Editors’ Weekly News Roundup, August 28 – September 1
Two entity-level deals were announced this past week, and our report on the first of the two was the most-read Connect CRE story for the week ending Sept. 2. Shopping center REIT Kimco, among the oldest and most successful companies of its kind, will absorb a smaller competitor.
A breaking news story titled Kimco to Acquire RPT in $2B All-Stock Deal was our top story for the week. The deal for RPT Realty Trust will add 56 open-air shopping centers to Kimco’s existing portfolio of 528 properties and will give the REIT an enterprise value of approximately $22 billion. Later that same day, we reported that another REIT, Hersha Hospitality Trust, will be taken private by KSL Capital Partners.
For shareholders in RPT and Hersha, the back-to-back M&A transactions will represent a positive outcome. The news coming out of the office sector is often less happy for stakeholders, and a rating action taken by Fitch Ratings was unfortunately par for the course. Our second most-read story, Trump Financial District Building Downgraded, detailed the agency’s devaluation of the security linked to 40 Wall St.’s mortgage to junk status.
Like all too many office properties in Manhattan and elsewhere, 40 Wall St. is suffering declining occupancy and cash flow. However, its 17% vacancy rate is still below average for Lower Manhattan’s Financial District. Connect CRE readers in New York and nationally made this a top five story.
The month of September may or may not see another increase in the federal funds rate, but the monetary policy of the Federal Reserve is top of mind for the commercial real estate industry. Walker & Dunlop CEO Willy Walker made the Fed’s actions a focal point of his recent presentation at the company’s annual conference in Sun Valley, ID.
We reported on Walker’s talk in Walker Webcast: Willy Walker on Commercial Real Estate, Economic Trends and Politics, our third most-read story this past week. Along with focusing on the broader economy, Walker also covered multiple topics including artificial intelligence and its impact on business, the economics of climate change and the call for younger leadership in the U.S.
Two more stories about the office sector rounded out our top five for the past week. In fourth place was the introduction of a new program from an enterprising landlord. BGO Rolls Out Network of Prebuilt Offices Across U.S. Portfolio detailed the launch of MIRO (Move-in Ready Offices), intended to provide small- and medium-sized business tenants with immediate access to adaptable workspaces. BGO has introduced the concept in five key markets, with plans to roll it out more broadly.
Completing the top five was a California story that also drew interest nationwide. Office and studio REIT Hudson Pacific Properties found buyers for a pair of creative office assets, a transaction we reported in Hudson Pacific Divests Two Santa Monica Offices for $73M.
Despite last week serving as the run-up—or winding-down—to Labor Day weekend, it wasn’t lacking for big news in CRE. Hudson Pacific was among the players, along with Vornado Realty Trust and Blackstone, in a deal to deliver Manhattan’s first purpose-built studio campus. On the West Coast, Brookfield got the nod to redevelop the Concord Naval Weapons Station in the Bay Area.
Last but certainly not least, San Antonio’s burgeoning automotive industry scored another win with the announcement that an electric vehicle parts manufacturing plant will be built at Brooks Global Crossing. It’s part of the ongoing redevelopment of a former Air Force base as an industrial park.