5 at 5: Your Daily Digest for Real Estate Investing, 7/19/21

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© Provided by The Motley Fool 5 at 5: Your Daily Digest for Real Estate Investing, 7/19/21

Kite Realty buying Retail Properties of America, four REITs with reasons to rock, a big retail group name change, home sales slide a bit, FHFA sees not-so-adverse market and kills fee.

Today in REIT and Retail News

Shopping Center REITs to Merge in $7.5 Billion Deal

Kite Realty Group Trust (NYSE: KRG) and Retail Properties of America Inc. (NYSE: RPAI) today announced that they have entered into a definitive merger agreement under which RPAI would merge into a subsidiary of KRG, with KRG continuing as the surviving public company.

The Millionacres takeaway: The result will be a real estate investment trust (REIT) with 185 open-air shopping centers primarily located in what the companies call “warmer and cheaper” markets. Could be an appealing stock play for investors who want to stick with retail but avoid, say, traditional malls and/or colder and more expensive markets.

4 REITs That Will Be Better Than They Were Before the Pandemic

There’s no doubt it was a difficult year, but some companies managed to use adversity to their advantage — which is exactly why Realty Income (NYSE: O), Kimco (NYSE: KIM), Ventas (NYSE: VTR), and Simon Property Group (NYSE: SPG) will come out of this period better companies than when they entered.

The Millionacres takeaway: Our Reuben Gregg Brewer provides a quick, insightful look at each of these REITs that explains why they’re poised to pay handsomely to investors who get in when the time is right — and why now might just be one of those times.

Retail Real Estate Trade Group Changes Name But Not Initials

The biggest global trade association for the retail real estate industry is rebranding to update its image amid massive changes in the way people shop, CNBC reports today. The International Council of Shopping Centers said its initials ICSC will now stand for Innovating Commerce Serving Communities.

The Millionacres takeaway: The pandemic helped drive the name change, and a change of focus, just as it sped up industry trends that have deeply impacted the organization’s roughly 50,000 members in North America. But the big RECon show will be in person again this December in Last Vegas!

And Today in the Housing Market

Home Sales Slide in a Market That’s Still Very Hot

Redfin (NASDAQ: RDFN) says home sales nationwide fell 1.2% from May to June and that we’ve entered a new phase of the housing market, as prices have gone above what many can pay and many buyers sense a peak and will be listing this summer.

The Millionacres takeaway: Make no mistake: This is still a very hot market. At the same time as sales dipped, time on market, and median prices hit new lows and highs, respectively. Hottest of all? Austin, Texas, was up 43% in median price in a single year.

The FHFA Kills the (Not So) Adverse Market Refinance Fee

The Adverse Market Refinance Fee took effect late last year in the form of 50 basis points that lenders were required to pay for each such loan delivered to Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that guarantee, package, and sell mortgages under the FHFA umbrella.

The Millionacres takeaway: The fee was imposed to protect the GSEs and their investors from a flood of foreclosures that never happened. Killing it is a sign of confidence in the housing market, and it also means a savings of about $20 per month on a $300,000 loan.

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