What I’m Reading
Up, Up and Away: The cost of construction materials is up close to 13% YoY, wreaking havoc on the budgets of contractors and developers. One thing that the COVID shutdown has taught us is that a supply chain that shuts down – even if only for a brief time – can take months (maybe years?) to restart if the ensuing recovery is strong. Bisnow
It’s Official: The Biden tax proposal will include elimination of the 1031 for gains of over $500k, taxing carried interest as earned income and eliminating the stepped up basis. Obviously, this is the first offer in a negotiation but if even a small amount of these proposals stick, it will dramatically reshape the estate planning and real estate investment playing fields. Bloomberg
Pent Up Demand: In what could be an early sign of office recovery, VTS’s Office Demand Index showed a substantial increase in March as companies that had been holding out began looking for lease deals. Its too early to say if this will prove durable or not and the report does go on to reference the stalled growth of office-using employment numbers as a substantial headwind. VTS
Sensing a Theme: For the second time in less than a week, Barron’s published an article openly suggesting that housing may be in a bubble and that CPI data that tracks Owners Equivalent Rent rather than home prices themselves is masking inflation – this time pinning the problem on the Fed’s mortgage bond buying. IMO, the strong demographics, low rates and relatively tight credit conditions underpinning the housing market indicate that we are not in a bubble. That being said, I agree with the second point in the article that OER is definitely keeping the official inflation data lower. Barron’s
On the Move: Hotel room rates are still lower than a year ago on average but are spiking as interest in travel increases among Americans. Travel booking tech firm Koddi says hotel demand was up 13.7% the week of April 11, indicating that rates could soon eclipse their pre-pandemic levels. CNBC
Chart of the Day
This is going to leave a mark.
Source: Truist Advisory Services
WTF
Packing Heat: A Missouri woman has been sentenced to 10 years in prison after pleading guilty to smuggling a loaded gun that was hidden in her vagina into a county jail. The Smoking Gun
Persistence: A woman was arrested after fleeing a DUI crash only to get in a second one shortly after because Florida. NBC 2
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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