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RioCan 'busy trying to get smaller'; American Tower, Toll Bros. log results

Commercial real estate

* Bloomberg News featured a report on RioCan Real Estate Investment Trust's aim to sell roughly C$2 billion worth of properties as well as the conversion of certain malls into apartments. RioCan CEO Edward Sonshine said in an interview that the REIT will market up to C$500 million of properties in the next two months amid its plan to off-load roughly 100 of its 289 properties.

Part of the proceeds will go toward building up to 10,000 residential units in major Canadian markets as Sonshine strives to take advantage of the migration to popular urban areas. He plans to have more than 90% of RioCan's rental revenue come from Canada's six major urban markets by 2020, up from the present roughly 75%, the news outlet noted.

RioCan has been Canada's largest REIT by market value, but the combined company resulting from the recently announced merger of Choice Properties Real Estate Investment Trust and Canadian REIT is slated to become the country's largest REIT. Sonshine, meanwhile, is "busy trying to get smaller."

* American Tower Corp. reported fourth-quarter consolidated AFFO of $707.4 million, or $1.64 per share, an 8.0% rise in the aggregate from $654.8 million, or $1.52 per share, in the comparable 2016 period.

* Park Hotels & Resorts Inc. closed the sale of 11 noncore assets for total gross proceeds of $317 million in three separate transactions. The company sold a portfolio of three Embassy Suites hotels in Atlanta; San Rafel, Calif.; and Overland Park, Kan., for $95.8 million.

It sold seven U.K. hotels for roughly $189 million and the Hilton Durban Hotel in Durban, South Africa, for roughly $32.5 million. The company noted that the sales greatly reduced its exposure to international markets.

* JPMorgan Chase & Co. is in negotiations to acquire roughly 700,000 square feet of air rights over Manhattan, N.Y.'s Grand Central Terminal in connection with its plan to knock down its headquarters at 270 Park Ave. and rebuild a larger one, Crain's New York Business reported, citing several sources familiar with the discussions.

MSD Capital and TF Cornerstone acquired a majority stake in the roughly 1.35 million square feet of development rights over Grand Central in 2016 and Argent Ventures owns a 10% minority stake. MSD Capital is the investment firm that manages Dell Technologies founder Michael Dell's assets.

A source said the air rights could be sold for roughly $300 per square foot, which is the minimum price set by the city in the Midtown East rezoning plan, according to the report. The air rights transfer would also require the bank and the partnership to contribute more than $40 million to public realm improvements in the neighborhood, the report noted, citing JPMorgan and the city.

* Extended Stay America Inc. and ESH Hospitality Inc. completed the sale of 25 Extended Stay America hotels to an affiliate of Three Wall Capital LLC. Extended Stay America will continue to manage the hotels with a 20-year contract. The properties, totaling more than 2,400 rooms, are in Ohio, Kentucky, Indiana and Texas.

Three Wall Capital also agreed to build 15 additional Extended Stay America hotels over a seven-year period.

* Rockwood Capital received a $260 million loan for Two Grand Central in Midtown Manhattan from MetLife, The Real Deal reported, citing Department of Finance records. MetLife assumed the existing $200 million loan on the 44-story property from JPMorgan Chase.

* Information-services firm Wolters Kluwer is close to leasing roughly 130,000 square feet at Fosun International's 28 Liberty St. in Manhattan, relocating from 111 Eight Ave., The Real Deal reported, citing unnamed sources.

* A partnership between KBS Realty Advisors LLC and Kane Realty Corp. divested the 12-story Midtown Plaza office development in the North Hills area of Raleigh, N.C., for $127 million.

The 329,613-square-foot class A property was sold at a price that surpassed the company's expectations, according to a release.

The Triangle Business Journal reported that the 12-story tower was completed in spring 2017, and Allscripts occupies nine of its floors. The identity of the buyer was not disclosed.

* Magellan Development Group landed a $90 million loan from TD Bank to pay off construction financing for its Midtown Five luxury apartment tower in Miami, The Real Deal reported, citing property records. The 26-story, 400-unit tower at 125 Northeast 32nd St. was delivered in January 2017 and is roughly 75% leased, the report noted, citing a spokesperson.

* Garrett Cos. has enlisted Newmark Knight Frank's ARA capital markets arm to sell the roughly 1,100-acre George Washington Village planned development near the Stafford Regional Airport in Northern Virginia, the Washington Business Journal reported.

The project is subject to a pending planned unit development application that covers half its acreage. The plans call for more than 1,850 residential units and a town center with roughly 760,000 square feet of commercial space. The overall area has mixed zonings including distribution, data centers, industrial, retail, office and residential, the report noted.

After the bell

* SBA Communications Corp. reported 2017 fourth-quarter funds from operations of $170.4 million, a rise in the aggregate from $162.7 million in the 2016 fourth quarter.

Housing

* Toll Brothers Inc. reported net income for the 2018 fiscal first quarter of $132.1 million, or 83 cents per share, an 87.6% rise and a 98% increase, respectively, in the aggregate from $70.4 million, or 42 cents per share, in the year-ago period.

The day ahead

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

In Asia, the Hang Seng was down 0.73% to 31,268.66. The Nikkei 225 rose 1.07% to 22,389.86.

In Europe, as of midday, the FTSE 100 dropped 0.15% to 7,278.76, and the Euronext 100 slid 0.23% to 1,030.59.

On the macro front

Retail inventories index, Wholesale inventories, Redbook, Richmond Fed Manufacturing Index, State Street Investor Confidence index and FHFA House Price index are due out today.

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