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REIT Replay: On the bubble


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REIT Replay: On the bubble

The broader markets edged higher Tuesday, Dec. 13, as the Dow Jones Industrial Average moved closer than ever to the 20,000 milestone mark. REITs, meanwhile, closed mixed as Taubman Centers received a shareholder letter criticizing its founding family's large stake in the company's preferred stock.

The MSCI US REIT Index (RMZ) fell 0.03% to 1,147.58, and the SNL US REIT Equity Index ticked up 0.05% to 306.69. The Dow Jones Industrial Average gained 0.58% to close at 19,911.21, while the S&P 500 added 0.65% to end the day at 2,271.72.

Taubman Centers Inc. took more flak from shareholder activist Land & Buildings Investment Management LLC over the Taubman family's large stake in the REIT's preferred stock, which the activist said equates to 30% of the company's overall voting stock.

In a letter publicized Tuesday, Land & Buildings' Jonathan Litt argued that the Taubman family's ownership of 25 million shares of series B preferred stock could threaten the REIT's status and likely represents a violation of its charter. As such, Litt called on the company's audit committee to hire independent advisers to ensure the board enforces the 8.23% share ownership limit stipulated in the charter.

Taubman shares inched up 0.56% to close at $75.21.

National Storage Affiliates Trust after markets closed Monday priced a public offering of 4.5 million common shares of beneficial interest for estimated gross proceeds of roughly $94.5 million. The company will use the net proceeds from the offering, set to close on or about Dec. 16, primarily to repay amounts outstanding under its revolving line of credit.

Shares of National Storage Affiliates slipped 5.88%, closing at $20.95.

Also on Monday, Extended Stay America Inc. and ESH Hospitality Inc. said the secondary offering of 12.5 million of their paired shares priced and could generate roughly $206.3 million in gross proceeds. Certain affiliates of Blackstone Group LP, Centerbridge Partners LP and Paulson & Co. Inc. are selling the shares in the offering, which is slated for a Dec. 16 close.

Extended Stay shares slid 2.56% to close at $16.39.

Hudson Pacific Properties Inc. announced Tuesday that it spent $150 million, before certain adjustments, to acquire a leasehold interest in the Page Mill Hill office campus in Palo Alto, Calif. The acquisition of the five-building, 182,676-square-foot property adds to the company's footprint in Palo Alto's Stanford Research Park.

Hudson Pacific shares declined 0.17%, closing at $34.26.

In a Tuesday release, Liberty Property Trust provided a funds-from-operations outlook for 2017 in the range of $2.40 to $2.52 per share and maintained its 2016 FFO per-share estimate in the range of $2.36 to $2.38.

The company added that it expects to trim its dividend to 40 cents per share with its upcoming April 2017 payout following its repositioning and asset sales. In terms of its development pipeline, the company said it has had seven development starts representing $200 million since the start of 2016.

Liberty Property shares ticked down 0.25% to close at $40.56.

InvenTrust Properties Corp. on Tuesday said it tapped former Global Logistic Properties executive Adam Jaworski as senior vice president and chief accounting officer, replacing Anna Fitzgerald, who left the company in June. The appointment was effective immediately.

Global Net Lease disclosed in a Tuesday filing that it agreed to sell up to $175 million of its common shares from time to time under an equity distribution agreement signed with a group of agents.

Global Net Lease shares edged 0.13% lower to close at $7.90.

Smart Real Estate Investment Trust on Tuesday said it is partnering with residential developer Jadco Corp. on a more than C$75 million joint-venture project in Canada. The project will involve the development of two 15-story towers in greater Montreal on a portion of the REIT's shopping center land.

Smart REIT shares fell 1.07% to end the day at C$31.39.

On the macro front, CoreLogic reported that U.S. foreclosure inventory dipped 31.5% in October. Completed foreclosures fell 24.9% year over year in October, dropping to about 30,000 in October from about 40,000 in October 2015.

Now featured on S&P Global Market Intelligence

Data Dispatch: Multifamily lending keeps towering: Multifamily loans continued their brisk double-digit growth in the third quarter of 2016, even as industry participants prepare for some softening in the space.

US real estate companies pay 21 special dividends YTD: Eighteen SNL-covered publicly traded U.S. real estate companies made special dividend payments year-to-date as of Dec. 6. Diversified REIT Gyrodyne made the largest single per-share payment among the group.

Market prices and index values are current as of the time of publication and are subject to change.