Mall values in the US have dropped by almost 60% following appraisals in 2020, which is a sign of more struggles for retail properties despite the economy emerging from COVID-19 enforced lockdowns.
Retail property values depressed
In 2020 around 118 retail properties anchored with commercial mortgage securities debt erased $4 billion in value following reappraisals. According to Bloomberg data foreclosures, defaults, and payment delinquencies triggered the reappraisals. The average decline reflecting value change since debt origination years back could underestimate losses especially when the properties are up for sales since retail real estate is in distress.
Currently, few buyers are willing to take the risk of aging shipping centers, with e-commerce taking most of the market share. DBRS Morningstar rating service analyst Gwen Roush, who tracks commercial real estate, said that the decline is eye-popping. Gwen added that when forecasting loss on the malls, there is even more haircutting of the value. Most centers suffered as departmental stores went bankrupt and high vacancy rates before the pandemic accelerated online shopping.
Realogy expands the RealSure program
Residential real estate services company Realogy Holdings Corp (NYSE:RLGY) has announced an expansion of its real estate program RealSure to Atlanta. Home sellers in Atlanta Metropolitan area with qualified work and property with a participant agent affiliated with Century 21®, Sotherby’s International Realty®, ERA®, and Coldwell Banker® will access RealSure service.
RealSure which is designed to help customers know the price they can sell at the market and if they can wait until their current home sells before buying is currently live in 12 markets in the US. As a result, RealSure addresses uncertainty around the selling of homes offering consumers certainty of 45 days cash offers and helping them decide whether to accept the RealSure Cash Offer. #
Trilogy raises $85 million to acquire more properties
Trilogy Real Estate Group has raised $85 million to acquire properties across the US. The new fund exceeded the original target of $75 million, with the company indicating that it will expand the fund size to almost $125 million. The company will use the fund in acquiring multifamily real estate assets in various markets across the US. So far, Trilogy has purchases properties in Ann Arbor, Mich, and Columbus.
Trilogy acquired 840 Ann Arbor apartment communities at the beginning of the year. The deal terms were not disclosed, but it marked the fifth apartment acquisition in Michigan. Last year the company acquired a 256-unit multifamily community in the Columbus suburb.
Doma to combine with Capitol Investment Group
Doma, a company looking to disrupt the real estate title insurance sector, and publicly traded special acquisition firm Capitol Investment Corp have agreed to combine. Currently, Doma, which used to be called States Title, has around 1% share of the US title market but expects the share to rise to 5% by 2023. Doma CEO and founder Max Smikoff said that he established the company to deal with frustration and friction from home purchase and simplify closing on a home.