What I’m Reading
Fill Er Up: Winnebago is the latest RV/boat manufacturer to both solidly beat earnings and report a record backlog that the company is working with suppliers to work through. Sales from Winnebago’s towables segment nearly tripled year over year to $555.7 million. Motorhome sales were up 89% year over year at $385.3 million. (h/t Scott Ramser)
We believe that the best way to play this from a real estate standpoint is to invest in well-located boat and RV storage facilities. DM me if you are interested. Wall Street Journal
Tailwind: American household balance sheets are flush, with assets growth far outpacing liabilities over the past year. A lot of this is due to home price inflation and consumers tapping HELOCs for consumption and investment could provide fuel for economic growth. Bloomberg
Here Today, Gone Tomorrow: High vacancies have forced mall owners to court temporary tenants with cheaper rents and flexible terms to fill empty space. The Real Deal
Staying Power: Online grocery was a minuscule part of food retail before the pandemic. Now, about 60% of U.S. consumers have bought groceries online in the last 12 months, and most of them plan to keep doing so post-pandemic. Coresight Research
From a real estate standpoint, the staying power of online grocery shopping will be a tailwind for cold storage and also use of existing facilities as micro distribution centers.
Space Needed: The U.S. warehouse market is starting to look like the red-hot housing sector, as companies jockey for scarce distribution space to meet surging e-commerce demand. As a result, negotiated prices rose faster than asking rents in the first five months of the year. Wall Street Journal
At the same time, cities in high demand areas like the Inland Empire are beginning to push back on new development due to air quality and traffic concerns from residents, in some cases issuing temporary development moratoriums. The combination of these trends has all of the ingredients necessary for property prices and rents to continue their rapid upward trajectory. If you don’t believe me, look at what happened in the Bay Area over the past decade when proximity was critical for tech workers but development was constrained for political reasons.
Pullback: Lumber’s 50% fall over the past month is a good indication that commodity price spikes are indeed transitory. The old adage that high prices cure high prices is alive and well. New York Times
Chart of the Day
Huge YoY upward move in the composition of new home sale by price across all levels.
Source: Bloomberg
WTF
True Love: A disgraced Australian cop who was busted sniffing coke off of a Playboy model’s naked butt has embarked on a porn career with the same woman on Only Fans. Who says true love is dead? New York Post
Long Distance Relationship: A UK woman claimed that she is dating an alien that abducted her after she became sick of humans. Now, she wants to normalize interspecies relationships. Alternative headline: Mark Zuckerberg is Having an Affair. New York Post
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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