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Chinese buyer eyes $800M US hotels deal; Brookfield Property tenant moving out

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Chinese buyer eyes $800M US hotels deal; Brookfield Property tenant moving out

Commercial real estate

* Junson Capital, the wealth manager of China-based Longfor Properties Co. Ltd., is in talks to acquire a U.S. hotel portfolio from Massachusetts Mutual Life Insurance Co. for up to $800 million, Bloomberg News reported, citing a person with knowledge of the matter. The seven to eight assets include boutique hotels as well as resort properties, the news outlet noted, citing the unnamed source.

MassMutual owns the properties through its asset-management arm Barings, and an agreement could be announced in the next few weeks, the source told Bloomberg.

* Bank of New York Mellon Corp. plans to move its global headquarters out of Brookfield Property Partners LP's 225 Liberty St. building in the Brookfield Place office complex in downtown Manhattan, N.Y., The Wall Street Journal reported, citing a spokesman from the bank. A person familiar with the bank's plans told the publication that the bank plans to sublet the 350,000-square-foot space that it leased for 20 years commencing in January 2015.

The move, which would be the second headquarters relocation for the bank in less than four years, is scheduled to commence in the summer. The bank will move its 225 Liberty St. employees to the nearby 101 Barclay St. building that it owns, according to the report.

* A subsidiary of New York Times Co. has notified a W. P. Carey Inc. affiliate that it intends to exercise an option under a 2009 lease agreement to repurchase a portion of The New York Times' leasehold condominium interest in its headquarters building at 620 Eighth Ave. in Manhattan.

New York Times sold and leased back roughly 750,000 rentable square feet in a roughly $225 million deal back in 2009, and the company has an option exercisable in 2019 to repurchase the condo interest for roughly $250 million, according to a release. The deal comprised 21 floors of the 52-story building.

* Oxford Properties Group teamed up with Canada Pension Plan Investment Board and completed the $700 million acquisition of the office and retail portion of the St. John's Terminal site at 550 Washington St. in New York City. With the purchase from Westbrook Partners and Atlas Capital Group, the total capitalization of the site comes to $1.3 billion, according to The Real Deal. The partnership received $400 million of new financing from Deutsche Bank, the news outlet noted, citing sources.

Oxford, which will hold a 52.5% interest in the partnership and manage the development, agreed to buy the site in September 2017 for $700 million after outbidding Vornado Realty Trust, RXR Realty and Brookfield Property Partners. The sellers, meanwhile, will retain their ownership in the north site and build a 400,000-square-foot residential development.

* Bloomberg News reported on the expected $2.5 billion development plan to transform the Brooklyn Navy Yard in Brooklyn, N.Y., into a high-tech office hub. WeWork Cos. has helped design one of the planned waterfront office buildings, and the new development plan has 5.1 million square feet of additional space, with more than half of it in a single complex, the news outlet noted.

The Brooklyn Navy Yard Development Corp. intends to self-fund the development via revenue generated from tenants as well as through government and philanthropic subsidies and tax credits, the report noted, citing David Ehrenberg, president and CEO of the development corporation.

* Kennedy-Wilson Holdings Inc. purchased two multifamily properties in Salt Lake City for roughly $93 million, the company said. The 492-unit Santa Fe Apartments community in Cottonwood Heights was acquired for $79.5 million and the 88-unit Creekview Apartments community in Midvale was bought for $13.0 million. The properties are one mile apart.

* Microsoft Corp. leased 86,000 square feet at the Redmond Town Center mixed-use development in Redmond, Wash., the Puget Sound Business Journal reported, citing unnamed sources. Microsoft already occupies three buildings in the six-building development, with AT&T occupying the other three. AT&T declined to renew a lease for one of the buildings, which Microsoft has now leased, the report noted, citing the sources.

Microsoft is also planning a multibillion-dollar overhaul of its headquarters in Redmond to add 2.5 million square feet of additional office space to add up to 8,000 employees and is leasing office space elsewhere in the meantime, the report pointed out.

* The sales volume for Miami-Dade office properties fell 58% year over year in 2017 to more than $816 million, The Real Deal reported, citing Avison Young. The office investment sale volume in 2016 was more than $2.3 billion.

The average asking rent for class A office space in the Miami-Dade market increased 9% year over year to $45.10 per square foot, the report noted.

After the bell

* AvalonBay Communities Inc. disclosed fourth-quarter 2017 funds from operations attributable to common stockholders of $301.2 million, or $2.18 per share, a rise of 4.3% on a per-share basis from $299.1 million, or $2.09 per share, in the 2016 fourth quarter.

* Duke Realty Corp. reported 2017 fourth-quarter NAREIT FFO attributable to common shareholders of $118.8 million, or 33 cents per share, an increase of 13.3% in the aggregate from $104.9 million, or 29 cents per share, in the comparable 2016 period.

* Wheeler Real Estate Investment Trust Inc. appointed Chief Accounting Officer Matthew Reddy as CFO, effective immediately.

* Office landlord SL Green Realty Corp. and Canada's Ivanhoe Cambridge Inc. are looking to sell their jointly owned office condominium in New York City for $650 million, The Real Deal reported, citing Real Estate Alert.

The day ahead

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

In Asia, the Hang Seng was down 0.75% to 32,642.09. The Nikkei 225 rose 1.68% to 23,486.11.

In Europe, as of midday, the FTSE 100 slid 0.03% to 7,531.36, and the Euronext 100 was up 0.38% to 1,067.00.

On the macro front

The motor vehicle sales report, the Market Focus report, the jobless claims report, the PMI Manufacturing index, the ISM manufacturing index, the EIA natural gas report, the Fed balance sheet and the money supply report are due out today.

The Daily Dose is updated as of 7:30 a.m. ET. Some external links may require a subscription. Articles and links are correct as of publication time.