The Mood in the Market seems to be improving along with the activity.
A number of large transactions have taken place both in the U.S. and Canada,
activity in of itself is a positive for the market in commercial real estate.
Although there seems to be a cautious mood of optimism which is encouraging a number of large
ownership groups to review their portfolios and either sale off a portion for cash to pay off other debts
thereby deleveraging activity. Others are renegotiating their debt obligations with renewed rates and terms
which works with the business plan going forward. An interesting example of these transactions follows ;
 |
ProLogis (NYSE: PLD), the world’s largest warehouse and distribution center owner, has closed the sale of a portfolio of North American industrial properties to Blackstone Real Estate Advisors and a minority interest in a hotel to Hilton Worldwide for $1.01 billion, in a transaction reported by CoStar in a news story a little over a month ago.
The company received cash proceeds of $804 million, net of related expenses and funding of a preferred equity interest in the Blackstone entity that is acquiring the industrial portfolio of approximately $190 million. Blackstone also receives ProLogis’ 25% interest in the Hilton New Orleans Riverside hotel. The Denver-based warehouse owner and developer also expects to close the sale of stakes in three North American property funds to Blackstone in December after completion of administrative conditions.
Wells Fargo & Co. last week announced the funding of a $514 million syndicated five-year senior secured term loan to affiliates of Blackstone for the acquisition of the ProLogis portfolio of 182 properties in 19 states and 28 markets. The portfolio is comprised of about 23.2 million square feet primarily for the warehousing and transportation trades, and is leased to more than 500 tenants.
ProLogis has been trying to raise capital through stock and asset sales to reduce leverage. In a separate announcement Monday, ProLogis said note holders tendered $910 million in a repurchase of debt as of Nov. 19, exceeding the $500.6 million the company made available as part of its deleveraging and refinancing plan.
In the Health Care and Medical Services Properties / Assets…
“Positively, it expands coverage and its emphasis on improved efficiency and quality of care bodes well for medical office demand. Negatively, expansion of care that will come at a large cost could pressure those segments that rely on government reimbursements,” Moody’s said.
Senior Housing Properties Trust exercised its right of first refusal to buy assets from former parent Commonwealth REIT. The 27 properties in 13 states will close before June 30, 2011. The weighted cap rate for the properties is about 8.4% for the mostly older properties, which are 95% occupied and are leased primarily to medical services providers and other medical-related tenants. The largest properties, two office towers totaling 331,000 square feet and garages connected to Cedars Sinai Hospital in Los Angeles, traded at a lower cap rate and are mostly leased to medical practice groups affiliated with the famed hospital.
One of the most active buyers of medical property in 2010, Healthcare Trust of America, Inc. has year to date acquired about $412.3 million in medical office and health care-related assets totaling 1.9 million square feet. The properties are 98% leased with an average remaining lease term of over 8 years. HTA has agreements for the purchase of an additional $392 million in medical office buildings and health care assets totaling about 1.5 million square feet, expected to close by the end of the year. [ Costar Nov 2010 ]
What are you seeing happening in the market place from your perspective or vantage point ?
Let’s discuss it , leave a comment below or Join Us at www.yinvestthinktank.blogspot.com
Envoy Capitol Realty Inc., brorkerage Toronto / Canada
Email us at : capitalmoves@gmail.com
Nor Yeretsian [ Facebook ]
Yeretsianonrealestateinvesting's Blog 