REITs continued to slide, while the broader markets postedgains Friday, Sept. 30, as New York REIT responded to a pair of activistinvestors who are seeking board appointments.
The MSCI US REIT Index (RMZ) fell 0.64% to 1,195.57, and theSNL US REIT Equity Index shed 0.54% to finish at 320.03. The Dow JonesIndustrial Average, meanwhile, rose 0.91% to close at 18,308.15, while theS&P 500 gained 0.80% to end the day at 2,168.27.
Responding to the recent criticism by activist investors Michael Ashner andSteven Witkoff, co-owners of WW Investors, New York REIT's management in a Friday statement its search process fornew directors and said Ashner and Witkoff's desire to both manage New York REITand serve on its board have complicated the process.
According to the company, Ashner and Witkoff have beenoffered "reasonable terms" by the board, that proposed to includethem on New York REIT's proxy statement to be elected to the board and allowingthem to attend all board meetings and participate as observers before the voteis held.
Shares of New York REIT were down 0.22% to close at $9.15.
A secondary offering of 13.0 million paired shares ofExtended Stay AmericaInc. and its ESH Hospitality Inc. unit by certain affiliates ofBlackstone Group LP, CenterbridgePartners LP and Paulson & Co. Inc. at $14.25 per share, according toa Thursday release. Extended Stay noted that the company and its unit will notreceive any proceeds from the offering, which is expected to close Oct. 4.
Extended Stay shares dropped 2.27% to close at $14.20.
IndependenceRealty Trust Inc. on Thursday announced the of its public offering of 25.0million common shares at $9.00 per share, for $225.0 million in gross proceeds.The company has granted a 30-day option to the underwriters to acquire up to3,750,000 additional shares. Net proceeds are likely to go toward the fullrepayment of the company's $40.0 million senior secured term loan facility,payment of $43.0 million for its management internalization and the repurchase of up to 7,269,719common shares held by RAITFinancial Trust subsidiaries. Any remaining funds will be used torepay outstanding borrowings under the company's $325.0 million senior securedcredit facility. The offering is expected to close Oct. 5.
Independence Realty shares fell 2.60% to end the day at$9.00.
In personnel news, Silver Bay Realty Trust Corp. CFO Christine Battist leftthe company effective Sept. 29. The company tapped Chief Accounting OfficerJulie Ellis to take care of accounting, tax and financial policy matters, whileExecutive Vice President of Finance Griffin Wetmore will be responsible forcapital strategy and execution, as well as the company's treasury and investorrelations functions. Silver Bay said in a Thursday release that Battist's departure didnot come as a result of any dispute or disagreement with the company.
Silver Bay shares declined 2.34%, closing at $17.53.
National RetailProperties Inc. said Thursday that Craig Macnab will as its CEO, effectiveApril 28, 2017, after serving in that role since February 2004. Macnab, whowill also relinquish his board seat and hand over his chairman role to RobertLegler, the board's lead independent director, will be replaced by Presidentand COO Julian Whitehurst as CEO.
National Retail Properties shares declined 0.90% to close at$50.85.
On Friday, Lexington Realty Trust said it sold its three remainingland parcels underneath three hotels in New York City for a gross sales priceof approximately $338.2 million, reflecting a 13.6% GAAP capitalization rateand a 4.6% cash capitalization rate. The company expects to an estimated noncash impairmentcharge of roughly $65.0 million in the third quarter, mainly associated withthe writing off of the deferred rent receivable it recognized under GAAP.
Lexington Realty shares dropped 0.39% to end the day at$10.30.
The Federal Bureau of Prisons extended its contract for aGEO Group Inc.-ownedcorrectional facility in Folkston, Ga., by two years, the company said in aFriday release. The renewedcontract at the D. Ray James Correctional Facility will run throughSept. 30, 2018. The renewal follows an announcement by the U.S. JusticeDepartment, which supervises the Bureau of Prisons, that it would seek to endits use of private prisons.
Shares of GEO Group were up 2.19%, closing at $23.78.
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The Week in US Real Estate: Catching heat; getting the greenlight: The Sept. 30 weekly news roundup in the North American realestate space features shareholder activism at two REITs and a hotel M&Adeal winning shareholder approval after a bumpy ride.
Data Dispatch: Timing of Monogram Residential sale talk raiseseyebrows, analysts say: While the multifamily REIT may be anattractive acquisition target for a wide range of potential buyers, reports ofa potential sale are emerging earlier than some observers might have expected.
Data Dispatch:In the Lehigh Valley, an industrial building boom rivaling the InlandEmpire's: Some observers say the Lehigh Valley in Pennsylvania andNew Jersey is on its way to becoming the next Inland Empire, the west coastindustrial mega-market outside Los Angeles. The extraordinary building boom andrising rents in the market suggest they may be right.
Best of SNL:Real Estate, most read: The 10 mostread real estate articles for the week ending Sept. 30.
Best of SNL:Real Estate, editors' picks: Ourreal estate editors' picks for the best stories of the week ending Sept. 30.
The ShortReport: REITs notch short interest gains in September 1st half:U.S. equity REITs saw average short interest rise 12 basis points during thefirst half of September, reaching 3.28% of outstanding shares.
The ShortReport: 1st half of September sees rise in gaming short interest:Wynn Resorts saw the biggest short-interest gain and was also the most-shortedgaming stock during the first half of September.
The ShortReport: Homebuilder short interest slips in September 1st half: WCICommunities saw the greatest short-interest gain, while LGI Homes was themost-shorted homebuilding stock during the first half of September.
Market prices andindex values are current as of the time of publication and are subject tochange.