Real estate remains a top-performing asset and in robust demand among institutional investors and high-net-worth investors. This best-in-class asset comprises nearly $300 trillion in global value and continues to climb as demographics fuel international demand. From REITs to capital flows, from private equity strategies and value creation to booming demand for luxury properties, the DailyAlts Real Estate channel covers the top news and insights in the space
The events of 2021 forced us all to reconsider what the “essentials” in our lives are: Health professionals, our family, our health, home, friends, and a good internet connection. The third annual Global Alternatives Outlook by J.P. Morgan Asset Management recommends you add another item to that list of essentials – alternative investments.
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Tom Barrack, the head of Colony Capital (NYSE: CLNY), has hired several lobbyists to help assist the commercial mortgage industry. Barrack has been warning for weeks about the challenges the industry faces due to late or unpaid rents tied to the lack of economic activity.
Last year activist investor Bow Street won 4 seats on the Board of Mack- Cali (NYSE: CLI). This REIT invests in office and multifamily projects in the Northeastern United States.
Last week, Mack-Cali decided not to re-nominate those board members for a new term.
In their statement announcing the decision, Mack-Cali officials said the four had worked to blatantly promote Bow Street’s self-interest. The firm accused the activist firm of wanting to force a fire sale of the company as a whole or the assets one by one. Mack-Cali said selling would not be in the best interest of shareholders.
Like most Real Estate Investment Trusts, the prices of industrial REITs have declined sharply in the coronavirus driven selloff in the equity markets. While there may be real concerns for some sectors of real estate like office space, shopping centers, and even multifamily properties, industrial real estate may well see a dramatic increase in demand for the properties they own and manage.
Blackstone Group (NYSE: BX) is pulling out of a deal to buy an office property in Oakland, California, for $400 million. Blackstone had planned to use funds from its non-traded Real Estate Investment Trust (BREIT) to buy the Upton Station building from real estate and infrastructure invest firm CIM Group. Blackstone will forfeit a $20 million deposit to exit the transaction.
ITB is the largest ETF in the home construction space. It provides exposure to U.S. companies that manufacture residential homes by tracking the Dow Jones U.S. Select Home Construction Index. It currently has assets of $707.64 million and charges an expense ratio of 0.42%.
ITB may be ready to rebound, on account of both technical and fundamental factors.
Taubman Centers (NYSE: TCO) sent a letter to tenants last week saying that they must honor their leases and pay rent despite the spread of coronavirus. In a letter dated March 25, the mall operator said that it needs the cash flow to meet its obligations to utility companies and mortgage lenders.
Tom Barrack penned a white paper that outlines the need for massive and immediate relief in the commercial real estate lending markets. Barrack is the Chairman and CEO of Colony Capital (NYSE: CLNY). Barrack makes the case that if the commercial real estate lending markets fail, the spillover effect to the rest of the economy will be disastrous. He predicts the results “could be exponentially worse than the economic effects of the 1987 crash, September 11th attacks, and 2008 recession, combined. The long-term impact on the economy could be catastrophic.”
A LendingTree economist says the virus will bring the U.S. housing market to a halt. Further, Zillow Group (NASDAQ: ZG) announced Monday it will pause home buying in all 24 markets where ts Zillow Offers unit currently operates. The action was in response to local public health orders related to COVID-19. This has implications for the U.S. housing market.
The SPDR Dow Jones REIT ETF (IRE) has fallen by 38% in the past month as concerns about quarantines and lockdowns emptying offices, hotels, shopping centers, and other commercial real estate properties. Dire predictions about changes in work habits and a deep economic slowdown destroying the industry are everywhere on the internet and media.
Cohen and Steers issued a report this week detailing the firm’s outlook for real assets in light of the coronavirus and its impact on the economy.
The virus is likely to cause significant disruptions to travel, trade, manufacturing, and confidence according to the report with a potentially dramatic impact on asset pricing.
Wall Street is wasting no time discounting the economic effect from the deadly coronavirus, as seen from the very sharp cut in stock prices. It appears, however, that the real estate market is still ensconced in a cocoon of complacency, judging from the results of a recent survey by the National Association of Realtors (NAR). Home sellers may do well to dispose of their property to an iBuyer.
