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In Trumpsition; actively speaking

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In Trumpsition; actively speaking

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.

In Trumpsition

* Facing pressure to resolve potential conflicts of interest, President Donald Trump reportedly started transitioning his New York City real estate holdings into the Donald J Trump Revocable Trust. Starting Dec. 31, 2016, 71 properties have reportedly been transferred into the New York-registered trust, which Trump has promised would not be controlled by him. An office building Trump co-owns with Vornado Realty Trust and certain other properties have yet to be officially transferred, according to a Jan. 30 report in The Real Deal.

Trump's son-in-law, Jared Kushner, also shed his stake in the 39-story office and retail tower at 666 Fifth Ave. in Manhattan, N.Y., for an undisclosed sum, Thompson Reuters' IFR reported Jan. 31, citing a Kushner Cos. spokesperson. Kroll Bond Rating Agency had previously pegged the value of the property, which is jointly owned by Kushner Cos. and Vornado, at $982.1 million, according to the Jan. 31 report.

* In macro news, real estate industry leaders surveyed by KPMG LLP expressed optimism that the U.S. real estate market will experience continued growth in 2017 and beyond, and as such, they plan to increase their investments in the sector this year. The surveyed executives, however, cited regulatory concerns under the Trump administration, higher interest rates and cybersecurity issues as the top three challenges they expect to face in 2017.

Actively speaking

* Forest City Realty Trust Inc. came under pressure this week to pursue strategic and structural change in order to realize its full value. In a Jan. 30 letter, activist investor Land & Buildings Investment Management LLC took aim at what it called "bloated" general and administrative liabilities. Jonathan Litt called for a special shareholder meeting following the 2017 annual meeting to allow shareholders to vote on all 13 board seats and present alternate candidates, as well as the formation of a special committee of independent board members that would be charged with exploring strategic alternatives.

Responding to Litt's letter, Forest City said it was "surprised" that Land & Buildings would opt for a "counterproductive path" before the company's independent director nominees are even identified. It noted that it will vet and consider the investor's board nominees in its search for two new independent directors.

Back-to-Blackstone

* Blackstone Group LP was back in the news this week, as the IPO of its single-family rental unit priced at $20.00 per share. Invitation Homes Inc. said Jan. 31 that it issued 77.0 million shares in the offering, which it expects to close Feb. 6. The company plans to use the net proceeds for debt repayment and payment of transaction-related fees and expenses.

The private equity giant and its affiliate, Equity Office, are also planning a $500 million overhaul of the 43-year-old Willis Tower in downtown Chicago.

Green-lit

* Farmland Partners Inc. and American Farmland Co. won shareholder approvals for their merger this week and subsequently completed the transaction. The companies said Feb. 2 that the merger forms the country's largest public farmland REIT. The Denver-based postmerger entity retained the Farmland Partners name and is about 60.89%-owned by Farmland Partners shareholders and 39.11%-owned by American Farmland stockholders.

* Behringer Harvard Opportunity REIT I Inc. disclosed in a Feb. 2 filing that its shareholders gave the go-ahead for its liquidation and dissolution plan at the company's reconvened annual meeting Jan. 30. Under the plan, the REIT will sell all of its assets, dissolve and distribute the net proceeds to stockholders.

Buy and sell

* Paramount Group Inc. revealed Feb. 1 that it is offloading the Waterview office building in Rosslyn, Va., in a $460 million transaction that should be completed in the second quarter. The buyer was not identified, but Morgan Stanley Real Estate was earlier reported to have won the bid for the property.

* InvenTrust Properties Corp. said Feb. 2 that it bought Paraiso Parc and Westfork Plaza in Pembroke Pines, Fla., for $163 million. The adjacent retail centers will comprise about 389,000 square feet once ongoing expansion work is completed mid-2017.

* CBL & Associates Properties Inc. announced Jan. 30 that it picked up five Sears department stores and two Sears Auto Centers at the REIT's malls in a sale-leaseback deal valued at $72.5 million. The company expects to receive roughly $5.1 million in aggregate initial base rent from the department stores under 10-year leases with Sears.

Conference call coverage

S&P Global Market Intelligence tuned in to conference calls hosted by some of the larger players in the real estate sector, as the fourth-quarter 2016 earnings season kicked into high gear during the week ending Feb. 3.

David Simon's advice in 'dog-eat-dog' new normal: Spruce up your stores: On an earnings call, Simon Property's CEO attributed the company's performance in a cutthroat retail climate to its belief in its properties and its resulting willingness to invest in them.

Boston Properties on potential tax reform impact: Too early to tell: On an earnings call, executives addressed the impact the new administration and new Congress is having on their operations.

Scant growth in San Francisco rents through 2017, AvalonBay execs say: An unpredictable technology sector makes the market difficult to forecast, COO Sean Breslin said in an earnings conference call.

Equity Residential scrambles to attract New York tenants, execs say: The city's apartment market is "one of the most undisciplined," as landlords offer multiple months of free rent amid a flood of new supply, Equity Residential's COO said in an earnings conference call.

Besides Houston, Sun Belt multifamily is strong, Mid-America execs say: The company's relatively optimist forecasts for most of its markets stand in contrast to recent comments from executives at REITs that own properties in large coastal cities.

CBL & Associates CEO on former Macy's space: 'It's pretty much a blank canvas': On an earnings call, the mall REIT's leadership outlined redevelopment avenues the company may take to backfill space vacated by Macy's.

GGP's Mathrani touts high occupancy despite retailer downsizing: Analysts on the company's year-end earnings call focused on drawing out more detail about the ongoing wave of retailer store closures and bankruptcies and the company's efforts to combat it.

New York, San Francisco apartment markets will struggle in '17, UDR execs say: Though rent growth remains weak, there are signs a turnaround could come in 2018, company executives maintained in a conference call.

Featured during the week on S&P Global Market Intelligence

Data Dispatch: In echo of '07, REITs back away from multifamily: After a long climb in the value of multifamily properties, REITs sold off apartment buildings in 2016 at a pace not seen in nearly a decade.

Data Dispatch: New York, San Francisco emerge as worst-performing multifamily markets: The coastal markets have enriched apartment investors in recent years. However, effective rents turned negative in the fourth quarter as large slugs of supply come online.

Data Dispatch: January state of the US housing market: Data released over the last month indicated a generally healthy U.S. housing market, with home prices and housing starts on the rise and existing- and new-home sales slowing.