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Your Daily Digest of Real Estate News for Tuesday, Nov. 9, 2021: Switch the Next Data Center REIT

By Marc Rapport – Nov 9, 2021 at 8:00PM

Key Points

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Real estate business takeaways from today's news.

New REIT Alert: This Data Center Operator Is Making the Switch

Data center operator Switch (SWCH) now plans to convert into a real estate investment trust (REIT). Switch operates a premium data center business that has been growing at a healthy clip for years. However, the market hasn't given it enough credit for that value creation or its future growth potential. That's leading it to make the switch to a REIT, which also gives investors an attractive new option to consider. Motley Fool contributor Matthew DiLallo puts this move into context among the small constellation of existing data center REITs.

Why I Decided To Turn My Home Into a Rental Property

Motley Fool contributor Laura Agadoni explains here how she became an "accidental landlord" when her California home wouldn't sell during the housing crisis of 2008. That reaction to seeing prices collapse 50% in her local market started her on a journey that finds her now successfully operating as an investor and Realtor in Atlanta. Check this piece out to gain insight from her experience, both good and bad.

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2 Surefire REITs to Hold for the Long Term

Because they're required to pay out at least 90% of their taxable income as dividends, REITs tend to be good candidates for buy-and-hold investments, especially for the more conservative part of the portfolio that's targeted toward growth and income. But that doesn't mean you have to sacrifice the prospects for long-term capital appreciation. Here we share Motley Fool contributor Marc Rapport's take on two REITs that dominate their space in niches that could well be on the up and up for years to come.

In Today's News

RevPAR Will Be Back to PAR in 2023 as Hospitality Business Recovers from Pandemic

RevPAR may not be the most widely recognized shorthand in real estate investing, but it means a lot in the hospitality trade. It stands for revenue per available room, and this week, analysts with STR and Tourism Economics said they expect that critical metric to return to pre-pandemic levels industrywide by 2023. That's a full year ahead of what they projected this summer, the first upward revision in 16 years, according to reporting published online this week by Business Travel News.

Overall demand and average daily rates are expected to get there next year. That's very good news for investors in hotels, including through the big operators or through the hospitality REITs that specialize in those properties.

Artificial Intelligence Doesn't Look So Smart After Zillow iBuying Collapse

The shortcomings of using artificial intelligence (AI) to valuate real estate were put on stark display in the collapse of the Zillow Offers business last week. Zillow uses the technology to generate the Zestimates that the company itself was using to value the homes it would buy itself. CNN lays out what happened there in a piece posted today. The Wall Street Journal, meanwhile, had its own piece on that puzzle today, looking at what all this could mean for rival iBuyers Opendoor and Offerpad.

Marc Rapport has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Opendoor Technologies Inc., Switch, Zillow Group (A shares), and Zillow Group (C shares). The Motley Fool has a disclosure policy.

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