S&P Global Market Intelligence offers our top picks of real estate news and others published throughout the week.
Real estate investment trusts rebounded with the rest of the stock market this week, even as cases of coronavirus have soared and unemployment figures in the United States have increased.
The REIT earnings season doesn’t start seriously for a few weeks, but BTIG analysts Michael Gorman and Jim Sullivan have said that standard measurement sticks for performance would likely be less useful. For shopping malls and triple net lease names, in particular, attention is likely to turn to tenant lists.
“Wwith the [funds-from-operations-per-share] the impact of COVID-19 is still unclear, the REITs are in an unusual position that results and earnings estimates are unlikely to matter for the rest of 2020, “said the pair. . ” As a result, investors are forced to examine various measures to find investable names. “
Compass Point analyst Floris van Dijkum estimated that mall owners may only see 50% of rental payments in cash in April from retailers who had to close during the pandemic. The problems will persist for the group even after the worst of the pandemic, he said.
“Once the economy reopens, which should be the case this summer, we believe that the retail sector could still suffer,” said van Dijkum. “Retailers will struggle with unsold inventory for the spring season and consumers may be wary of going into public spaces.”
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In the multi-family arena, BMO Capital Markets analyst John Kim has declared a preference for Sunbelt markets for their affordability and for homeowners with lower prices, as a recession is now likely to be near. . Apartment REITs have a relative advantage overall since residential real estate is essential real estate, but the group is not immune. Kim now models a 75 basis point drop in occupancy and a 200 basis point drop in rents until the end of 2020.
“Apartment REITs are relatively well positioned as an asset class of necessity, with strong balance sheets,” said Kim. “However, with a record rate of job losses, the pricing power has evaporated.”
* Healthcare REIT Welltower Inc. has withdrawn its £ 2.5 billion supply for Barchester Healthcare, which has 200 care homes and 7 hospitals registered in the UK, likely due to the pandemic, Time reported.
* A special committee of the parent company of WeWork Cos. Inc. The board of directors of We Co. has filed a lawsuit against the Japanese funder SoftBank Group Corp. for ending its $ 3 billion takeover bid for the struggling coworking giant.
“Instead of fulfilling its contractual obligations, SoftBank, under increasing pressure from activist investors, has embarked on a targeted campaign to avoid the finalization of the tender offer, “said the committee.
In addition, WeWork was allegedly overwhelmed by requests from its tenants to terminate the payment of rent and / or leases as part of their measures to preserve cash flow during a pandemic, while The company itself would later have stopped paying rent at some of its locations in the United States as it attempted to renegotiate the leases with its owner partners.
* Industrial owner Prologis Inc. sold the eight Prologis Park Grande properties in Mexico City to FIBRA Prologis for $ 353 million. The Park totals 3,989,725 square feet and is 100% leased to tenants, including e-commerce giant Amazon.com Inc.
* Healthpeak Properties Inc. has completed its acquisition 426,000 square feet of life science and innovation assets in the Route 128 submarket in Boston for $ 320 million. The health care REIT also revealed that 22 of its communities had confirmed cases of COVID-19, with deaths reported in 11.
* Office owner SL Green Realty Corp. secured $ 220 million in refinancing from Wells Fargo for its 37-story office building at 10 E. 53rd St. in New York, The real deal reported, citing the deal’s brokers.
The COVID-19 effect
* REIT Realty Income Corp., a single tenant, withdrew its previously described 2020 profit forecast, citing economic uncertainty caused by the pandemic, while REIT Sun Communities Inc., a manufactured home, said its executives. Appointees, including President and CEO Gary Shiffman, agreed to forgo their base salary for the second quarter.
* According to data provider Preqin, private equity fundraising for real estate fell in the first quarter as the pandemic took over the globe. According to the report, 51 private real estate funds closed in the first quarter, raising $ 18 billion, compared to 83 funds that raised $ 51 billion in the same period of 2019.
* The coronavirus pandemic continued to affect the performance of American hotels For the week ended April 4, revenues per available room slipped 81.6% year over year to $ 16.50, according to STR data. The occupancy rate for the week decreased from 68.5% to 21.6%, while aaverage daily rate slipped 41.5% to $ 76.51.
* The shareholders of Carey Watermark Investors Inc. and Carey Watermark Investors 2 Inc. approved the proposed merger of the two non-negotiated real estate investment companies managed by the affiliates of W.P. Carey Inc. and Watermark Capital Partners LLC, the transaction to be completed as soon as possible.
Around the world
* The private equity and real estate giant The Blackstone Group Inc. has definitively closed Blackstone Real Estate Partners Europe VI, its sixth European opportunistic real estate fund, to 9.8 billion euros.
* The Luxembourg company ADO Properties SA finalized the acquisition of Germany Adler Real Estate AG to form Adler Real Estate Group.
* AccorHotels, based in France, has suspended its dividend to save around 280 million euros and laid off or reduced hours by three-quarters of its 310,000 workers worldwide to deal with the impact of the pandemic, London Financial times reported. A quarter of 280 million euros saved via the suspension of the dividend will be placed in a fund to help employees in difficulty.
* Emaar Properties PJSC has agreed to sell an 80% interest in the district cooling sector which manages its downtown Dubai project for 2.48 billion dirhams at National Central Cooling Co. PJSC. The developer also revealed pay cuts at all levels and entities of Emaar Dubai amid the pandemic, including a 100% pay cut for its president, reported Bloomberg News.
* Lone Star-Government-supported Chitocea Investment Co. Ltd. to acquire new owner of Japanese hotel operator UNIZO Holdings Co. Ltd. after agreeing to acquire the 29,618,824 Unizo shares deposited in its cash offer at ¥ 6,000 each. Unizo was previously targeted by several potential buyers, including Blackstone.
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