Foreigners located in Japan, South Korea, China have suddenly discovered the virtues of closing property deals in the US remotely and online, writes Natalia Karayaneva in an article in Forbes. And the coronavirus deserves the blame (or credit).
Two companies are collaborating to revitalize the market for Japanese homes.
A blockchain-powered solution may be the answer to the problem of millions of abandoned homes in Japan. Known as ‘akiya’ these ghost dwellings numbered about 8 million in 2013. This number has now ballooned to 10 million by 2020, and is on track to comprise 30% of all Japanese homes by 2033. Real estate crowdfunding via the blockchain may give these properties a new lease of life, according to Securitize.
Soho China could be next. Proving once again that the firm is fearless, private equity and alternative form Blackstone (NYSE: BX) is stepping up to the plate to bid for real estate in China. Blackstone is bidding $4 billion to take over Hong Kong-listed property company Soho China.
Global Medical reported that they had increased total revenue 42.3% period-over-period to $20.5 million, It cited its acquisition activity over the last twelve months for the boost. During the quarter, the REIT acquired five properties, encompassing an aggregate 185,220 leasable square feet, for an aggregate purchase price of $72.8 million at a weighted average cap rate of 7.4%.
For the quarter Funds from Operations (“FFO”) came in at $0.21 per share and unit. This was higher than the $0.20 per share and unit in the comparable prior-year period.
Global investment firm KKR, Korea real estate fund manager IGIS Asset Management, and Korean real estate developer SK D&D have purchased Namsan Square.
The property is an office tower located in the central business district of Seoul. They acquired the property from a real estate investment trust operated by KOREIT, a domestic asset manager in Korea.
Arbor Realty Trust (NYSE: ABR) has released a report that examines the state of the single-family rental (SFR) industry.
Arbor believes that 2019 will be looked back on as the year that the SFR business transitioned from a niche, alternative asset class to a mainstream property type. Millennials are still struggling with crushing levels of student debt and large down payment requirements are increasingly making the decision to rent a single-family home rather than buy one. That generation is catching up on household formation and as they starting new families many are deciding that the suburbs are preferable to downtown when raising a child.
The National Association of Realtors recently released a report outlining the impact of cannabis on commercial and residential real estate.
As legalization spreads across the United States, the industry is booming. Rising cannabis production had created an uptick in demand for industrial and office space. The Association States – where medical and recreational marijuana has been legal for more than three years – have seen more increases in demand for commercial properties. There has been a 42% in demand for warehouses, a 27% increase for storefronts, and a 21% increase for land.
Coldwell Banker Names Boise, Charlotte, Colorado Springs, Cincinnati, and Fort Worth Top Real Estate Markets
Coldwell Bankers, part of Realogy Holdings Corp (NYSE: RLGY), has released its annual Global Luxury Real Estate report. Titled simply “The Report 2020,” it analyzes the latest trends and data provided by leading influencers from The Institute for Luxury Home Marketing, WealthEngine, Unique Homes, and in-the-field real estate specialists.
IQHQ has come off a recent successful $770-million capital raise and acquired 109 Brookline in the Fenway section of Boston for $270 million. The building was acquired form Commonwealth Equity Partners (NYSE: EQC). This REIT has been selling noncore properties for years now and accumulating cash to reinvest when the markets pull back.
The National Association of Real Estate Investment Trusts (NAREIT) commissioned advisory and consulting firm EY to examine the economic impact that REITs have on the US economy.
Ellington Residential Mortgage REIT (NYSE: EARN) reported financial results for the quarter ended December 31, 2019. Ellington had an impressive quarter. Net income registered at $9.7 million, or $0.78 per share and Core Earnings hit $2.8 million, or $0.23 per share. Ellington had previously announced a dividend payment last month of $0.28. The current annualized dividend yield for Ellington Residential is 10.2% at current prices. Book value grew by 5% year over year.
Simon Property Group will buy Taubman Centers in a $3.6 billion deal.
The Invesco KBW Premium Yield Equity REIT ETF (NYSEArca: KBWY) shot up 3.6% on Monday on news of the transaction. Taubman Centers (NYSE: TCO) constitutes 3.7% of the ETF’s portfolio. Simon Property Group (NYSE: SPG) will pay $ 52.50 in cash per share of Taubman to acquire a majority stake in TCO.