REITs were mixed, and the broader markets traded lower Tuesday,May 3, as a slide in Chinese manufacturing and weaker-than-anticipated growth projectionsfor Europe shook investor confidence.
The MSCI US REIT Index (RMZ) inched 0.08% higher, to 1,149.44,and the SNL US REIT Equity Index shed 0.10% to close at 306.37. The Dow Jones IndustrialAverage fell 0.78% to close at 17,750.91, while the S&P 500 gave up 0.87% toend the day at 2,063.37.
New York REIT,which announced in October 2015 that it hiredEastdil Secured to help it evaluate strategic alternatives, was rumored Monday tobe in merger talks withThe JBG Cos.
The purported talks come more than three months after an representativedispelled earlier reportsthat the company was closing inon a deal to acquire New York REIT.
New York REIT shares gained 1.36% to close at $10.42.
Timber REIT RayonierInc. closed on two separate transactions meant to improve its timberlandportfolio in the Pacific Northwest
Specifically, the company picked up 61,000 acres of timberlands in Oregon and Washingtonfor about $263 million as part of its joint acquisition of private timber REIT MenashaForest Products Corp. with Forest Investment Associates.
In addition, Rayonier divested about 55,000 acres in Washingtonto Forest Investment Associates for about $130 million, evening out the age-classdistribution of its Pacific Northwest portfolio.
To help fund its portion of the Menasha acquisition net of the$133 million received from the Washington sale, Rayonier signed a 10-year, $300million incremental term loan.
Rayonier shares gave up 1.44% to close at $24.72.
Vornado Realty Trust'sspinoff of its Washington,D.C., operations is looking more likelyas the company continues its explorationof the potential separation.
On an earningscall, Chairman and CEO Steven Roth said: "We continue to explore separatingthe Washington business, and we have begun a process to dispose of the properties," whichpertain to a collection of offices in Northern Virginia.
Vornado reportedFFO attributable to common shareholders plus assumed conversions of $203.1 million,or $1.07 per share, for the first quarter, compared to $220.1 million, or $1.16per share, in the year-ago quarter.
Vornado shares fell 2.83% to close at $94.67.
Aiming to take advantage of the more favorable private-marketpricing for assets today, General GrowthProperties Inc. CEO Sandeep Mathrani revealed during an earnings callthat the company is pursuingthe sale of joint venture stakes in some of its mall assets.
The company aims to use proceeds from such transactions in largepart to pay down debt.
Also, General Growth completed the divestment of four assetsin the first quarter, bought out the remaining stake in a Spokane, Wash., mall andinked a deal to sell a San Francisco asset for more than $100 million and the officecomponent of a New York property for $150 million.
Postinga 24.2% per-share gain in FFO during the first quarter, the company reaffirmed itsfull year FFO-per-share outlook and issued projections for the second quarter.
General Growth shares put on 1.26% to close at $28.99.
In other earnings news, ExtraSpace Storage Inc. boostedits full-year 2016 guidance range while reporting year-over-year FFO growth in thefirst quarter. Welltower Inc.posted a year-over-yearincrease in normalized FFO during the first quarter and affirmed its earnings guidancefor the 2016 full year.
Meanwhile, StarwoodHotels & Resorts Worldwide Inc. reported a decline in first-quarter net income attributableto the company, which came to $90 million, or 53 cents per share, compared to $99million, or 58 cents per share, in the year-ago period.
Extra Space shares gained 2.31% to close at $88.88, while Welltowershares popped 2.23% to close at $71.85, and Starwood shares ticked 0.21% higher,to $82.29.
In reporting its first-quarter earnings Monday, said the joint venturebetween its Taubman Asia unit and Wangfujing Group Co. acquired the remaining 40% stake that they did not alreadyown in the CityOn.Xi'anshopping center in Xi'an, China, for roughly $150 million. Taubman's share of thepurchase price was $75 million.
Taubman said that with the acquisition, Taubman Asia and Wangfujingnow own a 50% stake each in the property.
Taubman shares rose 1.20% to close at $71.78.
In dividend news, AgreeRealty Corp. raisedits quarterly cash dividend by 3.2% to 48 cents per common share.
The company said after market closed Monday that it would paythe dividend July 15 to shareholders of record at the close of business June 30.
Agree Realty shares added 1.57% to close at $40.10.
On the macro front, U.S. home prices, including distressed sales,rose 6.7% year over yearand 2.1% month over month in March based on CoreLogic's latest home price index.
Year-over-year growth was seen in all 50 states, with Washingtongaining the most, at 13%.
Earnings call coverage
General Growthpursuing JVs on several assets: The company plans to primarily use proceedsfrom any stake sales to pay down debt.
Vornado's prospectiveDC spinoff looking more likely: Exchanges with management during theQ&A segment of the company's May 3 earnings call suggested a spinoff of Vornado'sWashington, D.C., business could come sooner rather than later.
Welltower's NYCproperty will target an 'affluent, cognitively challenged population,' CEO says:The property, to be developed with Hines, is part of the REIT's strategy of focusingon top-tier markets, company executives said in an earnings conference call.
Data Dispatch:Cousins, Parkway saved from 'Houston purgatory,' analyst says: Cousinshad to pay up for Parkway, but the merger and accompanying HoustonCo spinoff willlikely pay off in the end for having saved the companies from the drags their Houstonholdings would have had on their portfolios, analysts said.
The Guidance Report:This roundup of recent guidance from real estate companies includes updates fromGeneral Growth Properties, Extra Space Storage and Taubman Centers.
The Short Report:US REIT sector posts slight decline in short interest in April 1st half:REITs in the diversified, health care, multifamily, regional mall, specialty andsingle-tenant sectors posted declines in average short interest, with single-tenantREITs logging the greatest average drop.
The Short Report:US gaming short interest inches up in April 1st half: Wynn Resorts experiencedthe biggest increase in short interest and was the most shorted gaming stock duringthe first half of April.
The Short Report:Short interest in US homebuilders drops further in first half of April:Beazer Homes logged the biggest increase in short interest, while William Lyon Homessaw the largest decline in short interest during the first half of April.
Market prices and indexvalues are current as of the time of publication and are subject to change.