New demand for office space declines; Digital Realty unit lists in Singapore

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New demand for office space went down for a second month in October, hitting its lowest level since the first quarter of 2021, according to commercial real estate data provider VTS.

In August, new demand had hit its highest level since bottoming out in June 2020, boosted by widespread vaccination against COVID-19. It fell 15 points in September and 11 points in October, which could mean the initial post-vaccine pent-up demand has materialized, VTS said.

All seven markets analyzed by the VTS Office Demand Index, which tracks new tenant demand for office properties in core U.S. markets, logged decreases. Los Angeles, San Francisco, Boston and Seattle saw demand fall by at least 24%, with Seattle registering the greatest decline of 31% from September to October. Washington, D.C., meanwhile, saw its fifth consecutive month of declines in October.

Diverging paths

* Digital Realty Trust Inc. unit Digital Core REIT seeks to raise up to US$682 million in its IPO in Singapore, Dow Jones Newswires reported, citing a term sheet. The unit plans to sell up to 267 million units at 88 cents apiece.

* Shareholders of Condor Hospitality Trust Inc. approved the real estate investment trust’s proposal to sell all or substantially all of its assets and be dissolved.

Property moves

* Blackstone Real Estate Income Trust Inc. acquired the 102-property U.S. logistics portfolio of Cabot Properties Inc. as part of the latter’s $2.8 billion sale of its Value Fund V logistics portfolio to Blackstone Inc., Dow Jones Newswires reported.

* ViacomCBS Inc. confirmed it is selling its CBS Studio Center in Los Angeles and its associated operating business to a partnership formed by Hackman Capital Partners LLC and Square Mile Capital Management LLC for about $1.85 billion, Dow Jones Newswires reported. The property offers more than 1 million square feet and comprises 22 stages, a broadcast center and filmable backlot locations.

* Harrison Street Real Estate Capital LLC sold a pair of student housing portfolios comprising 37 properties and roughly 24,000 beds across 19 U.S. states for a total of $1.9 billion. Global Student Accommodation UK Ltd. acquired one of the portfolios totaling 12 properties and 8,182 beds across 12 universities from three Harrison Street funds and four coinvestment vehicles along with their operating partners.

* SmartCentres REIT will pay C$513 million to buy a two-thirds interest in 53 acres in SmartVMC, the planned city center of the Vaughan Metropolitan Centre in Vaughan, Ontario. The transaction more than doubles the Toronto-based shopping center REIT’s interest in SmartVMC and makes it the largest landowner in the Vaughan Metropolitan Centre.

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