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Equity Residential's $240M NYC sale; Kennedy Wilson sells Calif. hotel for $120M

Commercial real estate

* Equity Residential is under contract to sell the Archstone Chelsea apartment building at 800 Sixth Ave. in Manhattan, N.Y., to Greystar for $240 million, New York Post reported. The 266-unit property has 62 rent-stabilized units, a roof deck and a fitness center. Equity Residential was reported to be looking to sell the asset in September 2018 when it closed the $416 million sale of another apartment building in Manhattan.

* Kennedy-Wilson Holdings Inc. sold the Ritz-Carlton Lake Tahoe hotel in Truckee, Calif., for $120 million. The global real estate investment company paid $74 million for the asset along with a partner in a 2012 deal that included 170 hotel rooms, 23 condominium units and a 3.4-acre development parcel. The condos were sold out in 2016 for roughly $50 million.

* A mall at Manhattan's Hudson Yards development will offer a 77,000-square-foot floor dedicated to providing physical spaces for online retailers, a strategy that is seeing increased adoption from mall landlords, The Wall Street Journal reported. The retailers might not be able to replicate their online success in the physical world, which could leave the mall with more failed stores than expected, the publication noted.

The mall is slated to open in March. Hudson Yards, an 18 million-square-foot commercial and residential project, is being developed by Related Cos. and Oxford Properties Group Inc.

* SkyBridge Capital is parting ways with EJF Capital on a planned $3 billion opportunity zone fund and is seeking a new partner, The Real Deal reported, citing sources familiar with the two companies. The reason for the split was not immediately clear, the news outlet added, citing the sources. The SkyBridge-EJF Opportunity Zone REIT was established in December 2018.

* The ongoing U.S. government shutdown is causing headaches for real estate investors and developers who are amassing funds to avail opportunity zone tax benefits, the Journal reported. The Treasury Department still needs to finalize guidance on how the tax breaks would work and the Internal Revenue Service recently cancelled a public hearing on the issue.

Many investors and developers have been raising funds and acquiring sites in opportunity zones in recent months.

* Two storefronts on the famed Rodeo Drive shopping corridor in Beverly Hills, Calif., landed $160 million in financing from a group managed by an affiliate of Apollo Global Management, The Real Deal reported, citing brokerage HFF, which arranged the deal. ECA Capital Ltd., which owns the 338 N. Rodeo Drive property, paid $81.5 million for the asset in 2007. The storefronts, which total 28,114 square feet, are occupied by Tom Ford, Bally and Balenciaga.

* Benzinga featured a report on the Chicagoland Outlets project that was planned in 2007 but has been continuously delayed since the financial crisis in hopes for a recovery of outlet malls and is now being developed as industrial space. After holding out for more than a decade, Capri Capital Partners LLC sold the 102-acre site to Logistics Property Co. in late 2018.

Logistics Property is expected to break ground on the 1.4 million-square-foot project in the spring. The development will feature four distribution centers and is expected to cost between $75 million and $100 million.

* Citing brokerage Avison Young Canada Inc., Bloomberg News reported that Canada's commercial property sector is poised to maintain its boom in 2019 aided by tight supply and the lowest unemployment rate in at least 40 years. Commercial property investments in Canada for 2018 are expected to surpass the 2017 record of C$36 billion.

Office space under construction almost doubled in 2018 to over 22 million square feet, while office vacancies fell to an average of 11%. Industrial vacancies fell to a record low of 2.9% at the end of 2018 and a further drop is expected. Industrial property construction jumped to over 20 million square feet from roughly 14 million square feet in 2017, the news outlet added.

The day ahead

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

In Asia, the Hang Seng increased 0.27% to 26,902.10, while the Nikkei 225 decreased 0.55% to 20,442.75.

In Europe, around midday, the FTSE 100 decreased 0.51% to 6,859.68 and the Euronext 100 was up 0.03% to 934.88.

On the macro front

The MBA Mortgage applications report, housing market index report, EIA petroleum status report and Beige book report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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