Realty Income, VEREIT to merge; Public Storage closes $1.8B ezStorage deal

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

Expressions of interest from potential seniors housing and skilled nursing residents have increased in 2021, but only one in five industry executives who responded to a recent survey said such "leads" were above pre-pandemic levels.

In the survey, conducted in the first half of April, the National Investment Center for Seniors Housing & Care polled executives at companies that operate hundreds of properties nationwide, and reported that 84% had seen increased lead volume. Most respondents reported no change in the pace of move-outs, while two-thirds of assisted-living and memory-care executives said move-ins had increased in the past 30 days.

The recovery appeared to move slower in the nursing care and independent-living segments, in which 60% and 49% of respondents, respectively, reported increased move-ins. Seniors housing occupancy hit a record low of 78.8% in the first quarter, according to NIC data, and 61% of respondents in the survey with multiple properties in their portfolios reported offering rent concessions in more than half of their properties.

In vaccine news, an average of 91% of residents at respondents' properties were reported to be fully vaccinated against COVID-19. Meanwhile, 64% of facility staff members were reported to be vaccinated, in a one-percentage-point increase from the prior two-week period.

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M&A play

* Realty Income Corp. agreed to acquire fellow single-tenant landlord VEREIT Inc. in a deal that will result in the formation of a company with an enterprise value of about $50 billion. Upon the completion of the all-stock transaction, expected in the fourth quarter, the companies will spin off substantially all of their office properties into a new, self-managed, publicly traded real estate investment trust.

* The respective shareholders of Extended Stay America Inc. and its paired-share REIT ESH Hospitality Inc. are set to vote on the companies' roughly $6 billion planned all-cash sale at special meetings scheduled for June 8. The acquisition offer being considered was made by a 50/50 joint venture between funds managed by Blackstone Group Inc.'s Blackstone Real Estate Partners and Starwood Capital Group at $19.50 per paired share, but the transaction has faced investor opposition largely over valuation concerns and deal timing.

* Self-storage REIT Public Storage completed its $1.8 billion acquisition of ezStorage Corp.

* Real estate technology company Compass Inc. agreed to acquire Glide Labs Inc., a real estate transaction management software company. The deal is expected to close soon, subject to customary closing conditions.

Property pieces

* Office REIT Vornado Realty Trust is looking to obtain $1.2 billion in debt refinancing for the tower it co-owns with The Trump Organization LLC at 555 California St. in San Francisco, Bloomberg News reported, citing a marketing document.

* Tokyo-based Mori Trust Co. Ltd. plans to sell a roughly 604,000-square-foot office complex in San Jose, Calif., for $500 million, Real Estate Alert reported. The property at 110-130 Holger Way is fully leased to Micron Technology Inc.

* Sunstone Hotel Investors Inc. paid $265 million to purchase fee simple interest in the new 130-room Montage Healdsburg luxury resort in Sonoma County, Calif., from affiliates of Ohana Real Estate Investors LLC in an off-market deal.

* ASB Real Estate Investments sold a five-story office building in Washington, D.C., on behalf of Allegiance Real Estate Fund to Boyd Watterson Asset Management LLC for about $201.8 million. The property at 64 New York Ave. NE spans 355,034 square feet.

Funding talks

* Brookfield Asset Management Inc. is looking to raise $18 billion for Brookfield Strategic Real Estate Partners IV, marking the firm's largest global opportunistic real estate fund to date, IPE Real Assets reported, citing unnamed sources.

* Healthcare REIT Welltower Inc. partnered with an investment group led by Safanad Ltd. to recapitalize the U.K.-based seniors housing operating platform HC-One Ltd. The REIT provided a £540 million senior secured loan backed by HC-One's real estate and other assets, as well as a £55 million equity investment.

Earnings call coverage

As the first-quarter earnings season started, S&P Global Market Intelligence reporters tuned in to conference calls hosted by some of the larger players in the real estate sector.

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