The $5.2-billion acquisition of LaSalle by Pebblebrook was probably one of the most publicized REIT M&A deals for the year. At
the close of the merger, Pebblebrook became the third-largest
lodging REIT, as measured by enterprise value, and the largest
owner of independent and lifestyle hotels.
Pebblebrook’s lead advisor for the transaction was Brad Butcher
with Raymond James. Additional advisors included Ben Lett with
BofA Merrill Lynch and David Wright and Mark Wickersham with
Hunton & Williams.
Another large hotel deal occurred around the same time that
Pebblebrook was pursuing LaSalle: Wyndham Hotels & Resorts’
$1.95 billion acquisition of La Quinta Holdings’ hotel franchising
and hotel management business and the resulting spinoff of
CorePoint Lodging. The transaction added more than 900 of La
Quinta’s franchised hotels to Wyndham’s portfolio. CorePoint’s
portfolio holds 316 hotels previously owned by La Quinta.
Later in the year, Hyatt Hotels closed on the acquisition of Two
Roads Hospitality, a lifestyle hotel management company. And
Marriott Vacations Worldwide bought ILG in a mega timeshare
deal for $4.7 billion.
Along similar lines, two gaming companies also merged in 2018:
Penn National Gaming and Pinnacle Entertainment. Penn
National acquired Pinnacle in a cash-and-stock transaction that’s
valued at approximately $2.8 billion. The combined company owns
41 gaming properties in 20 jurisdictions across North America. The
transaction required extensive regulatory review and approval by
state and federal regulators.
Skadden’s Evan Levy, Stephen Arcano, Neil Stronski and David
Reamer represented Pinnacle Entertainment, with in-house reps
Elliot Hoops, Anthony Sanfilippo and Donna Negrotto. Timothy
Wilmott was Penn National’s in-house rep, while outside counsel
was Wachtell, Lipton, Rosen & Katz partners Daniel Neff and
One of the only major student housing M&As to close in 2018
was Greystar’s $4.6 billion acquisition of EdR, which made Greystar
the second largest institutional owner and manager of student
housing in the US. BofA Merrill Lynch served as exclusive financial
advisor, and Morrison & Foerster LLP and Venable served as legal
advisors to EdR. J.P. Morgan Securities served as exclusive financial
advisor, and Hogan Lovells US and King & Spalding served as legal
advisors, to Greystar. JPMorgan Chase Bank provided debt financing for the transaction.
In conjunction with the EdR purchase, Blackstone Real Estate
Income Trust partnered with Greystar Real Estate Partners to close
on the $1.2-billion purchase of EdR’s student housing portfolio.
The purchase was a 95%-5% joint venture between Blackstone and
Greystar. Citigroup Global Markets and TSB Capital Advisors acted
as financial advisors to Blackstone, and Simpson Thacher &
Bartlett acted as legal advisor to Blackstone.
The office asset class also saw its share of activity in 2018. In
September two REITs—Government Properties Income Trust and
Select Income REIT—created a single REIT to focus on the office
asset class, changing its name to Office Properties Income Trust.
estate partners Joshua Mermelstein and Nathaniel Lifschitz; tax partner Joseph
E. Fox; real estate associates Julianne E. Befeler, Lindsey M. Dubb and Nicholas
Mayer; and tax law clerk Evan M. Quinn.
Mermelstein, along with partners Robert Cassanos, Patrick Dowd and James
Wareham, led a separate team on Brookfield’s acquisition of the leasehold interest in 666 Fifth Ave. from the Kushner Cos. The Fried Frank attorneys working on
the deal included Anne Aufhauser, Melissa Brown, Freya Dear, Joshua Gelfand,
Josh Goldstein, Tam Ho, Daniel Jacobson, Jing Jin, Joel London, Ryan Rahman,
Stephanie Spell and Cyril Touchard.
Essentially, Brookfield picked up the stake Kushner earlier bought back from
Vornado Realty Trust, which continues to own the property’s retail component.
Financial terms weren’t disclosed, but the transaction values the 41-story,
1.5-million-sf tower at some $1.3 billion, according to RCA, which also puts the
deal in the No. 2 spot for 2018.
Kushner and Brookfield plan to launch a major program to upgrade the building—similar to 5 Manhattan West’s makeover—with Brookfield injecting up to
$700 million in equity. Before 2018 came to a close, Brookfield refinanced the
office condo; it now backs a $750-million first mortgage with ING Group and
$300 million in mezz debt from Apollo Global Real Estate.
Brookfield also became involved in another massive NY project, this time in
It paid $165 million for a four-acre development site in the Bronx’s Mott Haven
area. The parcel was assembled by Somerset Partners and the Chetrit Group for
a massive, 1.3-million-sf project of mostly residential space. Cushman &
Wakefield chairman Doug Harmon and executive managing director Adam
Doneger brokered the sale. A Pryor Cashman team of Todd Soloway, Danielle
Schechner and Ari Tran advised Somerset and Chetrit, while Fried Frank and
Jacobson LLP served as Brookfield’s counsel.
The project sits within the Harlem River Waterfront District, which is undergoing a city-led revitalization. About a third of the planned 1,300 units will be affordable and workforce housing. Brookfield plans to break ground this year.
In Brooklyn, it announced it would build two new rental buildings at the massive Greenpoint Landing site with Park Tower Group. The $2-billion project will
deliver over 1,200 units, with construction to begin in 2019. Brookfield and Park
Tower are already working on two other rental buildings totaling 800 units at
Greenpoint Landing, a 22-acre redevelopment project that will ultimately house
10 buildings totaling containing apartments, retail space, an elementary school
and a waterfront park.
2019, as noted before, shows every promise of being just as fruitful. For
example, this February Brookfield Business Partners reached an agreement
to acquire private Australian hospital operator Healthscope in a transaction
valued at approximately $4.1 billion. In connection with the merger deal,
entered into definitive agreements to
acquire 11 Australian
hospitals from affiliates of Healthscope
$859 million, and
lease the acquired
real estate back to
But stories like
these will be fodder
for another article on
one that does a deep
dive into its 2019