Within the past week, Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) has made two real estate equity investments of about equal size. On June 21, it was announced that Berkshire agreed to purchase 38% of Canadian mortgage lender Home Capital Group (TO:HCG) for $300 million as well as providing a $1.8 billion line of credit at a rate of 9.5% as well as a 1.75% standby fee on undrawn funds.
Berkshire is paying an average price of C$10 a share, which is 33% less than the company’s closing price on June 21.
On June 26, Store Capital (NYSE:STOR), a real estate investment trust, disclosed that Berkshire has purchased a 9.8% stake in the firm for $377 million. Berkshire’s purchase price of $20.25 per share represents a 2% discount to the stock’s closing price on June 23.
Store Capital focuses on service-sector investments where there is little or no competition on the internet. The company’s biggest customers include a Midwestern furniture retailer, a large movie theater chain (AMC Entertainment Holdings(NYSE:AMC)), and a chain of preschools. Warren Buffett stated at Berkshire’s annual meeting on May 6, 2017, that its furniture businesses, including Nebraska Furniture Mart, have seen little effect from online shopping.