What I’m Reading
Pendulum Swinging: Geopolitical stability and improvements in transportation and communications in recent decades allowed companies and countries to opt for what seemed to be the cheapest and easiest supply chain solutions rather than the most secure. Recent world events have revealed the risks of opting for inexpensive over secure and the pendulum is swinging in the opposite direction. Howard Marks
Bad Timing: A wave of deliveries is making the NYC office vacancy situation even worse. Despite the diminished demand for office space, 8.8 million square feet will deliver into the market this year, the second highest delivery since 2007, underscoring the risk of development. It takes years to develop a large project. These buildings were underway long before COVID and you never know for sure what the future holds. Globe Street
On the Move: A record share of US homebuyers are looking to relocate as prices soar. Higher inflation and a severely supply constrained market, coupled with remote work are giving buyers more incentive than ever to relocate to less expensive metros. Redfin
Head in the Sand: The economy is strong and inflation is surging, yet for some reason the Biden administration is considering extending the student loan freeze which has been in place since March of 2020. The beneficiaries of the freeze skew more affluent and allowing it to expire would represent fiscal tightening – helping to fight inflation. Wall Street Journal
Risk Factor: A new rule change proposed by the SEC would require all U.S. public companies to report on their climate-related issues, their management of those issues, and the impact those issues have on their business strategies and consolidated financial statements. A large portion of public REITs have already been reporting on their climate-related risks on a voluntary basis so the new rule will not likely represent a substantial change in operations. Commercial Property Executive
Chart of the Day
Inventories are building rapidly. This both increases the probability of an inventory cycle recession – which had largely been mitigated by the just in time logistics model – and puts upward pressure on warehouse rents.
Source: Gavin Baker
WTF
Can’t Stop. Won’t Stop: A man who is awaiting trial for exposing himself in public and biting a police officer’s finger was arrested again because Florida. Tampa Free Press
In One End and Out the Other: 18% of respondents to a recent UK study admitted to eating food while on the toilet. NY Post
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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