US Real Estate Resilience Leaves Investors Desperate With $250 Billion

Market Insider, Real Estate
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It was highly expected that the COVID-19 pandemic would trigger massive defaults in the real estate sector on shuttering offices, hotels, and stores. A group of investors holding a record hoard of cash had sought to benefit from any upheavals in the industry that would result in a significant drop in property prices.

Real Estate Resiliency

That was not to be as the sector has remained resilient. Troubled properties are not coming to market as anticipated therefore thwarting the investor’s plans to put the hordes of cash running into $250 billion into use.

Real estate owners are not under pressure to sell their properties due to the shocks triggered by the pandemic. Similarly, real estate prices have continued to edge higher, much to the disappointment of the would-be investors who are waiting to pounce. Given the industry’s ever declining deals, prices are expected to continue rising given the elevated demand.

According to Will Sledge, senior managing director at Jones Lang LesAlle Inc., investor’s frustration is starting to roll over into desperation. A good number of investors with massive hoards of cash are now looking to push process up and yields down in an attempt to deploy capital.

While there is about $250 billion looking to enter the real estate market, the figure could edge higher going forward. Almost 30% of institutional investors are on the sidelines waiting for opportunities to crop up that will allow them to purchase highly depressed properties.

CenterPoint Acquisition

Even as institutional investors look for investment opportunities, real estate companies are also increasingly expanding their footprint in the burgeoning industry. Wood Investment Company is the latest to write a $35 million check for the acquisition of CenterPoint Marketplace in Meridian, Idaho.

The California commercial real estate company is to acquire CenterPoint with its 20 stores, including Dicks Sporting Goods, Hobby Lobby, Walgreens, and Verizon. It also becomes the company’s second-largest acquisition in the Idaho market, with a population of over 100,000 people. In late 2019 the company acquired Canyon Park East and Canyon Park West.

EXp World Holdings Growth

Amid the acquisition and expansion drive, real estate companies are also enjoying tremendous growth amid solid fundamentals in the real estate industry. EXp World Holdings is the latest to affirm the growth on exceeding 50,000 agents globally.

According to the company’s Chief Executive Officer, Jason Gesing, the growth trajectory is a huge validation of the agent-centric proposition. Agents are increasingly drawn to the company’s cloud-based model that comes with clear financial incentives and unrivaled technology.

In addition, eXp World Holdings is fresh from reporting an 84% increase in revenues that totaled $1.8 billion in 2020. The growth came at the backdrop of expansion into five new markets, including France, Portugal, Mexico, India, and South Africa

Separately, a St Pete real estate firm has committed to environmental sustainability with a $150,000 donation. Stonewege made the donation to help restore the more than 25,000 acres of native forests in Florida and Texas. The multifamily real estate investment and development firm has donated in partnership with the Arbor SDay Foundation.

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