S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.
Lease transactions involving industrial big-box warehouses in North America went down in 2022 after the pandemic leasing rush cooled and as tenants faced macroeconomic headwinds.
Some 374.6 million square feet of such facilities, which are at least 200,000 square feet, were leased in 2022. The figure was down 20% from the leasing volume in 2021 but 5.5% higher than in 2020, according to CBRE's 2023 North America Industrial Big Box report.
Leasing activity is expected to fall further in 2023, and together with high development completions, vacancies are likely to increase. Vacancies were at 3.3% as of the end of 2022, according to the report.
Construction completions in 2022 totaled 272.7 million square feet, while overall net absorption was 261.3 million square feet.
First-year base rents grew 23% to $6.98 per square foot in 2022 from $5.67 per square foot in 2021. CBRE forecasts a sustained double-digit rent growth in 2023.
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M&A and JV
- Extra Space Storage Inc. agreed to buy fellow self-storage real estate investment trust Life Storage Inc. in an all-stock deal. The combined company is expected to have an enterprise value of about $47 billion.
- Safehold Inc. closed its acquisition of iStar Inc. The acquired company also completed the spinoff of its legacy assets to its stockholders through the distribution of all Star Holdings common shares.
- FirstService Corp. unit Firstservice Residential Inc. acquired Crossbridge Condominium Services Ltd., a Toronto-based residential property manager.
- Safehold and an undisclosed sovereign wealth fund entered into a roughly $500 million joint venture arrangement. The REIT committed about $275 million for a 55% interest in the joint venture, while the fund committed roughly $225 million for the remaining 45% stake.
Property transactions
- W. P. Carey Inc. acquired four pharmaceutical research and development as well as manufacturing campuses in Greater Toronto for approximately US$468 million. Apotex Pharmaceutical Holdings Inc. sold and leased back the portfolio spanning 2.3 million square feet across 11 properties.
- Southern California-focused Rexford Industrial Realty Inc. disclosed $357.2 million of industrial property acquisitions and a $17 million property sale in February and March. The acquisitions comprised the building at 3520 Challenger St. in Torrance, Calif.; the site at 9000 Airport Blvd. in Los Angeles; and a deal in San Diego involving the properties at 9223 and 9323 Balboa Ave. and 4285 Ponderosa Ave. The company sold the property at 8101-8117 Orion Ave. in Los Angeles' Van Nuys neighborhood.
- Terreno Realty Corp. bought an industrial asset in Newark, Calif., for roughly $186 million. The property comprises four distribution buildings totaling 603,000 square feet.
- Waterbridge Capital LLC acquired the Union Bank Plaza property in downtown Los Angeles from KBS Real Estate Investment Trust II Inc. for $104 million. The 675,945-square-foot property comprises a 40-story office tower and a two-level retail center.
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