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What Can Wedding Bells Tell Us About Hotels After The Pandemic?



Nearly half of couples who planned a wedding in 2020 postponed the ceremony or reception.

Love conquers all… and may also help speed the recovery of the hotel business in the post-pandemic environment.

Hotels, along with other parts of the travel business, were among the real estate sectors most severely impacted by the shutdowns due to social distancing requirements during the pandemic. Many parts of both leisure and business travel may be slow to recover, but there is one area that is practically bursting to get back to business: weddings, and wedding receptions.

Nearly half of all couples that had planned a wedding in 2020 either postponed the entire wedding until 2021 or later, or had a small ceremony but put off the reception to a later date, according to a recent survey by The Knot. In addition, as many as one-third of couples that did hold a wedding had a smaller reception and plan to hold a second, larger ceremony — perhaps a first anniversary celebration? — in the months ahead.

Wedding parties can drive a lot of business to hotels and resorts, including booking ballroom or outdoor event space, having food and beverage offered throughout the celebration, which often takes place over a couple of days, and of course the room reservations for the wedding party and guests. Wedding parties themselves are not a main driver of hotel earnings, but are a reasonable proxy for the return of other normal travel activities. Indeed, it’s not just weddings that are a source of post pandemic pent-up demand for events and travel that can spur a rebound in the hotel sector. Many other gatherings that were postponed during the pandemic may be rescheduled in the months ahead, from family get-togethers and college reunions, to visits with the grandchildren.

The hotel business, to be sure, still has a long way to go to recover from the pandemic. Total spending on travelers’ accommodations declined 70.8% in the second quarter of 2020, to an annualized $80.5 billion, from a $275.4 billion annual rate one year earlier, according to the U.S. Census Bureau. The start of the reopening of the economy allowed a partial rebound to $157.9 billion (annualized) in the fourth quarter of 2020, but this is still 43.5% below its 2019 pre-pandemic peak.

Business travel is likely to recover more slowly than leisure travel. Business transient travelers are high-margin customers, especially in major cities, and many hotels rely heavily on business travel. A survey by the Global Business Travel Association reports that total business travel expenditures in 2020 were 60% below the prior year — and spending during the pandemic months of April through December were down nearly 80% from 2019. Executives anticipate a modest rise in 2021, with business travel spending expected to increase 21%, mostly in the second half of the year as vaccines ease concerns about infection.

The shift to online business meetings, conferences, trade shows and conventions will remain a challenge to the recovery of business travel. The continuing rollout of vaccines against Covid-19 will allow some travel to resume in the months ahead, and most hotels have implemented careful cleaning procedures and touchless check-in to reassure travelers about safety. Some of the changes in business travel that took place during the pandemic may linger longer after infection rates subside, however, as firms have found that online meetings and conferences can save both time and money. A survey of business travelers by the American Hotel & Lodging Association (AHLA) found that just 29% anticipate attending a business conference in the first half of 2021, while an additional 36% plan to resume attending conferences in the second half of the year, with the remainder expecting in-person conference attendance to wait until next year or later, if they return to in-person conferences at all.

This divergence between the recovery of leisure travel and business travel is clear in the occupancy rates during different days of the week. Prior to the pandemic, overall hotel occupancy rates were comparable for mid-week stays, which include a large portion of business travelers, and on weekends, which are predominantly leisure travel. Occupancy rates for all days of the week fell sharply in March and April of 2020, but travel by essential workers kept mid-week travel, as measured by occupancy rates on Wednesdays, a bit higher than on Saturdays, according to data from AHLA. As the economy began to reopen, however, weekend occupancy rates rebounded much more rapidly than mid-week, indicating that leisure travel is recovering faster while business travelers are slower to get back on the road.

Financial markets are also seeing a brighter future for the hotel and travel business than they had feared during the initial months of the pandemic. One measure of this shift in sentiment is the stock market returns of Lodging/resort REITs since the announcement of positive test results for vaccines against Covid-19 early last November. Total returns (capital gains plus dividends) from November 2020 through the end of March 2021 have been an eye-popping 81.4% for Lodging/resort REITs. For comparison, the S&P 500 has delivered a total return of 22.3% over this period, and the FTSE Nareit All Equity REITs Index a return of 21.2%. (Full disclosure, I am senior economist at Nareit, the trade association representing REITs and public real estate.) Lodging/resort REITs have fully recovered their losses from the early months of the pandemic, and the improvements in the fundamentals for leisure and business travel are encouraging for future gains as the economy — and the wedding business — gets back to normal.

