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REIT Replay: Hump day slump


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Breaking into Europe’s Digital Infrastructure Markets: Drivers & Trends

REIT Replay: Hump day slump

REITs and the broader markets trended down Wednesday, Dec. 21, as two separate mergers got the go-ahead from shareholders.

The MSCI US REIT Index (RMZ) dropped 1.50% to 1,128.01, and the SNL US REIT Equity Index fell 1.32% to 301.81. The Dow Jones Industrial Average ticked down 0.16% to 19,941.96, while the S&P 500 lost 0.25% to end the day at 2,265.18.

The respective shareholders of Colony Capital Inc., NorthStar Asset Management and NorthStar Realty Finance Corp. voted, at the companies' respective special meetings, to approve the companies' tri-party merger, which is set to be completed in January 2017, according to a Tuesday joint statement.

NorthStar Realty shares rose 0.98% to end the day at $15.39.

Global Net Lease and ARC Global Trust II Inc. said in a Tuesday joint statement that their respective shareholders gave the go-ahead to the companies' combination in separate Dec. 20 meetings. The deal is expected to be completed Dec. 22.

Global Net Lease shares dropped 3.63% to close at $7.70.

New York REIT said Wednesday that it secured $760 million of financing provided by Credit Suisse.

The company will use the funds to repay an outstanding credit facility balance of $485 million; to help pay for its acquisition of most or all of the remaining equity interest in Worldwide Plaza in Manhattan, N.Y.; and to facilitate its planned dissolution and liquidation

New York REIT shares ticked up 0.71% to close at $9.97.

Sunstone Hotel Investors Inc. said Tuesday that it is offering $120 million of 4.69% senior unsecured notes with a nine-year term and $120 million of 4.79% senior unsecured notes with an 11-year term in a private placement, which is expected to close Jan. 10, 2017.

Sunstone Hotel shares dipped 1.20% to close at $15.64.

NorthWest Healthcare Properties REIT said in a Wednesday release that the underwriters in its bought-deal debenture offering fully exercised their overallotment option to acquire up to an additional C$10.5 million of 5.25% convertible unsecured subordinated debentures, bringing the total gross proceeds to C$80.5 million.

Shares of NorthWest Healthcare inched up 0.20% to close at C$10.19.

Pebblebrook Hotel Trust said Tuesday that it completed the sale of the 618-room Manhattan NYC hotel in Manhattan, N.Y., for $217.5 million, with the sale proceeds earmarked for the repayment of a $140.0 million loan secured by the property and for general corporate purposes.

Shares of Pebblebrook Hotel fell 1.76%, closing at $30.13.

City Office REIT Inc. said Tuesday that it bought the 266,531-square-foot SanTan Corporate Center from Columbia Property Trust Inc. for $58.5 million and the 175,835-square-foot 5090 N. 40th St. for $42.6 million. Both class A office buildings are in Phoenix.

City Office REIT shares dropped 1.55% to $12.71 and Columbia Property Trust shares decreased 1.82% to close at $21.04.

FBR Capital Markets & Co. analysts Bryan Maher and Wendy Ma initiated coverage of Senior Housing Properties Trust with an "outperform" rating and a per-share price target on the company's stock of $24. The analysts said in a Wednesday note that they think the market "is not appropriately valuing this high-quality, investment-grade-rated (both Moody's and S&P) healthcare REIT."

Senior Housing Properties shares lost 2.15%, closing at $17.79.

A team of Deutsche Bank Markets Research analysts, in a Tuesday note, assigned Hilton Worldwide Holdings Inc. a "buy" rating and a $65 price target following the company's board's recent approval of a 1-for-3 reverse stock split of Hilton shares, as well as the spin-offs of Park Hotels & Resorts Inc. and Hilton Grand Vacations.

"We believe the simplicity and the longevity of the new business model, coupled with the capital return agenda, leading in-place unit growth story, and low beta fee streams, provide a solid backdrop for investors, who we believe are getting a free option on a RevPAR re-acceleration and cycle elongation," the analysts said.

Shares of Hilton ticked down 0.04%, closing at $27.73.

On the macro front, the latest statistics from the National Association of Realtors showed that existing home sales were up for the third consecutive month in November, at the highest sales pace since February 2007. In November, total existing home sales ticked up 0.7%, seasonally adjusted, to 5.61 million from 5.57 million in October, and were 15.4% higher than a year ago.

Mortgage applications increased 2.5% on a seasonally adjusted basis for the week ended Dec. 16, according to the Mortgage Bankers Association's Market Composite Index. On an unadjusted basis, mortgage applications rose 2% week over week.

Now featured on S&P Global Market Intelligence

The Property Ledger: Wheeler REIT pays $9M for NC asset; Trans World picks up German hotel: The Dec. 21 edition of the North American property ledger also includes Regency Centers' acquisition of a Florida shopping center.

Market prices and index values are current as of the time of publication and are subject to change.