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RE fundraising soared in 2019; Blackstone and MGM in $4.6B Las Vegas deal

S&P Global Market Intelligence offers our top picks of U.S. real estate news stories and more published throughout the week.

Record raised

* Real estate fundraising in 2019 hit the highest level since 2008 to $151 billion, propelled mainly by big fund closures, according to the latest data from Preqin. The three largest funds collectively raised $43.5 billion, including the Blackstone Real Estate Partners IX LP fund of private equity giant The Blackstone Group Inc., which secured $20.5 billion in capital commitments to become the largest real estate fund to date.

The successful year has boosted the fundraising activity in 2020 as the number of funds at the start of year was up 36% at 918, which collectively aim to raise $281 billion in the year.

About properties

* MGM Growth Properties LLC will form a joint venture with Blackstone Real Estate Income Trust Inc. to purchase the real estate assets of the MGM Grand-Las Vegas and Mandalay Bay casinos in Las Vegas for $4.6 billion. MGM Growth will sell the Mandalay Bay assets to the joint venture in which it will own a 50.1% stake. The venture will acquire the real estate assets of MGM Grand from MGM Resorts International in a $2.5 billion deal, with net cash proceeds of about $2.4 billion and about $85 million in MGM Growth operating partnership units.

* Affiliates of Harbor Group International LLC purchased a portfolio of 36 apartment properties totaling 13,243 units for $1.85 billion. The seller, Aragon Holdings LLC, sold the properties as part of a planned $2 billion sale of its entire apartment portfolio totaling 15,000 units in 12 cities and eight U.S. states.

* ElmTree Funds LLC, a real estate private equity manager, sold a major portion of an approximately $900 million, 18-property portfolio of build-to-suit net lease assets across the U.S. to Guggenheim Investments. The portfolio is mainly made up of industrial and office assets.

* An office complex in Bellevue, Wash., and an apartment property in Falls Creek, Va., were acquired by Australian superannuation fund Qsuper for A$1 billion, IPE Real Assets reported.

* Digital Realty Trust Inc. completed the sale of 10 powered shell data centers in North America for US$557.3 million to a joint venture of Singapore-based Mapletree Industrial Trust and Mapletree Investments Pte. Ltd. The deal marks the completion of the US$1.37 billion transaction between the parties that was first announced in September 2019.

* A unit of Marriott International Inc. sold the Sheraton Phoenix Downtown hotel to a Blackstone Group affiliate for $268 million.

* Eldorado Resorts Inc. agreed to sell its Eldorado Resort and Casino in Shreveport, La., for $230 million in cash to Maverick Gaming LLC, subject to a working capital adjustment.

* Alexandria Real Estate Equities Inc. bought the 510,000-square-foot Riverside Center office complex in Newton, Mass., from a subsidiary of Hines for $235 million, the Boston Business Journal reported, citing a Middlesex County deed.

* VEREIT Inc. and an institutional client of Arch Street Capital Advisors LLC finalized an 80/20 joint venture that will hold three office assets worth about $137.5 million, totaling 582,000 square feet across three U.S. states.

* Oxford Properties Group Inc. sold the 27-story, 560,000-square-foot 1100 Rene-Levesque West class A office building in Montreal to a joint venture of Canadian real estate companies Groupe Petra and Groupe Mach Inc. for C$225 million.

* The board of First REIT of New Jersey approved a plan of voluntary liquidation for the company and agreed to sell a seven-property apartment portfolio for $266.5 million to an affiliate of Kushner Cos. LLC. The diversified real estate investment trust plans to convene a shareholder meeting to approve the portfolio sale and the plan of voluntary liquidation.

* Healthcare landlord Welltower Inc. said it will enter an agreement with Thomas Jefferson University and Jefferson Health Systems for a joint venture under which it will purchase a stake in certain Jefferson Health real estate assets. The arrangement is meant for Jefferson Health to decrease some of its fixed-asset investments and use the proceeds for other clinical and academic strategic areas.

* Brookfield Property Partners LP is investing $5 million in Allied Esports Entertainment Inc. to acquire a stake in the electronic sports entertainment company. The deal will allow Allied Esports to feature its new on-mall electronic sports venue concept at existing retail locations of Brookfield Asset Management Inc.'s global real estate arm.

Merger matters

* Shareholders of Carey Watermark Investors Inc. and Carey Watermark Investors 2 Inc. will vote on the merger of the nontraded lodging REITs in separate special meetings March 26. The two companies are managed by W. P. Carey Inc. unit Carey Lodging Advisors LLC.

* Timber-focused landlord Rayonier Inc. agreed to buy Pope Resources A Delaware LP in a deal valuing the latter's limited partnership equity at $554 million, or $126.91 per unit. The deal is expected to close in mid-2020 and was unanimously approved by the respective boards of both companies.

Confidential IPO

* Broadstone Net Lease Inc. confidentially submitted a draft registration statement with the SEC regarding a planned IPO of an undisclosed number of its common shares. The real estate company was recently reported to be seeking about $600 million in an IPO in early 2020.

Employee-light policy

* CyrusOne Inc. will cut its workforce by about 12% and lay off 55 employees, with immediate effect, the data center REIT said Jan. 13.

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