S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.
Datacenter real estate investment trust Digital Realty Trust Inc. said the exponential growth in datacenter demand is likely to pose sustainability challenges.
Datacenters consumed roughly 2% of global electricity in 2022, and this figure could double by 2026 without significant efficiency improvements, Digital Realty President and CEO Andrew Power said on the company's second-quarter earnings call.
"AI is driving the incremental wave of demand for robust computing infrastructure," Power said.
In the US, datacenters that support the AI boom account for 4% of overall energy demand and that could rise to 9.1% by the end of the decade, according to an analysis by property insights company CoreLogic Inc., citing Electric Power Research Institute data.
CHART OF THE WEEK: Canadian REIT capital offerings up over 50%
⮞ Publicly traded Canadian REITs raised C$1.10 billion through capital offerings in the second quarter.
⮞ The figure was more than 50% higher than capital offerings in the 2023 comparable period.
⮞ Retail-focused Choice Properties Real Estate Investment Trust garnered the most capital from April to June.
Sales and acquisitions
– Blackstone Inc. is in talks to buy Retail Opportunity Investments Corp., a retail REIT valued at nearly $2 billion, Reuters reported, citing people familiar with the matter.
– Site Centers Corp. recently offloaded 15 shopping centers and a parcel of land at a shopping center for a total of $868.2 million, the retail REIT said in its second-quarter earnings report. Site Centers also acquired six convenience shopping centers and a parcel for $56 million.
– AvalonBay Communities Inc. sold two apartment communities — AVA Theater District in Boston and Avalon Darien in Darien, Conn. — for $332 million. The communities comprise 587 apartment homes. The company also acquired Avalon Perimeter Park in Morrisville, NC, for $66.5 million and Avalon Cherry Hills in Englewood, Colo., for $95 million.
– KKR & Co. Inc. and Dalan Management intend to acquire a rental tower in Brooklyn, NY, from Jenel Real Estate for about $240 million, The Real Deal reported. The 43-story Paxton property at 540 Fulton St. has 327 multifamily units.
– Equity Residential acquired two properties comprising 644 apartment units in Atlanta and Dallas-Fort Worth for $216.8 million, the company said in its second-quarter earnings report. Equity Residential is also under contract to buy a 202-unit apartment property in Denver for $77 million.
US hotel performance
US hotel performance was up year over year across two key metrics during the week ended July 27, STR reported, citing data from CoStar, which provides information and analytics on property markets.
Revenue per available room (RevPAR) was $118.37, up 0.9% from the comparable week in 2023. Average daily rate (ADR) increased 1.3% to $164.45. However, occupancy fell by 0.4% to 72%.
Among the top 25 markets, New Orleans reported the biggest year-over-year gain in occupancy, while San Diego logged the highest increase in ADR. Nashville, Tenn., reported the steepest drop in RevPAR.
Click here to see key people moves in North American real estate.
REIT Replay: REIT share prices up slightly during week ended July 26
Several major US bank lenders on retail commercial real estate held line in Q2