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Essential IR Insights Newsletter - February 2023

UDR considering play for Mack-Cali Realty; VICI, Gaming & Leisure urged to merge

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

M&A field

* Multifamily landlord UDR Inc. is weighing a possible merger with fellow real estate investment trust Mack-Cali Realty Corp., and is in talks with Rizk Ventures CEO Thomas Rizk about forming a partnership for the potential deal, Reuters reported, citing unnamed sources.

The purported merger talks came just hours after Mack-Cali said the company has determined to sell its entire suburban office portfolio encompassing about 6.6 million square feet, with closing expected in 2020.

Initially, the company is selling two suburban office portfolios in New Jersey for about $285 million in cash and $3.5 million of assumed lease obligations.

* Activist shareholder Land & Buildings Investment Management LLC called for a merger between Gaming & Leisure Properties Inc. and VICI Properties Inc., saying the potential tie-up would be a "win-win" for the two casino REITs.

* Temple Hotels Inc. agreed to Morguard Corp.'s C$2.10 per-Temple-common-share, all-cash buyout offer, with closing supposed to occur no later than March 31, 2020, subject to certain closing conditions.

* RE/MAX Holdings Inc. acquired real estate technology startup First, which offers an intelligent coaching platform via its First application, designed to help real estate agents identify future listings within their personal network.

* Liberty Property Trust will convene a special shareholder meeting Jan. 30, 2020, to vote on the company's roughly $12.6 billion proposed merger deal with fellow industrial REIT Prologis Inc.

* Steadfast Income REIT Inc. and Steadfast Apartment REIT III scheduled separate special shareholder meetings March 2, 2020, to vote on their proposed merger with fellow multifamily REIT Steadfast Apartment REIT Inc. Such a merger will form a moderate-income apartment REIT with roughly $3.3 billion in gross real estate assets.

* Condor Hospitality Trust Inc. and NexPoint Hospitality Trust will close their roughly US$318 million merger transaction Jan. 31, 2020, subject to the satisfaction or waiver of certain remaining closing conditions.

Upcoming IPO

* Broadstone Net Lease Inc. confirmed its plan to conduct an IPO of an undisclosed number of its common shares in 2020, subject to market conditions and other factors. The real estate company was recently reported to have tapped Goldman Sachs Group Inc. and JPMorgan Chase & Co. for the potential IPO, with a view to raising about $600 million.

WeWork's gold deal

* Coworking giant WeWork Cos. Inc. and investor SoftBank Group Corp. secured a commitment from Goldman Sachs Group Inc. to receive $1.75 billion in new financing starting in January 2020, Bloomberg News reported, citing WeWork spokesperson Erin Clark. The We Co. unit will not be required to post any cash collateral, and WeWork and Softbank are co-obligors on a senior secured and unsecured basis, respectively, the news outlet quoted Clark as saying.

Special treats

* Vornado Realty Trust declared a special dividend of $1.95 per share, thanks to its recent sales. The dividend will be paid Jan. 15, 2020, to shareholders of record as of Dec. 30.

* Host Hotels & Resorts Inc. approved a special dividend of 5 cents per common share that will be paid along with the regular quarterly cash dividend of 20 cents per share Jan. 15, 2020, to stockholders of record Dec. 31.

* Choice Properties Real Estate Investment Trust declared a special noncash distribution of 7 Canadian cents per trust unit payable Dec. 31 to unit holders of record at the close of business on the same date. The distribution stems from the company's recently closed C$426 million sale of a 30-property portfolio.

Big bets on mass properties

* Healthcare REIT Healthpeak Properties Inc. entered into an agreement that gives it an option to acquire up to 24 senior housing development properties in California from Oakmont Senior Living LLC. The agreement states that Oakmont will sell the portfolio, which has a projected value of approximately $1.3 billion, at its discretion, in tranches between 2020 and 2023.

* Hyatt Hotels Corp. sold the 615-room Grand Hyatt-Seoul hotel for approximately $481 million to a consortium led by Hong Kong-based investor PAG and Seoul-based Inmark Asset Management.

* Sealy & Co. LLC-sponsored Sealy Strategic Equity Partners LP sold a 16.3 million-square-foot industrial property portfolio to DRA Advisors LLC for $908.5 million.

* Hines Global REIT Inc. agreed to sell The Summit office portfolio in Bellevue, Wash., for about $756.0 million, excluding transaction costs and closing prorations. The company will also sell the Riverside Center office complex in Newton, Mass., separately for about $235.0 million, excluding transaction costs and closing prorations.

* Kennedy Wilson acquired five multifamily communities, totaling 1,008 units across Washington, Oregon, Colorado, Nevada and New Mexico, for $342 million in an off-market transaction.

* J.P. Morgan Investment Management Inc. paid about $206.3 million to acquire the 312,700-square-foot, Inc.-leased Alexandria building in downtown Seattle from Heitman America, the Puget Sound Business Journal reported, citing the sales affidavit.

Of conversions & internalization

* Jernigan Capital, which aims to transform into an equity REIT, moved to internalize its external manager after agreeing to acquire all business assets and liabilities of its external adviser, JCAP Advisors LLC. The transaction, which is expected to close in the first quarter of 2020, is subject to stockholder approval, among other conditions.

* The Ontario Superior Court of Justice granted a final order to First Capital Realty Inc. to convert to a REIT from a corporation, with the conversion expected to become effective Dec. 30.

* The board of Global Medical REIT Inc. formed a committee of independent and disinterested directors to review a potential management internalization deal under a management agreement signed July 1, 2016, between the company and its external manager, Inter-American Management LLC.

S&P Global Market Intelligence will not publish The Week in US Real Estate on Dec. 27, 2019, and Jan. 3, 2020. The next article in this feature will be published Jan. 10, 2020.