Sportswear brand Under Armour announced it is taking 53,000 square feet in the space once occupied by the FAO Schwarz toy store on Fifth Avenue in Manhattan. Under Armour CEO Kevin Plank said its goal is to "build the greatest single retail store in the world." Under Armour and landlord Boston Properties did not disclose terms of the deal.
Multifamily REITs AvalonBay Communities and Equity Residential noted stronger headwinds in their second-quarter earnings, as both cut revenue forecasts and AvalonBay reported increased concessions. New supply and slowing growth of higher-paying jobs in San Francisco and New York are among the challenges, says Equity Residential CEO David Neithercut.
The single-family rental-home market will likely see consolidation as the market doesn't have the appetite for multiple initial public offerings, says David Auerbach, an institutional REIT trader with Esposito Securities. He also notes that industrial REITs are still in the early stages of accommodating e-commerce traffic.
When real estate becomes a stand-alone category in MSCI's Global Industry Classification Standard, it will be another step forward in a process that began decades earlier with the advent of modern portfolio theory, says Transwestern's Tom McNearney. After the carve-out, REITs can expect to see more capital invested and a lower correlation between their shares and stocks and bonds.
Facebook has agreed to build 1,500 units of housing for the general public in the Menlo Park, Calif., area as an overture to the community, which has become frustrated with Facebook's expansion and the lack of affordable housing. The housing would be developed on the site of industrial buildings Facebook owns, and 15% of the units would be reserved for low- or middle-income families.
The National Retail Federation is adjusting upward its forecast of US retail sales to predict a 3.4% increase for the year, up from the 3.1% predicted in February. Online sales are on pace to rise as much as 10% this year, NRF said.
Workspace Property Trust and Safanad have partnered to buy a 108-asset portfolio from Liberty Property Trust for $969 million. The sale is part of Liberty Property Trust's plan to sell between $900 million and $1.2 billion of noncore suburban properties this year.
As REITs' portfolios become more extensive, financial executives are offering investors pages of supplemental materials to explain performance, writes Jim Sullivan, managing director of the advisory and consulting group at Green Street Advisors. This tends to backfire as more information can obfuscate the most important valuation drivers, he writes.
Private buyers and international capital, attracted by low interest rates and strong fundamentals, are fueling some of the largest student-housing transactions in this cycle. The $1.3 billion purchase of University Housing Communities Group is an example, with the Scion Group partnering with GIC and the Canada Pension Plan Investment Board in the deal.
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