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Prologis completes $4B Industrial Property deal; BMO Capital lowers REITs

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Prologis completes $4B Industrial Property deal; BMO Capital lowers REITs

S&P Global Market Intelligence offers our top picks of U.S. real estate news stories and more published throughout the week.

Mega deal closures

* Industrial real estate investment trust Prologis Inc. completed its acquisition of the 100%-owned real estate assets of Industrial Property Trust Inc. for approximately $4 billion in cash, including the assumption and repayment of debt, in a deal that covered 37.5 million square feet across 236 properties.

* Temperature-controlled warehouse REIT Americold Realty Trust closed its takeover of Nova Cold Logistics, a Canada-based owner and operator of three temperature-controlled storage facilities. The REIT agreed to acquire Nova Cold Logistics in November 2019 from a Brookfield Asset Management Inc. subsidiary and its institutional partners for C$337 million.

* Global investment management firm Colony Capital Inc. completed its purchase of secondary equity interests in data center operator DataBank Holdings Ltd. for $185 million. Allstate Investments LLC, one of the selling shareholders, retained a 50% stake in DataBank, while Edgewater Services LLC, also known as Edgewater Funds, no longer owns an interest in the business. Nuveen kept its original stake in DataBank.

Big price tags

* Healthcare REIT Medical Properties Trust Inc. completed its acquisition of the real estate interests of 30 hospitals in the U.K., with the company investing roughly £1.5 billion in the transaction.

* Urban office REIT Alexandria Real Estate Equities Inc. detailed its recent property transactions, including its $525.5 million acquisition of the Arsenal on the Charles campus in the Cambridge/Inner Suburbs submarket of Greater Boston.

Also in December 2019, the company paid $291.0 million to buy two office buildings offering 478,000 rentable square feet in the Greater Stanford submarket of San Francisco.

* Data center landlord Equinix Inc. wrapped up its $175 million all-cash transaction to purchase three data centers in Mexico from Axtel SAB de CV. The facilities offer approximately 115,000 square feet of colocation space.

* Normandy Real Estate Partners LLC and joint venture partners Angelo Gordon & Co. LP and George Comfort & Sons Inc. are looking to sell the 745,500-square-foot office property at 575 Lexington Ave. in New York City for more than $650 million, Commercial Observer reported, citing an unnamed source. The 35-story property counts The We Co. unit and coworking giant WeWork Cos. Inc. among its tenants.

* The Trump Organization LLC, the real estate business of U.S. President Donald Trump, will accept bids from interested parties in the Trump International Hotel in Washington, D.C., until Jan. 23, The Wall Street Journal reported. The business was originally said to be seeking more than $500 million for the hotel's lease rights.

* BentallGreenOak and Synergy Investments are considering selling the Center Plaza office property encompassing more than 740,000 square feet in Boston, Bloomberg News reported, citing unnamed sources, adding that the complex could sell for more than $550 million. The firms reportedly bought the property in 2017 for $365 million.

* Separately, BentallGreenOak paid roughly $450 million to buy the 31-story office building at 685 Third Ave. in Manhattan, N.Y., from Unizo Holdings Co. Ltd., Commercial Observer reported, citing unnamed sources.

* Healthcare REIT Ventas Inc. is seeking a buyer for a portfolio of eight seniors housing properties spread across Arizona, Texas, California, Massachusetts, Tennessee and Kentucky worth a total of roughly $400 million, Real Estate Alert reported.

* A joint venture of Wharton Properties LLC's Jeff Sutton and Thor Equities LLC's Joe Sitt are selling the 11-story retail building at 530 Broadway in New York City to a partnership between Bilgili Holding, Deutsche Finance and BVK for $400 million, The Real Deal reported, citing unnamed sources.

* Home furnishing retailer Bed Bath & Beyond Inc. sold approximately 2.1 million square feet of commercial real estate space to an Oak Street Real Estate Capital LLC affiliate for net proceeds of more than $250 million. The retailer leased back the assets under long-term leases.

* Private equity and real estate investment firm KKR & Co. Inc. paid about $258 million to purchase the 688,100-square-foot Riata Corporate Park in Austin, Texas.

BMO's REIT downgrade

* BMO Capital Markets analysts downgraded several REITs while projecting an implied 9.6% total return for the industry benchmark MSCI US REIT (RMZ) index for 2020.

Analysts John Kim and R. Jeremy Metz downgraded Simon Property Group Inc., AvalonBay Communities Inc., Duke Realty Corp., Federal Realty Investment Trust and CareTrust REIT Inc. to "market perform" from "outperform."

Brixmor Property Group Inc., CubeSmart, Franklin Street Properties Corp. and Macerich Co. were lowered to "underperform" from "market perform."

Sino-US living link

* Chinese co-living platform Phoenix Tree Holdings Ltd., which aims to list on the NYSE, said its IPO will consist of 10.6 million American depositary shares with an indicative per-share price between $14.50 and $16.50.

Reis' 2019 fourth-quarter numbers

* Reis Inc. released its 2019 fourth-quarter reports, indicating the U.S. retail vacancy rate rose 0.1% to 10.2% amid the decline of overall occupancy due to the closure of 16 Kmart Corp. stores across 13 metropolitan areas.

U.S. office vacancies came in at 16.8% in the quarter, slightly up from 16.7% in the corresponding year-ago quarter, while the U.S. apartment vacancy rate rose by 10 basis points to 4.7%.

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