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5 at 5: Your Daily Digest for Real Estate Investing, 4/1/21


Apr 01, 2021 by Marc Rapport
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The American Jobs Plan and real estate, another Great Wealth Transfer, proposed REIT law changes, Macerich offloads a mall for mixed reuse, and hotels slowly fill up again.

Today on Millionacres

The American Jobs Plan From a Real Estate Investor Perspective

The $2.25 trillion American Jobs Plan announced this week by President Joe Biden includes hundreds of billions in grants and tax breaks that directly affect residential and industrial real estate and their investors.

The Millionacres takeaway: Just for starters, there's $213 billion to "produce, preserve, and retrofit more than 2 million "affordable and sustainable places to live." Then billions more for reviving industrial real estate and the big enchilada: more than $600 billion for improving the nation's transportation infrastructure. This is New Deal-level stuff, and it's reasonable to expect that a lot of it will make it through Congress.

What is the Great Wealth Transfer, and How Will it Affect Real Estate?

The Great Wealth Transfer is already well underway as an estimated 73 million baby boomers age into retirement, transferring up to $59 trillion of wealth to the next generations through inheritances and assets like real estate.

The Millionacres takeaway: Our Liz Brumer writes here that a wealth transfer of this size and scale will have big impacts on the real estate market over the next 10 to 25 years, and she shares some specific advice on what individual investors should watch for and how they might respond.

Also in Today's News

Malls Tout Proposed Changes to REIT Rules as Good for Retailers

Retail Dive takes an in-depth look at a bill now in the House that would alter long-standing tax policy and make it easier for landlords to buy their tenants, which some see as more likely an attempt to save the mall.

The Millionacres takeaway: Not a lot of attention has been paid to this bill introduced in the House last month, and it hasn't been introduced in the Senate, but it could change ownership rules and other fundamental characteristics of many real estate investment trusts (REITs) if it ever passes. Read up to find out more.

Phoenix Mall Owner Sells, and Property Is Rezoned

Retail REIT Macerich (NYSE: MAC) announced Thursday it's sold a majority stake in Paradise Valley Mall in Phoenix to a mixed-use real estate developer, CNBC reports.

The Millionacres takeaway: Our Reuben Gregg Brewer just last month warned that this REIT had a worrisome debt load and advised looking elsewhere. This CNBC article includes several other examples of reuse for dying mall properties. The bad news for malls just keeps coming.

Vaccinations and Economic Stimulus Spur Rebound in Hotel Occupancy

The continued rollout of COVID-19 vaccinations and additional stimulus funds have strengthened the foundation for the recovery of the U.S. lodging industry. CBRE (NYSE: CBRE) Hotels Research is forecasting an average national occupancy level of 43% during the first half of 2021, accelerating to 55.1% in the second half of the year.

The Millionacres takeaway: That certainly is encouraging news for the hotel industry and its investors, but the report also says it doesn't expect to see pre-pandemic levels until 2024, and that recovery varies widely by locale and hotel type.

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Marc Rapport has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.