Real Estate & SPACs... no bueno... except PropTech
Throughout Covid Season, SPACs are where the money is at with over $83b raised this past year alone & all the best companies in the world using them to go public. Since January 1st, investors have dumped $7.2b into SPACs!
Real estate guys are drooling but can’t figure out how this can work for a real estate play. Trying to modernize a REIT maybe? Look at “HOFV Stock”, the NFL Hall of Fame Development Project tried this and they went bust ($1.50/share). Mostly bc of COVID as they’re a pure retail/theme-park play.
Similarly structured, SPACs are looking to merge with sports teams (Red Ball Acquisition Corp run by Billy Beane & Sports Entertainment Acq Corp). I have a feeling the contract structure and idea is similar to publicly traded buildings in major cities. If a soccer player’s value goes up, stock price goes up. In European Soccer Leagues, the club owners own the actual players marketing rights & more. Imagine essentially owning Ronaldo stock. If his value goes up, the team stock goes up...or in this case the SPAC value goes up.
Currently PropTech companies are the only ones that make $ in the SPAC real estate world. It’s bc they are tech companies and have higher growths rates than real estate (usually). Porch.com is going public via PTAC. Up 35% from IPO.
A real sleeper is View.com merger with CFII (+25%). They make smart windows that dim according to the sun's orientation. It has raised over $1.8b from investors before 2021, and the SPAC is expected to bring an additional $1b cash. You can expect to start seeing these smart windows on many buildings. They're already installed at Facebook & Apples HQ in California.
Of all the real estate related plays, our fearless SPAC leader Chamath Palihapitiya's IPOB merged with Opendoor, a European house flipping tech company. This is up 175% since merging with his SPAC.
If anyone has ideas as to how this can work for a pure real estate play, please reach out to brainstorm. There’s something here and people will start using SPACs to take real estate developments and assets public. Only a matter of time until someone gets creative with this, hopefully one of us.