College students' rental habits may find their way into wider market | Timber REITs would benefit from Vanguard's proposed ETF index change | Hedge funds won't back Sabra's proposed acquisition of Care Capital
July 26, 2017
The daily source on REITs and real estate investment
College students are becoming used to viewing and renting out an apartment entirely online and will probably not have the patience for more traditional apartment-renting processes when they leave school. "This demographic is a really interesting testing ground for the future of real estate," says Sam Bernstein, CEO of startup LoftSmart.
Timber REITs, especially Weyerhaeuser, could receive a boost from a Vanguard proposal to swap the index it uses for Vanguard REIT ETF to an index that contains timber REITs in order to gain a broader exposure to other sector funds. The change could bring in hundreds of millions of dollars to timber REITs.
Hedge funds Eminence Capital and Hudson Bay Capital Management will vote against Sabra Health Care REIT's proposal to acquire Care Capital Properties because, they say, the skilled-nursing provider is struggling. Their refusal to back the deal shows that activist investors can kill deals as well as force sales.
Small investors are purchasing the buildings that house smaller-format Walmart grocery stores in the South, as retail real estate with tenants that fare better against e-commerce competition attracts more investments. Four of Walmart's Neighborhood Market sites in Tennessee were sold to an investor for $49.5 million, and three other sites are in the process of being purchased.
Property investors from around the world are investing in single-family homes in such cities as Detroit and Flint, Mich.; Gary, Ind.; and Memphis, Tenn., attracted by low prices and high yields. In most of those Rust Belt cities, the majority of single-family home purchases are by investors.
The idea that renters only prefer urban living is a myth, says Steadfast Apartment REIT President Ella Shaw Neyland, pointing to US Census data that show that more residents are abandoning downtown areas to move to the suburbs. Reasons include the expense of urban living, the better school districts often found in the suburbs and the growth of ride-sharing, which has made transportation easier.
General Growth Properties is seeking San Francisco's approval to shut down the Macy's department store at Stonestown Galleria and replace it with retail, restaurants and a multiplex movie theater. "Stonestown is a great asset in a great location, and we see this as an opportunity to help take it to the next level," says David Cuthill, vice president of development for the REIT.
Link REIT of Hong Kong is considering the sale of 20 retail shopping centers, the largest asset disposal since the fund was established in 2004. The move would allow the fund to take advantage of soaring commercial property prices.
Economists don't anticipate a rate hike during the Federal Reserve's two-day policy meeting. Instead, the focus will be on any announcements by the Fed on when it will begin unwinding its $4.5 trillion balance sheet.
