There are a lot of trends happening in real estate. That's been the case for a while now, as the pandemic has created a lot of winners and losers. Some sectors fell temporarily at the height of the pandemic and have since bounced back with a vengeance while others may never be quite the same. If you're feeling confused about which way the various real estate sectors are trending, it may be worth looking at what some real estate billionaires are doing with their own money. Here's a peek at a few of the trends real estate billionaires are buying into or holding on to right now.
There's no question remote work exploded in a big way during the pandemic. Pretty much anyone who could possibly do their job from home did so -- for a while. While it's almost certain there will now be more people telecommuting than before the pandemic, office space as a whole is looking safer and safer as we get closer to whatever the new normal will be. While some companies are allowing permanent work from home, many are preferring at least a hybrid arrangement where employees come in a few days a week, and others are bringing their employees back to the office full-time.
With a net worth of over $16 billion, Donald Bren is the wealthiest real estate baron in America. His properties are located mostly in Southern California, and he also owns real estate in Manhattan. His portfolio currently includes more than 560 office buildings. That's a significant chunk of real estate, and it seems to suggest that he's not feeling too fearful about the future of the office.
Rental property investing is heating up, and Bren is a big player in this space, too. With over 125 apartment complexes in his portfolio, it seems safe to say that he sees a bright future for this real estate sector as well. With prices up and availability down, more would-be homeowners are choosing to rent instead. The supply isn't there for that increase, and the result is dramatically increasing rents and reduced vacancy. Property technology, or proptech, is also taking a lot of the work out of managing rental properties. From apps that streamline applications and tenant screening to platforms for finding and coordinating with vetted service professionals, investors may find they can save considerable cash by self-managing their properties.
In addition to owning sports teams and online gaming businesses, real estate tycoon Neil Bluhm is also a major investor in gaming properties. He owns several casinos spread across four cities, and he's not the only one anticipating renewed interest in casinos as the pandemic wanes. Atlantic City casinos are spending millions on redesigns -- including gambling floor remodels, hotel room makeovers, and new swimming pools and restaurants -- to prepare for what they expect to be a very busy summer. So it looks like Bluhm may very well be onto something.
Bluhm is also a believer in luxury retail, owning a few such properties in Chicago that have done well. After so much talk about the rise of dollar stores at the height of the pandemic, you might not think luxury retail would be a hot item right now. But Bluhm is far from alone in banking on the future of these properties. Billionaire José Neves saw e-commerce as the future of luxury retail back in 2007 and founded Farfetch as a global online luxury marketplace. But his company is now investing $200 million in Neiman Marcus with plans that include incorporating technology into its retail stores to make shopping in person a simpler, more immersive experience for consumers.
Should you buy into these trends?
Real estate trends come and go all the time. You never want to buy into anything just because everyone seems to be talking about it. But if some of the top seasoned investors in the country are willing to put their money in something, that's worth paying attention to. And sometimes, just watching what they aren't doing with their money, like taking it out of something they've been invested in for a while in a panic, is worth watching as well. If you're intrigued by any of these real estate trends, consider exploring them further and maybe checking out some related real estate investment trusts (REITs) to determine whether they might be a good investment for you.