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REIT Replay: Open and shut


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REIT Replay: Open and shut

Real estate investment trusts and the broader markets ended in the black Friday, Aug. 4, as the spinoff of one REIT and privatization of another made the headlines.

The MSCI US REIT Index (RMZ) rose 0.30% to close at 1,163.21, and the SNL US REIT Equity Index gained 0.33% to end the week at 315.72. The Dow Jones Industrial Average added 0.30%, closing at 22,092.81, while the S&P 500 closed 0.19% higher at 2,476.83.

Spirit Realty Capital Inc. said Thursday that it intends to spin off substantially all of its Shopko-leased properties and its Master Trust 2014 assets into a separate, publicly traded REIT, which is expected to have more than 925 properties, with a gross real estate investment of $2.7 billion.

Spirit Realty shares rose 3.22% to end the day at $8.34.

Smart Real Estate Investment Trust and Strathallen Acquisitions Inc. struck a deal to acquire OneREIT in a transaction valued at C$1.1 billion, according to a Friday release.

SmartREIT shares dipped 1.36% to C$30.50 and OneREIT shares surged 12.63%, closing at C$4.19.

Bluerock Residential Growth REIT Inc. and its external manager agreed to bring the REIT's management in-house, according to a Friday release. Under the definitive agreement, BRG Manager's existing management team and certain employees will remain with the company.

Bluerock Residential shares plunged 16.90% to close at $11.26.

Proxy adviser Glass Lewis & Co. LLC recommended that Sabra Health Care REIT Inc. shareholders vote for the company's planned common share issuance as part of its proposed merger with Care Capital Properties Inc., contrary to recommendations by two Sabra shareholders, according to a Thursday release.

Sabra shares fell 2.04% to $23.09 and Care Capital shares rose 1.13% to close at $24.95.

Also on Thursday, Regency Centers Corp. and RioCan Real Estate Investment Trust reported year-over-year gains in their respective second-quarter financial results.

Shares of Regency Centers gained 0.91% to $66.73 and RioCan shares lost 0.29%, closing at C$23.91.

Urban Edge Properties said Thursday that it plans to raise gross proceeds of $155 million through the sale of 6,250,000 common shares to Cohen & Steers Capital Management Inc.

Urban Edge shares added 3.20%, closing at $25.46.

Cominar Real Estate Investment Trust on Friday detailed a refinancing plan for its outstanding unsecured debentures, which amount to C$1.73 billion with a 4.29% average interest rate, according to CEO Michel Dallaire.

Cominar REIT shares slipped 4.69% to close at C$12.41.

Iron Mountain Inc. said Friday that one of its subsidiaries intends to redeem all of its C$200 million worth of outstanding 6.125% senior notes due 2021 on Aug. 15.

Shares of Iron Mountain fell 1.07% to close at $37.00.

Invitation Homes Inc., which wrapped up its IPO in February, said Friday that it will pay a quarterly cash dividend of 8 cents per common share.

Invitation Homes shares ticked up 0.38% to close at $21.16.

Brookfield Property Partners LP landed a $784 million loan to refinance its One Liberty Plaza office tower in Lower Manhattan, N.Y., The Real Deal reported Friday.

Brookfield Property shares closed 0.13% higher at C$30.01.

On the macro front, Green Street Advisors' Commercial Property Price Index inched higher in July. "Some property types are doing better than others, but, in aggregate, pricing has flattened out recently," a Green Street senior analyst said in a Friday note.

Earnings call coverage

Spirit Realty says spinoff more practical, 'executable' than sale: Market timing and probability of success were among the primary drivers behind the decision to spin off $2.7 billion of assets, President and CEO Jackson Hsieh said on the company's second-quarter earnings call.

Despite falling revenue, RLJ Lodging optimistic on FelCor deal: Revenue per available room was down across the company's portfolio in the second quarter, but the company's CEO expressed optimism about the company's acquisition of FelCor Lodging Trust.

CBL & Associates management sheds light on B-mall demand: On an earnings call, management described the pool of buyers for the company's assets in recent deals as adequate but "not incredibly deep."

Now featured on S&P Global Market Intelligence

The Week in US Real Estate: Spirit Realty spins off; Wyndham Worldwide unwinds: The Aug. 4 weekly news roundup in the North American real estate space also features new developments in the Sabra Health Care REIT-Care Capital Properties merger and numerous capital-markets activities.

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