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REIT Replay: Invitation to a merger

Real estate investment trusts and the broader markets closed in the red on Thursday, Aug. 10, as Invitation Homes and Starwood Waypoint Homes announced a merger agreement that would create a single-family behemoth.

The MSCI US REIT Index (RMZ) slid 0.75% to 1,144.45, and the SNL US REIT Equity Index gave up 0.69% to close at 310.85. The Dow Jones Industrial Average dropped 0.93% to end the day at 21,844.01, while the S&P 500 shed 1.45% to close at 2,438.21.

Invitation Homes Inc. and Starwood Waypoint Homes announced they would combine in an all-stock deal to form a single-family rental REIT with an $11 billion market cap and a total enterprise value of $20 billion.

While the combined company will keep the Invitation Homes name and headquarters, executives stressed on a call that the deal is a merger of equals. Starwood Waypoint CEO Fred Tuomi emphasized that the companies, which will own 82,000 homes when combined, are "nearly identical."

Invitation Homes shares popped 3.91% to end at $21.81, while Starwood Waypoint shares surged 5.15% to $35.35.

Bluerock Residential Growth REIT Inc. provided a forecast on its 2018 common stock dividend after investors expressed concern about the company's pending management internalization and declining share price. The 2018 annual dividend is expected to come in between 65 cents and 75 cents per share for an annual yield of 6.5% to 7.0% based on the company's Aug. 9 closing stock price of $10.68 per share.

Bluerock shares inched 0.09% higher, to $10.69.

New York REIT provided an update on the amount of liquidating distributions it expects to make when it completes its liquidation. The per-share amount declined 4 cents from the previous estimate to $9.21.

Shares of New York REIT lost 1.88% to close at $8.34.

SL Green Realty Corp. agreed to sell its 16 Court St. office building in Brooklyn, N.Y., to the CIM Group for $171.0 million. The sale of the 36-story tower is expected to generate net cash proceeds of $164.0 million when it closes. SL Green purchased the property through a joint venture for $107.5 million in 2007.

SL Green shares declined 1.64%, ending at $100.03.

Douglas Emmett Inc. secured four refinance loans aggregating $550 million. Brokerage firm Walker & Dunlop Inc. structured and closed the interest-only financing in the second quarter with an all-in rate of less than 3.2%.

Shares of Douglas Emmett dropped 0.56% to $37.58.

Morguard Corp. picked up a Chicago mixed-use asset with 515 suites and 18,000 square feet of commercial space for C$286.8 million during July, among other purchases disclosed in the company's second-quarter earnings results.

Morguard shares added 2.07% to close at C$176.99.

H&R Real Estate Investment Trust reported a 9.2% decline in its second-quarter funds from operations. In announcing its earnings, the company also disclosed an initial investment of C$4.9 million in land in Austin, Texas, where the company plans to build a 391-unit multifamily property.

Shares of H&R posted a decline of 2.18%, ending the day at C$20.21.

During the week ended Aug. 5, U.S. hotels saw declines in occupancy and revenue per available room of 1.5% to 74.5% and 0.8% to $96.08, respectively. Average daily rate, however, ticked 0.7% higher, to $129.00.

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