The hospitality sector is notoriously the most volatile of real estate asset classes. Business and leisure travel trends are highly correlated to broader economic conditions. And the sector does not have the benefit of long-term leases to help soften the blow of cyclical swings.
With the continuing retail bankruptcies, store closures and the overall upheaval in the physical retail sector, do investors still have interest in buying U.S. malls?
Venture capital investment in proptech has skyrocketed to record-setting highs, but landlords need to ensure they pick the correct technology upgrades. Investment in real estate tech companies globally hit $14 billion in the first half of 2019.
The resilience of co-working operators in an economic downturn or recession is debatable. “Most companies are tethered to lease obligations for six to 15 years, and to pay an early termination fee is cost-prohibitive,” says Scott Homa, senior vice president and director of U.S. office research with real estate services firm JLL. "So, the idea that coworking space would flourish in a downturn is not born out by past experience.”
Black Creek still sees opportunity in industrial and multifamily acquisitions in spite of low cap rates. NREI recently talked to Black Creek CEO Raj Dhanda about the firm’s recent capital raising and the market climate for new acquisition and development opportunities.
Climate change has grown into what should be a dominant consideration and risk for real estate investors. Many REITs have failed to properly take its effects into account with traditional passive diversification. This is partially happenstance, given how most real estate companies and REITs are created as locally-grown developers or nationally-focused product specialists.
The Low-Income Housing Tax Credit (LIHTC) is a federal tax credit created through the Tax Reform Act of 1986, and administered by the IRS, to encourage private equity investment in affordable and public housing by commercial real estate stakeholders.
Ascena Retail Group Inc.’s gloomy quarterly results are a reminder not just of why the giant chain feels such enormous pressure to change. They also show the challenges retailers face when they try to create a whole greater than the sum of its parts.
