The real estate industry has been on quite a journey over the last few years. After initially falling hard in the wake of the coronavirus and then quickly making a turn for the better, real estate prices have continued to soar to new heights since 2020. That’s just the housing market, though. What about the other assets that make up the real estate industry? How have they been doing and are any worth investing in?
With interest rates on the rise and many investors and traders uncertain of how to react to the Federal Reserve’s policy shift, one possible place to look for answers is in the investing habits of billionaires. These are the four real assets that billionaires have been buying up with tenacity as of late.
Casinos & Gaming
One of the most lucrative real estate investments as of late is in gaming.
Billionaires like Neil Bluhm have made astronomical amounts of money investing in gaming properties such as casinos, with Bluhm’s net worth reaching $7 billion just before the start of 2022.
With more and more people growing comfortable with the thought of traveling and returning to casinos, it could be a good idea to get ahead of the forecasted boom in the industry.
This prediction can be seen in the way Las Vegas and Atlantic City casinos, hotels, and restaurants are undergoing extensive renovations. They are prepping for an influx of visitors that could generate handsome returns for those who invest early in gaming assets. Given Bluhm’s net worth, his investments are worth paying close attention to.
After analyzing Wynn, MGM, and Las Vegas Sands, we see the latter having the biggest upside to the tune of 15% based on a valuation analysis. The general analyst consensus is more optimistic and forecasts a rise to $51.60 per share, suggesting as much as 40% upside.
During the COVID-19 pandemic, e-commerce and online retailers saw an unbelievable increase in shoppers. Amazon, Target, and Walmart all saw their profits skyrocket — and those are just the popular box stores and sites. Imagine what kind of potential the large luxury retailers have for real estate investors!
This potential is not lost on billionaires such as José Neves, who recently put a couple of hundred million dollars into Neiman Marcus in hopes of bringing it into the modern age with updates to the luxury retailer’s e-commerce platform.
As more and more billionaire investors put their money into luxury retailers, it’s clear to see they’re anticipating a similar pop in profits for these high-end names similar to what we’ve recently seen for the big box stores.
A popular complaint that has arisen in recent years regarding the increase in real estate prices is that this boom only benefits the sellers, not the buyers. For this reason, some billionaire investors — such as Donald Bren, the richest investor in the real estate sector — have decided to put their cash into multifamily rental properties.
Whether it be condos, apartment complexes, or townhomes, these investors realize that there will be many who are unable to outright purchase a home because of rising prices and will instead turn to rentals. Bren currently has over 120 multifamily complexes in his portfolio, and it wouldn’t be unreasonable to see that number increase going forward.
“The office is dead” is a prevailing but incorrect notion that has been repeated in the months since workplaces went remote. It’s easy to see why some people would think this way — after all, many workplaces remain remote to this day — but it’s even easier to see how lucrative office assets may prove to be in the near future.
In addition to his multifamily properties, Donald Bren has nearly 600 office buildings in his portfolio — and that number isn’t shrinking, either. Bren and other billionaires seem to believe quite strongly that the future of the workplace is not 100% remote nor 100% in-office, but a hybrid of the two. To them, this makes it worth gathering up office assets while they can.
The Bottom Line: Assets Billionaires Are Buying Hand Over Fist
Investing in what’s trendy doesn’t always guarantee success, however, looking at the impressive track records (and even more impressive net worths) of these billionaire investors and their investing habits as of late, it seems like these investments are more than just trend-chasing.
From Neil Bluhm to Donald Bren to José Neves and everyone in between, these four assets being bought hand over fist show great promise for retail investors in the coming months and years.