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Real Estate

Kimco Realty Adds Weingarten Realty To Its Shopping Cart



Empty shopping cart in the supermarket shopping mall

Today Kimco Realty
, one of the largest shopping center REITs in the US, announced it was merging with Weingarten Realty
for $5.9 billion in a mix of stock (90%) and cash (10%).  Each WRI share will be converted into 1.408 newly issued KIM stock plus $2.89 in cash per share and upon closing the combined entities will have an enterprise value of just under $20 billion.

Kimco and Weingarten are highly complementary as they own high-quality grocery anchored shopping centers, and the combined portfolio will consist of 559 properties in top MSAs.

One obvious benefit for Kimco is the fact that Weingarten’s portfolio is focused on coastal and Sunbelt markets that have performed relatively well during the pandemic. This merger creates significant synergies (around $30 million to $34 million) as the costs can now be spread across a $20 billion portfolio.

In addition Kimco expects to benefit from debt synergies, thanks in large part to the fact that Kimco is using most of its currency (90%) in stock and the balance in stock (10%).

I spoke with Kimco’s CEO, Conor Flynn and he explained that this merger will generate “lower leverage and enhance the long-term NOI profile” for the combined companies.

Kimco is currently rated BBB+ with S&P and Baa2 with Moody’s
and Flynn told me that the “next leg up is the A-rating” that the CEO is hoping to see in 2022 or 2023.

The cap rate on the Weingarten transaction should be immediately accretive and I view the 5.8%-ish cap rate to be extremely attractive and Flynn told me that “you can’t get that (cap rate) in the private market right now”.

According to Nareit data there are 18 shopping center REITs with a combined market capitalization of $52.5 billion. In 2020 the shopping center sector generated the second worst total return (-27.6%) behind regional malls (that returned -37.2%).

Although shares in shopping center REITs have rallied year-to-date (+26.1%) Kimco opted to purse Weingarten so it could use its cost of capital to transact the deal (purchase price was 90% in stock).

Another catalyst worth noting is Kimco’s  ability to drive NAV (net asset value) through a collection of mixed-use projects and redevelopment. The combined company has a potential of 41 projects that consist of 34 mixed-use and 7 master planned projects that include 1.7 million square feet in retail and 9,000 multi-family units.

Conor Flynn will remain the CEO of the combined company and Milton Cooper will remain as Executive Chairman. Weingarten will have one Kimco board seat. There is a break up fee of around 2.5% but I don’t anticipate another bid given the fact that it will take a large player like Kimco to execute on such a large transaction.

KIM closed up 2.31% and WRI closed +12.5%.

I own shares in KIM.

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Real Estate

Vacation Home Checklist: Keep Your Place in Perfect Shape



Vacation home checklist items to keep in mind

Everyone loves a good vacation, and the option of having a private retreat is one of the many perks of owning a vacation home. With the soaring demand and interest in vacation towns and affordable suburbs, there’s no better time to jump on the opportunity to own a vacation home than now.

Whether you’re taking in the last snowy days at your retreat in Whistler, BC, or you’re looking to invest in a sunny escape in Fort Worth, TX, it’s critical to close up your vacation home properly at the end of the season to ensure your property is safe when you’re back at your permanent residence. To help you get started, this eight-point vacation home checklist will make it easier to maintain your vacant home while you’re away.

Vacation home checklist: what to keep in mind

A home away from home can be a great investment and a handy retreat for vacations. However, making sure you’re sustaining and securing your property during vacant months will help prevent potential problems while you’re away. These can include:

  • Frozen pipes and leaks
  • Downed wires
  • Fallen trees
  • Pests and animals
  • Mold
  • Theft and vandalism

Thankfully, there are steps you can take to prevent these potential issues from becoming a vacation homeowner’s nightmare.

Secure your vacation home

1. Install a home security system

Leaving your home unoccupied for a season could leave it more vulnerable to burglaries or vandalism. A home security system is your first line of defense when you’re away, whether it’s your vacation home or full-time residence, and will allow you to monitor your home remotely. Some security systems can also include flood monitoring or smoke detection, giving you additional peace of mind. Depending on the system you choose, some may even come with an automation function that will allow you to schedule lights or turn a TV on and off, giving the appearance of an occupied home.

Have sufficient lighting in your vacation home checklist

2. Make sure you have sufficient lighting

To deter opportunists from approaching your vacation home at night, illuminate walkways, entryways, windows, and any dark corners with outdoor motion-sensor lights to startle would-be intruders. Indoor lighting is also critical in ensuring your home looks occupied from the outside as well. Simple outlet timers can help turn lamps on and off at intervals to make your vacant home look occupied. Keep in mind that when using outlet timers indoors that you ensure it’s visible from the outside, even through curtains or shades.

3. Consider smart locks

An essential step in your vacation home checklist is ensuring all windows, especially those on ground level, and doors have secure locks. Alternatively, you may also consider installing smart keyless locks that will allow you to grant remote access to neighbors or housekeepers. These locks provide additional control, security, and convenience, and may give you better peace of mind knowing you won’t need to keep track of any keys.

