March Real Estate Trends: What Investors Need to Know
Courtesy of our own Aly Yale, here are some of the top real estate trends going on across the country right now, specifically those impacting house flippers, landlords, and other investors.
The Millionacres takeaway: Thumbs up for short-term rentals in non-touristy areas (think families freed from pandemic isolation) and thumbs down for easily finding foreclosure deals. Those are just two of the takeaways in this first installment of this Millionacres monthly update.
Should Retail REIT Investors Worry About the Short-Term Leasing Trend?
While the typical retail lease has historically run 10 to 20 years in initial term length, we're seeing more leases with timeframes in the three- to five-year range -- and sometimes even less. Should investors be concerned?
The Millionacres takeaway: Our Matt Frankel says yes, no, and maybe. While short-term leases keep space filled where it might otherwise be empty, it also makes it easier for tenants to come and go. On the other hand, if the economy heats back up, that space could be re-leased or go to new tenants at a higher price. So, maybe.
Also in Today's News
Drive-Through Lanes Become Hotter Commodities in Pandemic
The Wall Street Journal [subscription required] says today that real estate investors are taking note as Chick-fil-A, McDonald's (NYSE: MCD), and other restaurant chains use a socially distant business strategy to weather the COVID-19 crisis.
The Millionacres takeaway: These aren't just big dine-in chains offering drive-up service for the first time. Checking out this piece might inspire some thinking about how Mom and Pop can get involved, too.
Kohl's Says It Has No Plans to Sell More Real Estate and Buy It Back
Kohl's (NYSE: KSS) said it isn't planning for any further sales of its real estate to then lease it back, despite a group of activists pressuring the company to take this route to come up with cash, CNBC reports today.
The Millionacres takeaway: While such leasebacks are standard fare among retail real estate investment trusts (REITs), Kohl's feels it can do just fine owning its own property in some cases and leasing it in others. The company's stock has done well, despite the pandemic, and it's still a major presence in shopping centers across the country.
Apartment Rents in Coastal Markets Have Officially Hit Bottom
GlobeSt.com reports today that nine of the 10 markets with the most significant rent declines in 2020 had positive rent growth in February. For five of those markets, it was the first instance of rent growth since the beginning of the pandemic.
The Millionacres takeaway: This is good news for property owners and managers in those iconic markets -- like San Francisco and Boston -- and a positive sign for the pandemic recovery in general. But, New York continued to see rents fall.