Your daily summary of real estate investments, 05/21/21
Us what? Office space giant loses $ 2 billion in one quarter; home buying spree in the Lehigh Valley; Fannie / Freddie sweeten their multi-family loan deal; make CRE’s investment more accessible; and why Simon says so.
In today’s news
WeWork lost $ 2.06 billion in the first quarter, overwhelmed by the effects of the Coronavirus pandemic and a settlement with ousted co-founder Adam Neumann, Bloomberg reports [subscription required].
Millionacres takeaways: That’s four times the red ink the company released in the first quarter of 2020, although new management says customer demand now exceeds pre-pandemic levels. The new boss is also planning to try to go public again, too, this time. via a SPAC.
This the Wall Street newspaper room [subscription required] describes how local buyers far from big cities lose out in the face of investors and rivals with deep pockets in places where properties until a year ago offered affordable entry to the middle class.
Millionacres takeaways: This inside look at what’s going on in the town of Lehigh Valley in Bethlehem, Pa., Indicates that some of these buyers are immediately turning these homes into rentals, too much. And now the rents there are as high as mortgage Payments. It’s an old town of steel, the kind that was once iconic for places where houses would sit on the market for months. We are living in interesting times.
Federal officials ordered Freddie mac and Fannie Mae to buy more affordable apartment communities loans for low-income tenants – and to buy fewer luxury apartment loans – relative to their total revenue, reports WealthManagement.com.
Millionacres takeaways: This response to growing concerns about affordability of housing is good news for investment funds and other players, the article says, as these loans carry interest rate which can often be 20 to 30 basis points lower than those usually offered by Fannie Mae lenders. Nor are they government affordable housing programs, which makes rental prices more flexible and access easier, perhaps, for small investors.
Today on Millionacres
There’s a reason most real estate investors get their start in residential real estate: its lower price, ease of funding, and relatively simple management means it is much more accessible for the everyday investor. There is more money in commercial real estate (CRE), however, but the barriers can be high for the individual investor. However…
Millionacres takeaways: Investors no longer have to wait years, or even decades, to build a portfolio large enough to trade. Instead, there are a number of ways that everyday investors can get involved in commercial real estate for much less time, money, and effort. Our Liz Brumer explains how.
Our Reuben Gregg Brewer dissects a strategy by Simon Property Group (NYSE: SPG) which includes playing hardball with tenants and not rushing to fill the empty space left by retailers hit by a pandemic. He finds that promising.
Millionacres takeaways: And, our Laura Agadoni shares her point of view on another strategy Simon is taking: buying your own tenants: “Simon Property Group takes over another retailer: what it means for investors“When it comes to deciding whether to invest in the country’s largest mall owner, we’ve got you covered.