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Brookdale ends strategic review; QTS Realty starts restructuring effort

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Brookdale ends strategic review; QTS Realty starts restructuring effort

S&P Global Market Intelligence offers our top picks of U.S. real estate news stories and more published throughout the week. Please note that some entries may have links to third-party sources that may require a subscription.

No go

* Brookdale Senior Living Inc. concluded its review of strategic options without reaching a deal, partly because of its complex ties with major landlords, including Ventas Inc. and Welltower Inc. Addressing the review on an earnings call, Brookdale executives said the company must obtain landlord consent before it can proceed with a transaction. The seniors housing operator said it rejected a $9-per-share cash offer from a potential acquirer and announced management changes, including the resignation of T. Andrew Smith as president and CEO.

* On the IPO front, Aspen REIT Inc. halted its public float on the NYSE as the single-asset real estate investment trust works to re-tool its crowdfunding distribution channel.

Changing course

* QTS Realty Trust Inc. introduced a restructuring plan that would see the company shift its focus to hyperscale and hybrid colocation and away from its noncore C3, cloud and managed services products. The data center REIT came under pressure from an activist investor to consider a possible public-to-public merger transaction when its stock plummeted a day after announcing the strategic shift.

New lease on life

* To keep its ties with Genesis Healthcare Inc., healthcare REIT Welltower Inc. amended its master lease with the skilled nursing facility operator. Under the restructured master lease, the troubled tenant's obligation will be reduced by $35 million and the term will be extended by five years. On an earnings call, Welltower executives defended the move and reaffirmed the company's commitment to the skilled nursing sector.

Sabra Health Care REIT Inc., another major Genesis landlord, is in the process of selling all but eight of the 54 facilities it leases to Genesis.

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Exterior view of the Grand Hyatt hotel in downtown San Francisco
Source: Associated Press

One-in-a-billion deals

* Lodging REIT Host Hotels & Resorts Inc. struck a $1 billion deal to buy three hotels in Hawaii, San Francisco and Florida from Hyatt Hotels Corp. The hotels will remain under Hyatt's management and the transaction is slated to close by the end of the first quarter.

* Affiliates of Winthrop Realty Liquidating Trust, an entity formed to complete the liquidation of diversified REIT Winthrop Realty Trust, will sell the property at 701 7th Ave. in New York City to 20 TSQ Owner Mezz LLC in a $1.53 billion deal set to close by April 30.

* Asset manager KBS Realty Advisors is offering its new $1 billion real estate fund on the CrowdStreet Marketplace, the online platform of fintech company CrowdStreet Inc. The move allows more investors to directly buy shares in institutional commercial real estate online.

Closing time

* Timber REIT Potlatch Corp. finalized its $3.3 billion all-stock merger with Deltic Timber Corp. The resulting entity changed its name to PotlatchDeltic Corp. and will trade on the Nasdaq Stock Market under the ticker PCH.

* Office REIT Equity Commonwealth closed on the $510 million sale of Groupon Inc.'s headquarters building in Chicago to Sterling Bay and institutional investors advised by J.P. Morgan Asset Management.

Earnings Call Coverage

As the 2017 fourth-quarter earnings season picked up steam, S&P Global Market Intelligence reporters tuned in to conference calls hosted by some of the larger players in the real estate sector.

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Welltower execs defend continued relationship with Genesis Healthcare

REIT relationships complicated a potential Brookdale sale, execs say

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