WashREIT Sells 3 Power Centers, Focuses On Multifamily Assets
Zacks Investment Research | Aug 28, 2019 07:59AM ET
WashREIT (NYSE:WRE) has been executing its strategy to reduce exposure of high-risk commercial assets and recycle proceeds in value-focused multi-family properties. In line with this, it completed the sale of three power centers — the Centre at Hagerstown, Frederick Crossing and Frederick County Square (NYSE:SQ) — for aggregate gross proceeds of around $77 million, in a recent development.
The sale, along with the previously-announced disposition of five shopping center retail assets, spanning 800,000 square feet of space, for $485 million, was closed at a blended capitalization rate in the low 6% range.
The transaction also marks WashREIT’s $1.1-billion of deals executed, year to date.
In fact, the company also completed the sale of Quantico Corporate Center, for roughly $33 million this year. These dispositions have enabled WashREIT to focus on targeted multi-family properties. Notable acquisitions include 2,113-unit Assembly multi-family portfolio, spanning across seven assets, for around $461 million, and purchase of the 227-unit Cascade at Landmark for approximately $70 million. By end of this year, the company anticipates sale of another $125-$175 million of commercial assets.
These efforts will likely transform and de-risk the company’s portfolio. Such strategic capital allocation will likely realign the company’s portfolio. Furthermore, management believes such activities will stabilize and strengthen future cash flows, thus boosting the company’s ability to create long-term value for shareholders.
However, large-scale dispositions might result in loss of net operating income, in turn, impeding bottom-line growth.
Amid these, this Zacks #3 (Hold) Ranked stock has declined 1.8%, underperforming the Zacks Investment Research
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