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5 at 5: Your Daily Digest for Real Estate Investing, 10/26/2020


Oct 26, 2020 by Marc Rapport
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New home sales cool a bit, Blackstone's big bet on self-storage, CRE sales down and up, price dips and house flips, implications of another panic-buying wave.

In Today's News

Monthly New Home Sales Dip from August to September

Sales of newly built homes actually took a breather in September, the federal government says, declining by 3.5% from August to a seasonally adjusted rate of 959,000. But that's still 32% higher than September 2019.

Why it matters: What goes up must slow down, it seems. Demand for new construction is still being driven by low interest rates and rising demand in lower-density markets, like suburbs and exurbs, the National Association of Home Builders (NAHB) points out.

Blackstone's Private REIT to Buy Simply Self Storage for $1.2 Billion

Blackstone (NYSE: BX) Real Estate Income Trust (BREIT) today announced it would buy Simply Self Storage from a Brookfield Asset Management real estate fund for approximately $1.2 billion. Simply Self Storage is one of the top five private owners of self-storage, and the purchase will make BREIT the third-largest non-listed owner of storage in the country.

Why it matters: The Wall Street Journal points out that this continues Blackstone's strategy to attract more individual investors in addition to institutions and the ultrarich, and it adds to the argument that storage real estate investment trusts (REITs) in general are a timely buy.

U.S. CRE Sales Down from Last Year, Up from Last Quarter

U.S. commercial real estate activity fell 57% in the third quarter this year compared with last year but still rose 37% from the second quarter, according to the latest edition of "US Capital Trends" from Real Capital Analytics (RCA).

Why it matters: As GlobeSt.com pointed out in its piece on the RCA report, a lot of money waiting to buy distressed assets remains on the sidelines, accounting for only 1% of the overall market in the third quarter. By sector, though, distressed sales represented 3% of the volume in retail and 9% among hotel sales.

Today on Millionacres

Where to Get a Great Deal on a Home Flip Right Now

CoreLogic (NYSE: CLGX) says there are five markets that its data indicate could shed 70% or more in home prices in the next year: (hurricane-hit) Lake Charles, Louisiana; Las Vegas; Miami; Springfield, Massachusetts; and Modesto, California.

Why it matters: Millionacres' Aly Yale looks at foreclosures, too, to point out some other likely markets for good deals and argues that now -- with demand as it is -- is the time to strike, if you have time to research your target, and especially if you can pay cash upfront.

How Could a Second Wave of Panic Buying Impact Investors?

Will the COVID-19 plague kick off another round of panic buying as it continues to reach new daily records of infection?

Why it matters: As in all major events, good and, like this, tragic, there are opportunities that stand out to the alert investor. In this case that could be a range of storage and retail REITs that host essential businesses that stand to stay open even if there's another shutdown.

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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.