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5 at 5: Your Daily Digest for Real Estate Investing, 1/26/21

[Updated: Feb 17, 2021] Jan 26, 2021 by Marc Rapport
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A growing crisis in delinquent rents, construction starts down in 2020, Texas leads list of multifamily bright spots, and get ready for the Sears swan song.

In Today's News

Nearly 20% of Renters in America Are Behind on Their Payments

The typical delinquent renter now owes $5,600, being nearly four months behind on their monthly payment, according to a new analysis cited by CNBC. This also includes utilities and late fees.

Why it matters: The analysts cited here say that by March, about 6.3 million renters will be delinquent. It's getting worse. Stimulus aid will help, but nothing will help more than the pandemic being defeated and Americans returning to work.

Rent Collection Is Down, and Apartment Owners Feel the Squeeze

Multifamily properties were initially a bright spot during COVID-19, but banks now see more apartment debt as high risk, The Wall Street Journal [subscription required] reports today.

Why it matters: This piece dives into how broadly affected the multifamily market has been affected by the pandemic, from struggling tenants through troubled collateralized bond issues. It's not a pretty picture.

U.S. Commercial, Multifamily Construction Starts Down 20% in 2020

The value of commercial and multifamily construction starts in 2020 tumbled 20% to end the year at $193.4 billion, according to Dodge Data & Analytics.

Why it matters: Even hot markets like Austin and Dallas were down in these categories, says this report posted today by REBusinessOnline, while Phoenix was the only top 10 market that showed gains. Astute investors might spot opportunity for beaten-down markets here since a recovery is expected.

Today on Millionacres

Texas Dominates List of Suburban Apartment Complex Growth

Look to the Lone Star State for some good news about multifamily construction. A new report shows that 16 of the top 50 markets for construction of multifamily complexes with 50 units or more in the past five years are in Texas.

Why it matters: Despite the obvious, and deep, malaise affecting so much of the real estate market, there are still hot spots, and knowing where can help investors decide where to follow.

Is There Any Hope Left for Sears?

Hard to believe, but Sears (OTC: SHLDQ) is now down to just 74 stores, compared to nearly 1,000 locations as of three years ago.

Why it matters: Millionacres' Maurie Backman argues here the only thing to do with this historic brand at this point is sell off its remaining inventory and put those large, vacant storefronts to good reuse. And that could salvage value for investors in those properties.

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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.