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REIT Replay: Taxing times

Real estate investment trusts and the broader markets ended in the red Thursday, Dec. 14, as Republicans in the U.S. House and Senate work on reconciling their tax reform bills.

The MSCI US REIT Index (RMZ) fell 0.10% to 1,167.12, while the Dow Jones Industrial Average slid 0.31%, closing at 24,508.66, and the S&P 500 closed 0.41% lower at 2,652.01.

Commercial real estate services firm Newmark Group Inc., which is being spun off from BGC Partners Inc., downsized its IPO to 20.0 million shares of class A common stock from 30.0 million shares and cut its per-share offering price target to between $14.00 and $15.00 from between $19.00 and $22.00.

Boston Properties Inc. said it will fully redeem its outstanding 3.700% senior notes due 2018, worth $850 million, on Dec. 17 at a price of roughly $865.5 million.

Shares of Boston Properties ticked up 0.27% to end the day at $126.71.

Vornado Realty Trust's operating partnership priced a $450 million debt offering, which is set to close Dec. 27. The company also called for the redemption of all $450 million of its 2.50% senior unsecured notes due 2019 and scheduled the redemption of the remaining $120 million of its 6.625% series I cumulative redeemable preferred shares.

Vornado Realty shares added 0.08% to close at $77.48.

Empire State Realty Trust Inc.'s operating partnership agreed to a private placement of $450 million of its senior unsecured notes, with net proceeds earmarked for the repayment of certain mortgage debt.

Empire State Realty shares fell 0.58%, closing at $20.48.

Piedmont Office Realty Trust Inc. declared a 50 cents-per-common-share special cash dividend as a result of taxable gains realized on the sale of about $396 million of assets during 2017.

Piedmont Office shares rose 0.10% to close at $20.08.

Separately, KBS Strategic Opportunity REIT Inc. announced a special dividend of $3.61 per share following the sale of an 11-property portfolio to Keppel-KBS US REIT.

Jefferies analyst Omotayo Okusanya downgraded Mid-America Apartment Communities Inc. to "hold" from "buy" and cut the per-share price target on the company's stock to $108 from $120. In a Thursday note, the analyst said the delay in the scheduled delivery of apartments from the 2017 second half to the 2018 first half is "increasingly" concerning and suggests that pressure on new rents will continue until the 2018 second half.

The analyst also noted that the supply issues seen in coastal markets are now increasingly showing up in the central-business-district submarkets of certain major Sunbelt cities where Mid-America's exposure has increased due to the company's Post Properties takeover.

Mid-America Apartment shares declined 0.12% to close at $102.45.

An affiliate of Digital Realty Trust Inc.'s operating partnership bought a roughly 250,000-square-foot data center in the Chicago metropolitan area from Carter Validus Mission Critical REIT Inc. for $315.0 million.

Digital Realty shares ticked down 0.03% to close at $115.27.

Sotherly Hotels Inc. struck a deal to acquire the Hyatt Centric Arlington hotel in Virginia from RP/HH Rosslyn Hotel Owner LP for approximately $81.0 million.

Sotherly Hotels shares closed 2.98% lower at $6.52.

On the macro front, STR data showed that U.S. hotels recorded positive performance for the week ended Dec. 9, with revenue per available room increasing 6.8%, average daily rate gaining 4.0% and occupancy rising 2.7% year over year.

Now featured on S&P Global Market Intelligence

Real estate heavyweights line up behind sustainability score: Prominent investors, many from Europe, are pushing real estate owners to submit data on their portfolios for sustainability scoring. More are complying in recent years, but industry participants say industry consensus is still lacking.

Real Estate Rundown: Medical office portfolios still trade, but prices have cooled: Recent transactions in the property type, including a portfolio sale by Investors Real Estate Trust, have tested an earlier $2.75 billion property deal's value as a precedent.

Harvard study: Fast-paced, decade-long growth of renters to moderate: The study found that after a decade of averaging 1 million new rental households per year, the pace of renter growth is expected to slow to an annual average of 500,000.

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