforming the office tower into a hotel in a March 12 email, Bloomberg News reported.

Citing a person with knowledge of the matter, the news outlet added that necessary renovations to the tower may cost between $150 million and $250 million.

After the bell

* Prologis Inc. named Gary Anderson, previously CEO of Europe and Asia, as COO. Gene Reilly, previously CEO of the Americas, will become the company's new chief investment officer, replacing Mike Curless, who will become chief customer officer.

* Investors in North America continue to see industrial assets as a "top opportunity" in 2019 amid all-time low vacancy rates, all-time high rents and a bullish long-term outlook for the sector, according to a report from Marcus & Millichap Inc.

Housing

* Bloomberg News reported that buyers seeking homes in West Coast cities like Seattle and San Francisco now have more negotiating power, at a time when prices are flattening or even falling and time-on-market is rising, thanks to factors including a hike in mortgage rates in 2018 and volatility in technology stocks.

Home sales reached 11-year lows in Southern California and in the San Francisco Bay Area in January, and prices in the Portland, Ore., and Denver areas declined in 2019 for the first time since 2012, the news outlet added, citing CoreLogic Inc. and multiple listings services. Over in King County, which includes Seattle, median single-family home prices fell 3% per square foot in January, representing the first annual decline since 2012, according to brokerage Redfin.

The day ahead

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

In Asia, the Hang Seng was down 0.39% to 28,807.45. The Nikkei 225 fell 0.99% to 21,290.24.

In Europe around midday, the FTSE 100 was up 0.05% to 7,154.95 and the Euronext 100 was 0.24% higher at 1,023.73.

On the macro front

The durable goods orders, PPI-FD, construction spending, e-commerce retail sales and EIA petroleum status reports 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.

Now featured on S&P Global Market Intelligence

Data Dispatch: February marks 13-month high for US REIT capital markets activity: Chart Watch: U.S. equity REITs raised $12.31 billion through capital offerings in the first two months of the year, roughly 11% above the amount raised in the year-ago period.

REITs vs MLPs: Assessing the better high-yield play: Both REITs and master limited partnerships, two popular high-yield vehicles, have suffered a crisis of confidence in the last couple of years, and there is disagreement about which offers better upside going forward.

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