Jobless claims in major dip, existing-home sales also take a slip, office space demand rising, Best Buy might not be retail REITs’ best friend, and two hospitality REITs to ride the rally.
In Today’s News
Jobless Claims Fell by More Than Expected Last Week
Applications for U.S. unemployment benefits fell to the lowest in a year, signaling improvement for the labor market as more Americans get COVID-19 vaccinations and business restrictions ease in many states.
The Millionacres takeaway: Bloomberg reports here [subscription required] that the 684,000 initial jobless claims was well below the 730,000 it had recorded in median estimates -- a 6% drop, to be exact. What that means is that employment is rising, and that’s just a good thing all around.
Existing-Home Sales Descend 6.6% in February
Existing-home sales declined in February following two prior months of gains, the National Association of Realtors (NAR) said this week, and only one of the four regions saw an increase.
The Millionacres takeaway: While that might sound like bad news, that’s compared to January. Year over year, sales are still up, and the only dark cloud the NAR reported here is the possibility that higher prices and mortgage rates will impede affordability.
Demand Is Suddenly Booming for Office Space
The national VTS Office Demand Index, which tracks tenant tours, both in-person and virtual, of office properties across the nation, posted significant gains in January and February and is now 38% lower than it was just before the pandemic. By comparison, it was 85% below pre-pandemic levels last May.
The Millionacres takeaway: Well, at least it’s within shouting distance of pre-pandemic levels and there’s optimism about more recovery, according to this report posted today on GlobeSt.com.
Today on Millionacres
Best Buy Closing Stores: What Investors Need to Know
Best Buy CEO Corie Barry announced late last month that while Best Buy (NYSE: BBY) has routinely shut down 20 large-format locations a year in the last two years, this year, a higher number of stores could be closed. The company has also been reducing the length of its average lease term to buy itself more flexibility.
The Millionacres takeaway: Best Buy stores take up a lot of square footage, and replacing them with other tenants would be problematic. As our Maurie Backman points out, real estate investment trusts (REITs) of the retail variety could really take a hit here.
2 Hospitality REITs to Buy Now
A receding pandemic is unleashing pent-up demand for travel. With that in mind, here are two hospitality REITs in particular that could be great choices for long-term investors looking to take advantage of the economic recovery.
The Millionacres takeaway: Our Matt Frankel takes a high-line look here at two REITs with different business models but similar reasons for optimism as COVID-19’s death grip on America appears to be loosening.