Kimco, Weingarten to merge; Public Storage to buy ezStorage for $1.8B

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

Private real estate deal activity and fundraising across the globe got off to a slow start in 2021, as the asset class continues to experience the effects of the coronavirus pandemic, according to data provider Preqin.

The first quarter of 2021 continued in "much the same vein as 2020" across the real estate asset class, with property-focused funds raising about $25 billion through 52 closed funds, representing a 25% slide in total capital raised and a more than 50% decline in the number of funds hitting final close compared to the first quarter of 2020, Preqin said.

The first quarter of 2021 also saw 1,480 deals completed with a total value of $44 billion, down 24% and 44%, respectively, year over year.

The data provider noted that there is significant uncertainty facing the main real estate segments, such as retail and office, with those two property types leading the fall in first-quarter private equity real estate transactions.

On the brighter side, industrial and logistics asset deal volume increased 14% year over year in the quarter, with Preqin projecting that "fund managers are well-positioned with ample firepower to capitalize on opportunities in an eventual recovery."

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Combining forces

* Weingarten Realty Investors agreed to merge with and into fellow shopping center real estate investment trust Kimco Realty Corp. to form a company with an expected pro forma equity market cap of roughly $12.0 billion and a pro forma total enterprise value of $20.5 billion. The deal is expected to close in the second half of 2021.

* Self-storage REIT Public Storage will acquire self-storage company ezStorage Corp. for $1.8 billion using unsecured debt. The transaction will expand Public Storage's portfolio in Washington, D.C.; Virginia; and Maryland by about 60%. It is expected to close in May.

* CoStar Group Inc. agreed to acquire residential property listing and marketing portal Homes.com Inc. for $156 million. Homes.com is a division of Dominion Enterprises Inc. The deal is expected to close in the first half of 2021.

* Brookfield Asset Management Inc. is nearing a deal to assume control of financially struggling hotel REIT Hospitality Investors Trust Inc., Bloomberg Markets reported, citing people with knowledge of the matter.

* Communications REITs Crown Castle International Corp. and SBA Communications Corp. signed deals with Verizon Communications Inc. to accelerate the deployment of equipment for the launch of its 5G Ultra Wideband and fixed wireless broadband service on the C-band spectrum. The deals established the terms for leasing space on existing towers and would minimize legal reviews and allow for other improvements in the process.

Property ledger

* Swiss private equity firm Partners Group Holding AG, acting on behalf of its clients, sold an 88-property industrial portfolio in the U.S. at a gross asset value of more than $1 billion. The portfolio, said to be purchased by AIG Global Real Estate, totals 8.6 million square feet and is spread mainly across the mid-Atlantic and Southeast regions of the U.S.

* Hines agreed to pay about $227 million to acquire the 396,000-square-foot office building at 1015 Half St. SE in Washington, D.C., Real Estate Alert reported. The 10-story, 96%-leased building is being sold by PGIM Real Estate.

* The California State Teachers' Retirement System will acquire a portfolio of five industrial properties in Southern California from Crow Family Holdings for $320 million, with closing expected by May.

Sky is the limit

* Private equity giant KKR & Co. Inc. aims to raise more than $100 billion in 2021-22, after its record $44 billion global fundraising in 2020, with $10 billion to $15 billion expected to be collected in real estate alone.

Ruled!

* Office landlord Vornado Realty Trust won a lawsuit against coworking firm Regus PLC over the tenant's attempt to terminate a 15-year lease at the REIT's property at 345 Montgomery St. in San Francisco, the Commercial Observer reported. A Superior Court judge in San Francisco County ruled that the lease should be reinstated with "full force and effect," the report added, noting that the lease is worth $90 million over 15 years.

Reassurance

* Despite growing shareholder oppositions, the respective boards and management of Extended Stay America Inc. and its paired-share REIT ESH Hospitality Inc. reiterated their support for the company's planned $6 billion all-cash sale to a joint venture between fund managed by Blackstone Group Inc. unit Blackstone Real Estate Partners and Starwood Capital Group. The companies maintained that the deal will bring "immediate, certain and compelling value to shareholders," among other benefits.

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