What I’m Reading
The Great Invasion: Residents of Silicon Valley set their sights on Austin, Texas during the pandemic, making the city even more tech centric. The migration is also exporting Bay Area problems to Austin, resulting in a housing shortage that is threatening to price locals out, soaring prices and increased homelessness downtown. Bloomberg
Taking a Chance: Much to the chagrin of urbanists, families are leaving cities and moving to sprawling Las Vegas to take advantage of the low housing costs, outdoor lifestyle, family friendly suburban neighborhoods and the low taxes. Wall Street Journal
Positive Development: The Trepp CMBS Special Servicing Rate fell by 18 basis points month over month to 9.42% in March. This marks the sixth consecutive monthly decline in special servicing rates. The lodging sector delinquency rate dropped 41 basis points to 15.95% in March, according to Trepp, on the heels of February’s 272 basis point decline.
This continued improvement supports the thesis that economic reopening is a moment of truth for struggling properties. Those that were strictly casualties of the pandemic are recovering and able to restructure their debt or pay current. Those that had larger issues will end up in foreclosure or workouts. Trepp
Shrinkage: JPMorgan Chase will “significantly reduce” its office footprint in the coming years as it overhauls the design and usage of its workplaces, CEO Jamie Dimon said in his annual letter to shareholders. Though he acknowledged some limitations to remote work, Dimon said that up to 10% of the bank’s employees “in very specific roles” will work from home permanently. This has major negative implications for the struggling New York office market where the bank is the largest private occupier of real estate. Bisnow
Growing Divide: An estimated 150 million slipped down the economic ladder and out of the global middle class in 2020, the first pullback in almost three decades. Bloomberg
Evolving: Micro-fulfillment centers and automation will be critical for grocery chains to meet still-burgeoning demand for online orders and deliveries quickly and efficiently, according to a new report on the sector from JLL. Massive investment in this type of infrastructure spurred by the pandemic points towards productivity gains in the coming years. Globe Street
Charts of the Day
A look at the underlying strength of the housing market.
Source: A Wealth of Common Sense
WTF
In Touch With Nature: A naked man punched deputies who were attempting to question him after being found humping a tree because Florida. NBC 2
Heart Throb: Vladimir Putin was named Russia’s sexiest man in a recent poll of 2,000 people in the country. Apparently all these years of bare-chested horse riding and hunting excursions are paying off. The Moscow Times
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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