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

Commuting emerged as the biggest factor keeping employees from returning to offices, according to a report from The Wall Street Journal.

The return-to-office rate has been slow in cities with longer commutes compared to urban areas where people live closer to their workplace, the publication said, citing its analysis of U.S. Census Bureau data and building-access company Kastle Systems. This implies cities and landlords may need to invest in housing, public transportation and other infrastructure that could reduce commute times in order to lure back office employees, the Journal said.

Overall, office leasing demand is expected to decline as leases from technology companies, which accounted for over a fifth of total office leasing in recent quarters, could see a "significant slowdown" in the face of high inflation and increasing possibility of a recession, BMO Capital Markets analyst John Kim said in a May 31 note. BMO downgraded Essex Property Trust Inc., JBG Smith Properties, Kilroy Realty Corp. and Vornado Realty Trust to Market Perform ratings, given their exposure to the tech industry.

CHART OF THE WEEK: Average short interest in US REITs up 6 bps in 1st half of May

⮞ Average short interest in U.S. equity real estate investment trusts increased by 6 basis points in the two weeks ended May 13, according to S&P Global Market Intelligence data.

⮞ Regional malls continued to be the most-shorted REIT segment, logging the biggest drop in average short interest across all property types.

⮞ Pennsylvania REIT was again the most-shorted stock across all property types as of May 13.

M&A

* Timber real estate investment trust PotlatchDeltic Corp. agreed to merge with CatchMark Timber Trust Inc. in an all-stock transaction. The combined company is projected to have a pro forma market capitalization of more than $4 billion, based on the closing stock prices of the two REITs.

* SmartStop Self Storage REIT Inc. completed its merger with private REIT Strategic Storage Growth Trust II Inc. The stock-for-stock deal values Strategic Storage Growth's real estate portfolio at roughly $280 million.

Property moves

* An affiliate of Slate Asset Management LP paid C$518 million for about 800 acres of land in Hamilton, Ontario, from Stelco Holdings Inc. subsidiary Stelco Inc. in a sale-leaseback deal.

* JBG Smith Properties sold a two-building office complex in Washington, D.C., to Post Brothers for $228 million, Commercial Observer reported. The buyer plans to convert the 659,459-square-foot Universal North and South property into an apartment complex.

* Sterling Organization bought two grocery-anchored shopping centers for its Sterling United Properties II LP fund. The Grove in Windermere, Fla., and the Riverfront Plaza in Hackensack, N.J., were acquired for a total of $113.8 million.

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