What I’m Reading
Short Term Bet: As thousands of retail leases come up for renewal, their duration is increasingly shrinking, as businesses grapple with an unpredictable future and look for ways to slash costs, stay flexible and maintain leverage over their landlords, even after the health crisis abates. If the market rebounds, this will put landlords in an advantageous position to raise rents sooner. However, if the market stagnates or continues to decline, it will put landlords in an even more volatile situation than they are in today with little long term contractual cash flow, making financing difficult. CNBC
Shots Fired: The Wall Street Journal pulls the mall decline analogy when discussing the future of the office market. Wall Street Journal
Plunging: As of February 26th, inventory of houses for sale in the US was at 325 thousand (7 day average), compared to 724 thousand the same week a year ago. That is a decline of 55%. Calculated Risk Blog
Terminal Decline: U.S. mall values plunged an average 60% after reappraisals triggered by bad debt in 2020, a sign of more pain to come for retail properties even as the economy emerges from pandemic-spurred lockdowns. Bloomberg
Growth Hack: Proptech has been one of the largest beneficiaries of the 2020 SPAC boom. This is providing funding for the development of new products that otherwise could have taken years via the traditional IPO pipeline. Globe Street
Chart of the Day
Equity extraction is the highest its been in a decade. However, its still less than half of the inflation-adjusted peak in 2006.
Source: Leonard Kiefer
WTF
Hard Time: A man was sentenced to 20 years in prison and a $251,000 fine after being convicted of cutting off his wife’s lover’s genitals with scissors because Florida (h/t Steve Sims). The Tampa Free Press
Claws Out: An ex-con is back behind bars after she allegedly struck her male roommate in the face with the pair’s cat because Florida. The Smoking Gun
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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