Displaying items by tag: CRE

The pandemic affected the economy in a variety of different ways, but combinations of unemployment and work from strategies caused a mass exodus from major American cities and New York has been no exception. However, UBS Group AG says that is about to change. They are recommending investments into REITs, e-commerce ETFs, and fintech/smart mobility in order to be a part of the comeback. A combination of higher vaccination rates and more tolerance for state and local governments to avoid shutdowns will help spur New York's comeback. They particularly cite Manhattan’s REITs for having a fruitful future.

FINSUM: More jobs than ever have moved fully remote and it's questionable whether the city lifestyle will be as appealing if it's not necessarily a requirement.

(Miami)

The latest CPI numbers have made a splash once again as prices make some of the fastest paces in growth since…see the full story on our partner Magnifi’s site

(New York)

Morgan Stanley put out a very direct research report this week. In it, it tells investors which stocks they definitely should not buy. The bank selected 22 “Secularly Challenged Stocks” which it says no one should own right now. Here is a selection: Alcoa, AMC Networks, Abercrombie & Fitch, CenturyLink, Macerich, Cheesecake Factory, H&R Block, Michael’s, and Molson Coors Beverage.

FINSUM: A lot of names one would expect here, but some that are a bit of a surprise. We certainly would not want to own Macerich given the state of commercial retail real estate, but CenturyLink would not seem nearly so dangerous.

(New York)

An event happened this week in the commercial real estate space that feels as though it might be seen as a canary in the coal mine for the forthcoming real estate crisis. The largest (and probably most famous) mall in the US—Mall of America—just fell behind on its $1.4 bn mortgage payments. The owner of the mall, which features over 500 stores and a theme park, missed its mortgage payments in both April and May, reports the Financial Times via Wells Fargo documentation. The owner, called TripleFive Group, has reported to Wells Fargo that it has suffered hardship because of COVID. Presently, nationwide about 1 in 5 loans bundled in CMBS are now on “watch lists”.

FINSUM: For context here, Macerich, which is one of the biggest mall owners in the country, disclosed that is has only collected 18% of rent it is owed in May.

(New York)

There have been all kinds of predictions for how COVID will affect real estate. The virus’ implications for commercial real estate are clearly bearish, at least in the short-term, but residential is a different story. While viewings are done, supply of housing is so tight that prices in April actually rose from last year despite the huge disruption to the economy. Home owners don’t want to move right now, so either aren’t putting their homes on the market, or are taking them off.

FINSUM: The other key thing to bear in mind is that home equity/leverage was in a very healthy place as this crisis unfolded, so homeowners are not underwater like they were in the last big crisis. Thus, there is a lot less pressure to fire sale.