What I’m Reading
Expect Delays: NMHC’s latest Construction survey found that a whopping 98% of multifamily developer respondents reported being impacted by a lack of materials, the highest share since the survey began. In addition, 83% of respondents reported delays in permitting and starts, 72% reported deals being repriced by 5% or greater, and 100% reported seeing price increases in materials. 88% also reported being impacted by the lack of available labor, with 54% saying that there is less available labor than before the pandemic, even with higher compensation being offered. NMHC Conditions are ripe for construction costs to continue to rise, meaning that projects being planned or built today will need to achieve even higher rents in order to pencil. That also means that less will ultimately be built. The primary beneficiaries? Owners of well-located existing properties.
Back to Normal: The composition of lenders in the US commercial mortgage market has largely returned to its pre-pandemic form, according to new research from Real Capital Analytics. CMBS issuance, which had collapsed in the early days of the pandemic is back to its pre-COVID level of 18% of the originations market. Real Capital Analytics
Incoming Demand: Foreign investment in US real estate, which had dropped to its lowest level in a decade as a result of the pandemic, is poised to increase as travel restrictions loosen. The primary beneficiaries here should be more expensive coastal markets. MarketWatch
Deteriorating: The global semiconductor shortage that has paralyzed automakers for nearly a year shows signs of worsening, as a new wave of coronavirus infections halts assembly lines in Southeast Asia. Washington Post
Pile Up: Containers are piling up at US rail yards, with dwell times hitting record levels. This is contributing to port backlogs as there is nowhere for cargo ships to unload their containers. One of the culprits is a shortage of truck drivers to collect and drop off the containers. Ajot
Chart of the Day
Despite the epic rise over the past year, median rent as a percentage of income has held relatively steady. This is at least partially due to higher income earners entering the rental pool over the past decade rather than buying.
Source: RealPage
WTF
Stage Fright: A recent survey of 2,000 adults in the UK found that 18 per cent said that their most pressing back-to-office concern was pooping at work after enjoying their own restrooms while staying at home over the past year. (h/t Steve Sims) Indy100
Peep Show: Visitors at the Bronx Zoo got a surprise when they witnessed two gorillas engaged in oral sex. New York is back! NY Post
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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