CoreLogic finally settles on a buyer: The winners and the losers
CoreLogic stock price closed yesterday nearly two dollars more per share than Stone Point Capital will pay in its successful acquisition of the data and analytics firm. Stone Point’s successful bid to buy CoreLogic at $80 a share is below the rival bid from CoStar that wanted to pay $86.
So that’s surprise #1 on the deal: Why didn’t the board want CoStar? Did CoStar back out? Was the CoStar bid never serious in the first place and only served as some kind of distraction? We will never know.
Surprise #2 is that no one saw the Stone Point bid coming, much less winning. There were other bidders mentioned during the months it took to sell, but Stone Point managed to stay quiet this whole time. And if you work at CoreLogic, that level of secrecy should (and is) providing some cause for concern.
Stone Point is a private equity firm and when private equity takes over, there is often little net positive for the people who work at the firm that’s being taken over. For most workers, the best that can happen is plenty of change. Worse yet, you could lose your job in the restructuring. Worst of all, is when private equity slices and dices… and sells, sells, sells… the company piece by piece. (Go ahead, try to change our minds on this, email below!)
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Here’s where America is moving
It’s the Great American Migration. Millions of Americans ended 2020 living at a different address than where they started the year.
By October, 8.93 million people had moved since the pandemic began in March, according to an analysis of United States Postal Service change of address requests by the National Association of Realtors. That's an increase of nearly 94,000 from the same period the year before.
Most people left California and New York, but where did they go? Short answer is: everywhere else.
The state of Idaho topped Atlas Van Lines list for states with the most inbound moves, meaning more moving trucks were arriving in the state than leaving it. Also in the top 10 were North Carolina, Maine, Alabama and New Mexico.
However, U-Haul customers made Texas and Florida their top two destinations from 2016-19. Texas had the largest net gain of one-way U-Haul trucks for three consecutive years before Florida flipped the order and became No. 1 last year. Texas is second for growth, and Florida third, for 2020.
Ohio, Arizona, Colorado, Missouri, Nevada, North Carolina and Georgia round out the top 10 states for 2020 growth as self-movers continue to migrate to the Southeast, as well as markets in the Southwest, Midwest and Rocky Mountain regions.
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Crazy money flows into multifamily, buys up hotels and malls for housing
While these Americans are all moving into homes and apartments, there are other, abandoned properties that are going to need some love (and occupants) at some point in time.
Check out this quote from Ryan Williams, Cadre’s founder and CEO: “I believe we are entering a period that will potentially be a once in a lifetime opportunity to invest in attractively-priced properties.” Cadre is launching a new $400 million fund that’s meant to make it easier for individual investors, financial advisors and institutions to invest in real estate, according to Forbes.
Where will they spend it???
One new and neat pattern is that real estate developers are buying distressed hotels for bargain prices and converting them to more lucrative and much-needed affordable housing.
One such investor David Peters in Minneapolis told CNBC: “Apartments around here, you might pay $120,000 a door, and we can purchase these hotels probably $30,000 to $40,000 a door, and maybe put $10,000 a door into the renovations.”
Rise&Shred predicts that it is only a matter of time before other developers turn to the nation’s ailing malls to do something the same.
Prizm Outlet Mall, in Las Vagas, for example, recently sold at a Ten-X auction for $1.525 million — a 95% reduction in value from its July appraisal for $28.2 million!
So it’s either convert the malls into some much need housing or possibly rent it out to Amazon for its warehouse services.
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