Real Estate Mergers and Acquisitions Surge Amid Suppressed Valuation

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The U.S economy is facing its biggest contraction in more than a decade owing to COVID-19 disruptions. Amid widespread contraction in some sectors, real estate has remained resilient, unlike a decade ago when it was the catalysts behind the financial crisis. Commercial real estate has been a bright spot in the sector as companies move to strengthen their holdings on key real estate properties at discounted prices.

KKR Acquisition

KKR is the latest to take advantage of the discounted prices in the commercial real estate sector. The leading global investment firm has confirmed the acquisition of a 600,000 square foot industrial distribution property in Pennsylvania.

The property that the firm has acquired is a fulfillment center completed in 2020 located in the Leigh Valley Market. With the acquisition, the company gains access to excellent connectivity to New York and the broader Tri-State area. Likewise, the property was 100% leased at acquisition to high-quality tenants.

KKR now owns over 31 million square feet of industrial property. Most of the properties are in strategic locations across major metropolitan areas across the U.S. Similarly, the firm has about $14 billion in assets under management across the U.S, Europe, and Asia.

Hawaii Merger

Likewise, Honolulu-based commercial real estate firm Hawaii Commercial Real Estate has merged with Elite Pacific, the parent company of Corcoran Pacific Properties. Under the terms of the agreement, Hawaii Commercial Real Estate founder Jamie Brown will become the combined company’s president.

The combined company will seek to pursue opportunities in the vast real estate sector, focusing on retail, industrial and investment properties. Brown’s firm should also be able to take advantage of Elite Pacific’s support team to enhance transactions marketing and the website at large. The deal should also lead to some synergy, especially between Elite Pacific’s 200 plus residential agents.

Apartment Investment and Management CompanySplit

Even as KKR was expanding its industrial property footprint, Apartment Investment and Management Company have confirmed its business’s separation. The result is the creation of two separate and distinct publicly traded companies, Apartment Income REIT Corp and Aimco.

Aimco becomes Apartment Investment and Management Company real estate investment trust focused on property development, redevelopment, and value creation. The company is to retain its growing business in the development and redevelopment of apartment communities. It will also pursue other value-creating investments across the U.S.

Aimco will trade in the New York Stock Exchange under the symbol AIV and will be under the leadership of Wes Powell as the Chief Executive Officer.

IRS Extends e-signature Provision

Separately, the Internal Revenue Service has extended the period during which it will accept e-signatures in forms. The original authorization was to run from August to December 31, 2020. Given the ongoing COVID-19 pandemic, the agent has extended the period through June 30, 2021.

Allowing forms to be e-signed remotely, printed, and mailed will help tax professionals and tax payer clients minimize the need for in-person contact with the IRS.

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