What I’m Reading
Go Time: Majority Leader Chuck Schumer is pushing the Senate toward lifting the federal prohibition on marijuana with legislation that would represent the biggest overhaul of federal drug policy in decades. The plan goes beyond decriminalization and is expected to remove marijuana from the list of controlled substances and tax and regulate it on the federal level while leaving states able to enforce their own laws regarding the drug.
This is huge news for the cannabis CRE space as it will result in more and cheaper financing for such properties. However, it is a double edged sword as lease rates should fall (substantially in some cases) as risk premiums for renting to tenants who are technically operating a business that breaks federal law disappear. Bloomberg
Black Box: The Archegos Capital blow up is a good indication that we really have no clue how much leverage is obscured in the system. Howard Lindzon
Grab Bag: Here is an early look at what will be in President Biden’s proposed $2 trillion infrastructure and jobs plan:
“The plan includes $621 billion in infrastructure spending dedicated to rebuilding the nation’s roads, bridges, ports, and rail systems. It also contains $300 billion to bolster manufacturing, $213 billion for affordable housing, and a collective $380 billion for research and development, modernizing America’s electricity grid, and installing high-speed broadband around the country. The plan also includes $400 billion for home- and community-based health and elder care.”
Staying Power: Online sales are still booming, even as store shopping begins to pick up steam again. Chain Store Age
Headwinds: Demographics are in the proverbial sweet spot for medical office. However, the widespread adoption of telemedicine that took hold during the pandemic presents a potential challenge. Wall Street Journal
Bottleneck: The Ever Given was finally dislodged from the Suez Canal this week. However, a major backup in the global logistics system is still unresolved – tens of thousands of containers holding millions of dollars’ worth of goods are stuck offshore, within sight of docks at the ports of LA and Long Beach which are jammed with still more containers. (h/t Steve Sims) Wall Street Journal
Chart of the Day
The ability to refinance in 2020 allowed property owners the option not to sell, largely insulating the market from large price declines. I know I sound like I’m beating a dead horse here but this is NOTHING like 2008.
Source: Real Capital Analytics
WTF
Ancient Remedy: A Louisiana man who was being questioned by police for acting erratically claimed that the meth in his pocket was “salt which he had to treat an in-grown toenail.” The Smoking Gun
Explosive Story: A 63-year old doctor who was arrested for drug possession was also found to have several homemade bombs because Florida. Wink News
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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