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SoftBank to slash new WeWork investment; StorageMart lands $814M refinancing

Commercial real estate

* Japan's SoftBank Group Corp. is in detailed talks to invest US$2 billion in WeWork Cos. Inc. in 2019, down from the previously reported US$16 billion planned commitment, and will not take a majority stake in the coworking startup, London's Financial Times reported, citing unnamed sources. The potential investment in WeWork could be announced as soon as this week and will not include the participation of the SoftBank Vision Fund, which is already a key investor in WeWork, the publication added, citing the sources.

According to one of the sources, complications to negotiations on valuation with SoftBank could lead WeWork executives to accelerate the company's plan for an IPO. SoftBank's decision to scale back its planned investment in WeWork would not impact the coworking giant's overall strategy, the report added, citing people close to the deal.

* Private self-storage facilities chain StorageMart obtained $814.1 million refinancing from Citi Real Estate Funding for 101 locations that offer 7.5 million square feet of self-storage space in 17 states, Commercial Observer reported.

* GFP Real Estate plans to carry out a $250 million redevelopment of the 27-story property at 7 Hanover Square in Manhattan, N.Y.'s Financial District it agreed to purchase in January 2018, The Real Deal reported. Nonprofit corporation NYC Health + Hospitals signed a lease for 527,000 square feet at the building via a $758 million contract that runs through 2043, the Jan. 7 report added, citing GFP and the nonprofit.

GFP, in partnership with Northwind Group, agreed to buy the building for $310 million, and plans to divide the property into two buildings with new addresses of 100 Pearl St. and 50 Water St. The purchase is expected to close in October.

* Ryman Hospitality Properties Inc. closed its roughly $235 million purchase of an additional stake in a joint venture that owns the Gaylord Rockies Resort & Convention Center project in Aurora, Colo. The stake was acquired from Aurora Convention Center Hotel Partners LLC, AREG Aurora CCH LLC and RIDA Aurora LLC, the hotel real estate investment trust said in a filing.

Following the deal's completion, Ryman owns a roughly 61.2% interest in the partnership, while RIDA Development Corp. and other affiliates of the seller collectively hold a roughly 38.8% stake.

* AMLI Residential Properties LP, through PPF AMLI 801 South Cherry Street LLC, acquired a 341-unit apartment complex at 801 S. Cherry St. in Glendale, Colo., from California-based MKS Residential for $108 million, BusinessDen reported, citing county records.

* Armada Hoffler Properties Inc. completed its initial investment in components of the under construction, approximately $245 million development in the West Midtown neighborhood of Atlanta. The Interlock's commercial office and retail portions, being developed by S J Collins Enterprises Inc., will receive up to $65 million of principal through a mezzanine loan from the REIT. The planned 345-unit apartment community named Solis Interlock, which Terwilliger Pappas is developing as part of the project, will also get a maximum investment of $23 million of principal through a mezzanine loan.

Armada said its guaranteed maximum price contracts will add approximately $170 million to third-party construction backlog. Upon completion in 2020, The Interlock is slated to offer 200,000 square feet of creative office space, 100,000 square feet of retail space and 345 apartment units. WeWork is under contract for 120,000 square feet of space at the 65% pre-leased commercial office and retail portions of The Interlock. Seventy single-family townhomes and a 140-room boutique hotel, which are also proposed at the development, are excluded from Armada's investment.

* Kimco Realty Corp. submitted proposals to build the new eight-story Kissena Center building in the Flushing neighborhood of Queens, N.Y., New York Yimby reported.

The project will offer a residential area of approximately 244,000 square feet, with 244 units positioned on floors three through eight. The ground floor will have retail space just under 58,000 square feet, while two levels of below-grade parking will feature 333 spaces. The shopping center-focused REIT expects full completion of the development by 2021.

* Meadow Partners and Trammell Crow Co.'s High Street Residential Inc. subsidiary obtained a $72.6 million mortgage loan from Mack Real Estate Credit Strategies to refinance their multifamily development in Washington, D.C., Commercial Observer reported. The new financing replaces previous construction debt on the 221-unit Valo Apartments project at the corner of M Street SW and Delaware Avenue SW.

* Intercontinental Real Estate Corp. is giving $61.9 million of equity to become part of Australia's LendLease Group and John Buck Co.'s joint venture development at 845 W. Madison St. in Chicago, The Real Deal reported, citing HFF. Work on the 586-unit West Loop luxury apartment project began in November 2018 and is expected to be completed in the summer of 2020.

* According to a December 2018 Redfin survey of more than 2,600 people in the U.S., people aged between 35 and 44 are the only age group that thinks the stock market is a better long-term investment than real estate. 52% of the people surveyed that are 35 to 44 years old would prefer investing in stocks as opposed to real estate. Redfin credits the results to the housing crash, which hit just as these buyers and sellers were most likely getting married, starting a family and becoming first-time homeowners.

The day ahead

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

In Asia, the Hang Seng was up 0.15% to 25,875.449. The Nikkei 225 rose 0.82% to 20,204.04.

In Europe, as of midday, the FTSE 100 increased 1.11% to 6,886.30, and the Euronext 100 rose 1.25% to 931.11.

On the macro front

The NFIB Small Business Optimism Index, the International Trade report, the Redbook report and the JOLTS 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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