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Seven Must Reads for the CRE Industry Today (Aug. 12, 2022)

Morningstar looks at the most undervalued REIT stocks. Hotel demand and room rates are expected to hold up through the fall season, reports The Wall Street Journal. These are among today’s must reads from around the commercial real estate industry.

  1. The 10 Most Undervalued Real Estate Investment Stocks “It’s been an up-and-down ride for real estate stocks over the past year, but there may be opportunities for investors among undervalued, high-dividend-paying companies in the sector. Real estate investment trusts, better known as REITs, had their best year in history during 2021. The bullish combination of a booming economy and rock-bottom interest rates was rocket fuel for the group. Not only was the rebound in the U.S. economy a boon for real estate, but yield-hungry investors also flocked to the hefty dividends REIT stocks offer.” (Morningstar)
  2. Trepp 2022 CRE Sentiment Survey Results: CRE Avoids the Worst Despite Economic Headwinds “Trepp turned to practitioners for those answers. Between July 13-August 1, 2022, Trepp polled podcast listeners, clients, and TreppTalk blog readers for their perspectives on the near-term future of the CRE and CMBS markets. 70% of respondents expect that the office sector will see the biggest increase in distress for the remainder of 2022. 83% of survey participants predict that within the next six months, CRE/CMBS delinquencies will worsen.” (Trepp)
  3. Don’t Hold Your Breath on Hotel Prices Dropping This Fall “Seasonal patterns are back, which means it will cost less to book a hotel room in a leisure-focused destination this fall compared with the summer. But rates are higher than they were before the pandemic, as Americans have hit the road this summer and jammed many vacation spots. Hotel executives say they expect demand for rooms to continue in the coming months as business and group travelers resume meetings and conferences this fall, which affects overall expected room rates.” (The Wall Street Journal)
  4. In the Mile High City, Festivals and Food Are on the Rise “The restaurant and the hotel are among the fresh crop of ventures gaining buzz in this gateway city to the Rocky Mountains, which has reclaimed its prepandemic vibrancy. And visitors are welcomed with open arms: By year’s end, Denver International Airport — which the trade group Airports Council International recently ranked as the world’s third busiest facility — will have 39 additional gates, increasing capacity by 30 percent.” (The New York Times)
  5. Sam Zell-Packed SPAC Fizzles “The deflated SPAC market has claimed another victim. The Sam Zell-backed Equity Distribution Acquisition Corp. will close up shop next month after failing to find a merger deal, Bloomberg reported. The special purpose acquisition company will stop trading on Sep. 16 and redeem the outstanding class A shares to investors on Sep. 19. The firm went public at the height of the SPAC craze in 2020, putting a focus on businesses in the industrial sector. The SPAC described itself as targeting ‘unique or technology-enabled solutions across the value chain in the industrial and industrial distribution markets.’” (The Real Deal)
  6. How the Pandemic’s Office Overhaul Hooked CRE on Strategy and Consulting “The pandemic sped up the real estate industry’s push toward services and workplace strategy consulting.” (Bisnow)
  7. Walgreens Pays Bonuses Up to $75,000 to Recruit Pharmacists “Bonuses are on offer in certain markets in every state, according to job postings reviewed by The Wall Street Journal and people familiar with the matter. The $75,000 bonus that Walgreens is paying is rare; more common at the chain are awards of $30,000 or $50,000. The bonuses come with a requirement for pharmacists to remain in their jobs for a period, usually a year or more. A Walgreens spokesman said the bonuses are part of a larger investment focused on recruitment and retention. ‘This is one of many steps to address pharmacy staffing in some areas,’ he said.” (The Wall Street Journal)
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