4. Adjust any blinds or shades and secure the windows

The key to deterring any surprises while you’re away is to make your vacation home look as if it’s being regularly visited, so be sure to include leaving any blinds or shades partially open in your vacation home checklist. Doing so gives the impression that your vacation home is occupied, and those passing by will see the lights through the blinds at night without being able to see fully into the house.

5. Ask your neighbors for help

Getting to know your neighbors can offer another line of defense while you’re away. Instead of leaving your key in a well-known hiding spot, give a spare set to a trusted neighbor so that they have access to the home in case of emergencies. Plus, it’ll ensure that you have another set of eyes watching over your home for suspicious activity.

Assemble a team of professionals

6. Consider hiring a landscaping service

Untidy hedges, overgrown grass, weed-infested gardens, or even overgrown shrubbery are dead giveaways of an unoccupied home. While a lakefront home in Seattle, WA might not need frequent upkeep compared to a beach house with a large lawn in Orlando, FL, investing in a routine landscaping service to maintain your property while you’re away will keep up the appearance of it being regularly visited. Plus, trimming trees and shrubs around the house will prevent them from blocking views of the house and removes any hiding spots for burglars.

Secure windows and adjust blinds in your vacation home checklist

7. Invest in a quality housekeeping service to maintain your home’s interior

If you’ll be leaving your vacation home unoccupied for an extended period, adding a regular cleaning service to your vacation home checklist will make returning even more welcoming. In fact, your housekeepers will be able to deep clean the hard-to-reach areas that are usually left out when your home is occupied for the season – like laundering the curtains, cleaning air conditioning vents, and shampooing the carpets. When you return to your vacation home, you won’t have to worry about dust build-up or stale odors from your home being left unoccupied.

8. Find a reputable property management company

The final item on your vacation home checklist is to find a property manager. If you lack a flexible schedule or don’t live locally, a property manager can relieve the everyday stress of maintaining a vacation home from afar. Property managers act as the point of contact to manage your home and can conduct regular walkthroughs to ensure your home is protected. Some companies may offer seasonal services such as preparing your home for winter.

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Real Estate

Median Home Listing Prices Hit Historic High Of $370,000 According To



Golden Austin Texas sunset over Cityscape

Median home listing prices hit a historic high of $370,000 according to Recently releasing its latest Monthly Housing Trends report, saw year-over-year median listing prices rise 15%.

While that’s good news for sellers buyers continue to compete in markets where multiple offers often come in six figures above asking price especially in those desirable California markets like Silicon Valley and Los Angeles. Competition remains stiff with 117,000 fewer homes “being listed each month compared to recent years,” according to the report.

In Silicon Valley recently there were 76 all-cash offers on a home as it went on the market according to CNN Business. A fixer-upper in Silver Spring, Maryland a Washington DC suburb boasted 88 offers, 75 were all-cash. Fifteen of those buyers had not even set foot in the home. tracked the 50 largest metros in its data. Some metros saw those listing prices shoot even higher than the national average increase of 12%. Consider that Austin’s listing prices increased by almost 40%. Right behind it was Buffalo at 28.3% and Los Angeles with a 24.8% median listing price increase. Despite these price increases homes are selling a week faster than a year ago.

Listen to Senior Economist George Ratiu. “The trillion-dollar question is of course how long can this continue? It’s the market reflecting typical economic problems.” Ratiu goes back to econ 101 on the law of supply and demand. “I do think as we move through summer sellers will be confident to list their properties as vaccination rollouts increase.”

The news gets even worse when you dig a bit deeper. Consider that nationally, the number of homes for sale in March decreased by 52% compared to March 2020. That’s even lower than this past February when inventory fell 48.6%. Crunch the numbers and that means there were 534,000 fewer homes for sale in March 2021 compared to March 2020 as we were just beginning the pandemic.

Since Austin is the best market in the country it’s no surprise inventory declined there 72.7% from last March. Other metros with strong declines included Jacksonville, Florida down almost 71%, and Raleigh, North Carolina where homes for sale fell 70.3%.

Here’s a deeper dive into’s numbers. The supply and demand fundamental is evident in markets across the country. The Austin metro saw the year-over-year median listing price increase almost 40 % to $520,00. Median prices rose 18 % in Phoenix to $477,000. Raleigh once considered “affordable” had a 12% increase to a median listing price of $420,000.

“I think as mortgage rates creep up as well as home prices, we will see the number of people who can qualify for mortgages dwindling,” Ratiu forecasts. If that’s true then we may see a shift away from a sellers’ market. Now that could be good news for buyers.

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