What I’m Reading
Stepping Down: One of the cornerstones of former VP Joe Biden’s tax plan is eliminating the inheritance of property at a stepped up basis. This could have substantial value implications for commercial real estate – especially if the eventual plan classifies death as an immediately taxable event – since it would lead to meaningfully more tax-induced sales. Bisnow
Sounding the Alarm: Oxford Economics issued a report expressing concern about eventual commercial real estate loan losses substantially eroding bank capital. The good news is that banks have a much better capital position than they did in the last cycle. However, that additional capital may be needed to absorb losses in hospitality, retail – and eventually office loan portfolios. CNBC
You Don’t Say: Fitch Ratings has downgraded co-working giant WeWork’s rating regarding its ability to pay long-term debt, expressing concerns about whether anemic demand for WeWork’s services will recover despite recent progress in reducing its cash burn. FitchRatings
Greatly Exaggerated: Despite breathless reports of the imminent demise of the US dollar – which always seems to happen when a crisis hits – overseas borrowers have flocked to the dollar this year at a record pace. Bloomberg
Staying Power: The pandemic accelerated existing trends and lit a fire under the housing market. However, it is reasonable to ask if the housing market boom simply represents demand being pulled forward, which will eventually lead to a substantial slowdown. Wall Street Journal
Out in Front: Tech will mostly likely lead the next economic cycle. That could mean more bad news for office landlords as technology companies are also the most likely to embrace remote work. Globe Street
Chart of the Day
The pandemic has been rocket fuel for cold storage demand.
Source: Whipstitch Capital (h/t Scott Hogan)
WTF
Embrace Debate: A man was arrested for stealing a bulldozer from a construction site and using it to remove Biden for President signs on neighbors’ lawns because Florida. MyNews13
First World Problems: Billionaire investor Bill Gross is being accused of playing the theme from Gilligan’s Island on a loop to annoy a neighbor due to a dispute over a large, view blocking $1MM statue. As a reminder, Gross used fart spray and dead fish to make his last home uninhabitable before turning it over to his ex wife. This is the level of petty to which we should all aspire. LA Times
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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