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REIT Replay: Markets, REITs close in the black

The broader markets continued to gain ground and real estate investment trusts rebounded Thursday, Feb. 15, as two Canadian companies struck a deal to create that country's largest REIT.

Retail-focused Choice Properties Real Estate Investment Trust agreed to acquire Canadian REIT, with a view to creating Canada's largest REIT with an enterprise value of approximately C$16 billion. Under the terms of the deal, which is expected to close in the second quarter, Choice Properties will acquire all of Canadian REIT's assets and assume all its liabilities, including long-term debt and residual liabilities.

Choice Properties shares fell 3.60% to C$12.04 and Canadian REIT shares ballooned 15.96% to end the day at C$50.49.

Equinix Inc.'s 2017 fourth-quarter funds from operations rose to $285.6 million from $219.9 million a year ago. The data center REIT also agreed to acquire the Infomart Dallas building in Texas, including its operations and tenants, from ASB Real Estate Investments, in an $800 million debt-and-cash deal.

Shares of Equinix slumped 6.54%, closing at $407.31.

A team of Evercore ISI analysts downgraded Tanger Factory Outlet Centers Inc. to "underperform" from "in-line" and cut the per-share target price on the company's stock to $23 from $26, saying the outlet center-focused REIT's projected net operating income growth for 2018 was "clearly disappointing." In handing the downgrade, the analysts argued that while Tanger "is a cheap stock, we have a hard time identifying any near-term catalysts."

Tanger Factory shares closed 0.60% higher at $21.94.

SmartCentres REIT tapped President and COO Peter Forde to serve as its new CEO, succeeding J. Huw Thomas, who will step down from that position in June. The shopping-center REIT also appointed its nonexecutive chairman and largest unit-holder, Mitchell Goldhar, as executive chairman.

SmartCentres shares gained 2.50%, closing at C$29.88.

Data center REIT CoreSite Realty Corp. acquired a two-acre land parcel in downtown Chicago, where it intends to develop an enterprise-class data center with a projected cost of up to $210 million at full build-out.

CoreSite Realty shares fell 0.77% to close at $97.14.

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Earnings call coverage

Kimco's Puerto Rico assets back in business, execs say: On an earnings call, executives described an increase in demand on the island, as retailer tenants have decamped the properties of less well-capitalized landlords.

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