5 at 5: Your Daily Digest for Real Estate Investing, 2/22/21

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© Provided by Millionacres 5 at 5: Your Daily Digest for Real Estate Investing, 2/22/21

Fed sounds CRE alarm, Texas biz climate takes a beating, a look ahead for Vornado, a loss for Marriott, and an extension for opportunity zone tax breaks.

In Today’s News

Fed Sounds Alarm on Commercial Real Estate, Business Bankruptcy

A new Federal Reserve report says that CRE prices “appear susceptible to sharp declines” from historically high levels, especially if distressed sales pick up or if the pandemic leads to longer-term declines in demand.

The Millionacres takeaway: Some days are easier than others for picking the top news for our real estate-focused readership. Today was easy. This Bloomberg report evokes memories of the “irrational exuberance” then-Fed Chair Alan Greenspan warned of a quarter-century ago.

‘It’s a Black Eye for Texas’: Power Crisis Blunts State’s Image As Business Utopia

Fortune writes that Texas has long pitched itself as a business utopia with no corporate income tax, a skilled workforce, and a low cost of living compared to the coasts. But after an intense winter storm left millions without power and water, Texas has taken a blow straight to its business-friendly face.

The Millionacres takeaway: Everything’s bigger in Texas, including the epic fail that still has a lot of people and businesses in the dark, including some facing unimaginable power bills. Businesses and people are flocking to the Lone Star State, and it will be worth watching what the bosses of its insular utility regime do to prevent another such infrastructure hammering — if anything.

Today on Millionacres

Where Will Vornado Realty Trust Be in 3 Years?

This business partner of a now-former president has a portfolio concentrated in the Big Apple and still has some big projects actively in the works.

The Millionacres takeaway: Rather than retreating from a battered office and retail environment, Vornado (NYSE: VNO) appears to be doubling down, Milllionacres’ Matt DiLallo explains. Whether you want to go on that ride? Well, that’s another story.

Marriott Records First Annual Loss Since 2009. Any Hope for Hotels in 2021?

It wasn’t all that surprising that this hospitality giant posted its first yearly red ink since the Great Recession, but there are still some takeaways here that need to be considered. Millionacres’ Matt Frankel provides them.

The Millionacres takeaway: Matt argues that 2021 will likely be a far better year for Marriott (NYSE: MAR) and the hotel business in general than 2020 was. But it isn’t going to spring back right away, even after a COVID-19 vaccination is available to anyone who wants it.

Opportunity Zone Extension Proposed in the House

The centerpiece tax break of the Opportunity Zone (OZ) Program would get two more years of life under bipartisan legislation introduced this month in the U.S. House of Representatives.

The Millionacres takeaway: As the program was at its inception, this is a bipartisan measure that very well may make it to the president’s desk. While the Biden campaign looked askance at some of these deferred capital gains incentives now in the tax code — notably 1031 exchanges — it’s reasonable to assume that, given the widespread adoption and win-win nature of OZ investing, this one will pass muster.

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