What I’m Reading
Narrative Violation: For almost a year now, there has been a popular media and financial industry narrative that people are leaving San Francisco in droves and pouring into Austin and Miami. However, a new report from the postal service based on change of address (COA) requests found that majority of those escaping San Francisco during the pandemic instead relocated to other Bay Area counties. The top six destinations for those fleeing the city were all Bay Area counties: Alameda, San Mateo, Marin, Contra Costa, Santa Clara and Sonoma.
The only two out-of-state destinations that made it into the Top 20 were Travis County in Texas, home of Austin, which 239 households relocated to, and Denver, which was a destination for 238 households. In contrast 8,131 households relocated to Alameda County and 6,637 households went to San Mateo County. San Francisco Chronicle
Shake Up: Big tech-centric cities fell hard in the Milken Institute’s annual ranking of metropolitan areas with the best regional economies. They were replaced by smaller metros like Provo, Boise, and Reno that have benefitted from pandemic-spurred employment and migration trends (h/t Steve Sims) Axios
Shifting Focus: Foreign investors have long been drawn to US trophy properties like CBD office buildings, coastal resorts and urban shopping centers. Now their focus is shifting to less shiny bur more financially lucrative suburban warehouses as ecommerce growth continues to explode. Wall Street Journal
Eastward Bound: A combination of insatiable demand for warehouse space, soaring land prices and limited availability of new development sites is pushing demand further east, even as far as the high desert. Commercial Property Executive
Runaway Train: Demographics for household formation from 2020-2024 will arguably be the best in US history. With that tailwind, perhaps the only thing that can slow the rapid appreciation in the housing market is higher interest rates. Housing Wire
Charts of the Day
These charts of returns based on risk profile at origination from Crowdstreet are fascinating and bring to mind that old adage that there ain’t no free lunch. Three main takeaways:
- Good on Crowdstreet for the high level of transparency.
- This only furthers our resolve to avoid LP investments in ground up projects.
- How the hell did someone lose 100% of their equity on a “value-add” deal in this cycle?
Source: Crowdstreet
WTF
Desperate Measures: A Ukrainian man lied to police about committing a murder so that they would have to plow the snow-covered road that he lives on in order to arrest him. Yahoo
Liar, Liar: A Miami lawyer whose pants caught on fire during an arson trial was arrested on cocaine charges because Florida. Miami Herald
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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