S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.
Datacenters under construction across North America soared in the first half of the year, while the overall vacancy rate for primary markets fell to a record low, as cloud and artificial intelligence providers drive demand, CBRE said in a report.
Under-construction activity in primary markets hit a record high of 3,871.8 MW in the January-to-June period, up 69% year over year.
Datacenters under construction in Atlanta stood at 1,289.1 MW, up 76% from a year earlier, while activity in Austin, Texas, and San Antonio combined ballooned to 463.5 MW.
The vacancy rate in primary markets dropped in the first half to a record low of 2.8%, compared with 3.3% in the same period a year ago. Meanwhile, the vacancy rate in secondary markets declined to 9.7% from 12.7% in the first half of 2023.
"While cloud providers continued to lease most available power capacity, artificial intelligence providers also accounted for a considerable amount of demand," CBRE said.
CHART OF THE WEEK: 8 US REITs declare dividend increase in July
⮞ Eight US-based public real estate investment trusts announced increases to their regular dividend payments in July.
⮞ Medalist Diversified REIT Inc. declared a 25% increase to its quarterly cash payout to 5 cents per share July 5, while Welltower Inc. bumped up its quarterly cash payout by 9.8% to 67 cents per share July 29.
⮞ Through the first seven months of 2024, 53 US REITs have declared higher dividends.
Top property deals
– An affiliate of Hyatt Hotels Corp. sold its Hyatt Regency Orlando and adjacent 45 acres of land to affiliates of RIDA Development Corp. and an Ares Management Corp. real estate fund for approximately $1.07 billion. The 1,641-unit hotel in Florida comprises 315,000 square feet of event space.
– KKR & Co. Inc. acquired six industrial warehouses across the US for about $377 million. The class A properties in infill submarkets of Seattle, Atlanta, Philadelphia, the San Francisco Bay Area and the state of New Jersey are fully leased to a mix of tenants.
– EQT Exeter Real Estate Income Trust Inc. acquired two industrial properties for over $245 million. The company bought the 1.2 million-square-foot property at 3327 E Harrisburg Pike in Middletown, Pa., for over $170 million, and a 630,000-square-foot property at 1500 Shoals Way in Portland, Tenn., for $75 million.
– Blackstone Inc. is in talks to purchase Hyatt Regency Clearwater Beach Resort and Spa at 301 South Gulfview Boulevard in Clearwater, Fla., from Westmont Hospitality Group Inc. for about $200 million, Bloomberg News reported. The deal has not been finalized and the terms may still be subject to change.
US hotel performance
The average daily rate and revenue per available room (RevPAR) of US hotels were up about 1% during the week ended Aug. 17, STR reported, citing data from CoStar, which provides information and analytics on property markets.
Average daily rate rose to $156.35, 1.0% higher than the comparable week in 2023. RevPAR climbed 0.9% to $104.54. Occupancy fell by 0.2% to 66.9%.
Among the top 25 markets, Houston recorded the highest annual gains in all three metrics. San Francisco and Atlanta logged the steepest declines in RevPAR.
Explore key people moves in North American real estate.
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REIT Replay: US REITs underperform broader markets during week ended Aug. 16