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Simon Property logs Q2 results; NYC property selling for $900M

Commercial real estate

* Simon Property Group Inc. logged a 19.9% year-over-year increase in second-quarter funds from operations to $1.06 billion from $884.7 million. FFO per share increased 20.6% year over year to $2.98 from $2.47.

* A joint venture between L&L Holding Co. and Normandy Real Estate Partners will acquire a former freight warehouse in Manhattan, N.Y.'s Chelsea neighborhood for about $900 million, The Wall Street Journal reported, citing people familiar with the deal. The deal triples the valuation of the full-block Terminal Stores building from four years ago, the publication pointed out.

The buyers intend to invest "a significant amount" into the redevelopment of the property. The report noted that L&L and Normandy have a track record of revitalizing historic and underused properties.

* Eretz Group received a $185 million loan from Aareal Capital Corp. to refinance the 295 Madison Ave. tower in midtown Manhattan, The Real Deal reported. The 45-story tower spans 301,000 square feet. The loan replaces a $169 million financing from Bank of China from 2015, the report noted, citing property records.

* The newly branded Mountain of Beverly Hills property in Beverly Hills, Calif., is being put up for sale with a $1 billion asking price, The New York Times reported. The 157-acre hilltop plot is understood to be owned by limited liability company Secured Capital Partners. The site carries permission for the development of almost 1.5 million square feet of living space across a number of buildings, according to the report.

* Armada Hoffler Properties Inc. plans to develop a new 12-story mixed-use waterfront building at the Harbor Point development in Baltimore. The $117 million Wills Wharf project will span more than 325,000 square feet of class A office, retail, and hotel space. The company expects to pre-lease more than 100,000 square feet of office space at the project before commencing construction. The project is slated for delivery in the first quarter of 2020.

* Armada Hoffler also plans to invest in the office and retail component of The Interlock mixed-use project in Atlanta's West Midtown in a public-private partnership with the university Georgia Tech, which will be the anchor office tenant and ground lessor. The master developer is SJ Collins Enterprises.

Armada Hoffler will provide a participating mezzanine loan. The company expects the project to be roughly 60% pre-leased prior to groundbreaking. Georgia Tech will take up 50,000 square feet of office space.

* A Reuters investigation into properties of single-family home landlord Invitation Homes Inc. found that renters face a number of problems in the homes where the company advertises a "worry free" experience. The news outlet noted that critics of large companies' forays into the rental market complain that the companies "lean hard on tenants to satisfy investors."

Tenants have also complained about excessive rent increases and fees, with a proposed class-action lawsuit filed in May.

Invitation Homes, as a Blackstone Group LP unit, went public in February 2017 and became the largest landlord of single-family homes in the U.S. by number of rental units after its merger with Starwood Waypoint Homes in November 2017.

* Granite REIT said Magna International Inc. subsidiaries exercised a right of first refusal regarding a third party's roughly US$207 million offer to buy Granite's two remaining special purpose properties in the U.S. The properties, located in Piedmont, S.C., and Clinton, Tenn., total roughly 1.6 million square feet.

The Canada-based REIT said closing of the deal is expected in the third quarter. With the properties producing net operating income of roughly US$14.2 million, the deal reflects an implied capitalization rate of 6.9%.

The day ahead

Early morning futures indicators pointed to a mixed opening for the U.S. market.

In Asia, the Hang Seng was down 0.25% to 28,733.13. The Nikkei 225 slid 0.74% to 22,544.84.

In Europe as of midday, the FTSE 100 was down 0.07% to 7,696.08, while the Euronext 100 was down 0.30% to 1,077.55.

On the macro front

The pending home sales index is due out today.

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