What I’m Reading
The Long View: Despite the typical election year rhetoric, a historic analysis of commercial real estate done by Cushman and Wakefield shows that the asset class tends to perform well under both Democrat and Republican administrations. To be clear, individual sectors or strategies can absolutely be impacted by who occupies the Oval Office. However, we would all be wise to follow the macro conclusion in the CW report: Cushman and Wakefield
“Rather than elections, the real estate cycle, the economy, interest rates, COVID-19, geopolitical events, and long-term growth drivers (like demographics and technological change) are the areas to focus on in determining leasing fundamentals and property values.”
Top Heavy: Class A apartments in expensive coastal markets are leading the way when it comes to concessions. Nothing about this is surprising as nearly all of the new construction in recent years has been Class A and there are very few if any markets where there are a glut of Class B and C units. Globe Street
Soaring: US Single family home permits hit a 13-year high in September, cementing the housing market as the star of the economic recovery. One issue for builders going forward is going to be land inventory. Most, if not all builders were prepping for a slowdown when the pandemic hit and scaled back on land acquisition accordingly. Now builders are holding back inventory in an attempt to after selling at apace that they could only have dreamed of back in March. Needless to say, my contacts in the land brokerage industry are pretty much all having a strong year. Reuters
Excess Capacity: A company wants to turn an unused cruise ship into a floating “Crypto Cruise Ship” office for now remote techies, “digital nomads,” YouTube influencers, startups, and more. This would have sounded like hell to me even before the pandemic. I’d rather be waterboarded. Business Insider
Matter of Time: SPACs or Special Purpose Acquisition Companies have been all the rage on Wall Street this year. A SPACs is a shell company created with the sole purpose of using proceeds from an IPO for a yet to-be-determined merger or acquisition. It was only a matter of time before this trend took hold in CRE space. NREI
Chart of the Day
A little historical perspective on politics and real estate:
Source: Cushman and Wakefield
WTF
Red Handed: A Louisiana woman who was trying to ditch a bag of meth during a traffic stop (allegedly) threw it out of her car window and hit a patrolman. The Smoking Gun
Potty Mouth: A woman arrested for trespassing was hit with a second criminal charge when, after being asked to identify herself, she repeatedly told cops that her name was “My butt just farted” because Florida. The Daily Mail
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
Visit us at RanchHarbor.com