What I’m Reading
Blunt Challenge: The number of marijuana stores in the U.S. is poised to grow in 2021 and 2022 as more states legalize the narcotic, the federal government toys with legalization at the national level, and already large sales chains seek to get larger. This despite often complex webs of regulations, difficulty in obtaining financing and competition from the still-strong black market. As an aside, the RH Advisors team has arranged financing for several cannabis projects, including construction. If you need help navigating this space, please reach out. Commercial Observer
Checking In: The NMHC rent payment tracker for the first week of February came in at 79.2%, down from 81% a year ago. January collections finished at 93.2%, compared with 95.8% in 2020. I expect these numbers to improve somewhat with the new federal rescue package. Also, YOY comparisons will start getting weird after March so we will have to go back to 2019 for a better comparison to “normal” conditions. NMHC
Roll Up: Wall Street and Silicon Valley are pumping billions of dollars into mom-and pop sellers on Amazon, aggregating businesses and turning them into global brands. Bloomberg
Taking it Slow: Despite soaring housing prices in 2020, California single-family home permits rose only 4%, compared with 14% elsewhere in the US. Multi-family permits actually fell 15%. It really is that simple why it’s so expensive to live here. OC Register
Yield Starved: The average yield on US junk bonds dropped below 4% for the first time ever as investors continue to pour into any asset class generating cash flow, regardless of risk. This is yet another piece of data that continues to point towards cap rate compression in the coming quarters. Bloomberg
Chart of the Day
This one is insane. 2021 YTD is off the charts, so to speak.
Source: Redfin
WTF
No Justice .No Peace: A man was arrested for indecent exposure told police that he was “protesting for civil rights by showing his penis to traffic” because Florida. The Smoking Gun
No Bones About It: A man turned the skeleton of his metal-head uncle into a guitar because Florida. Huffington Post
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
Visit us at RanchHarbor.com