What I’m Reading
Back From the Dead: Congress seems poised to revive the EB-5 visa program with higher minimum investments. The reinstated program will also aim to crack down on gerrymandering of high-unemployment areas into shapes that include more prosperous places, which allowed developers a loophole to use the program for luxury developments (cough, cough, Hudson Yards). Bisnow
Upmarket: Single family landlords are increasingly targeting higher end houses that cater to wealthy renters. Bloomberg
Taking a Breather: The container ship backup outside the Ports of LA and Long Beach has fallen from 106 vessels in January to 48 today (before the pandemic it was unusual for more than one or two ships to wait for a berth). However, warehouses still don’t have enough workers or space to process and store boxes, and trucking firms remain short of drivers and the trailers needed to pull containers. In addition, a port labor contract negotiation this summer looms large. Wall Street Journal
Out of Date: Factors like pandemic proofing and ESG compliance could undercut values in as much as 75% of total office inventory according to a new analysis looking at obsolescence in the space. The capex burden to bring buildings into the 21st century will be massive and in some cases simply not feasible. Globe Street This will likely end up a tale of two markets where new, functional, highly amenitized product does great and older stock languishes with high vacancy and impaired valuation.
Its All Relative: Gasoline prices are through the roof. However, But the usage of gasoline per unit GDP (and in absolute terms) has declined since 2008, meaning that it has less of an overall impact on the economy than previous spikes. Econbrowser While total economic impact may be blunted, this is cold comfort to anyone on a tight budget who is struggling to make ends meet.
Charts of the Day
Corporate credit spreads continue to widen out.
As a result, real estate value versus bonds has compressed and now inverted. This showed real estate 20% undervalued versus Baa corporates just a few months ago.
Source: Green Street
WTF
Fly Like a Bird: Russia is making the absurd claim that the US is training birds to spread a Ukrainian bioweapon. The Drive Not sure who they think will believe this since pretty much everyone knows that birds aren’t even real.
Get Off My Lawn: A man was arrested for shooting a pistol into the air and threatening to shoot his neighbor (and the neighbor’s dog) for using a loud leaf blower because Florida. The Smoking Gun
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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