What I’m Reading
Shrinkage: Tenant demand for warehouse space has never been stronger. At the same time, developers are having a hard time getting spec construction wrapped up and delivered. The time in between completion and stabilization has fallen as a result. In 2015, it took 3.9 quarters of lease-up for a building to become stabilized. In 2018, that number was down to 3.5 quarters. By 2020, it was at 2 quarters. In 2021, though, the period was down to 0.7, or just over 2 months. Globe Street
Shifting Focus: Foreign investment in US commercial real estate has exceeded pre-pandemic levels. The big difference is that overseas investors are focusing much more on warehouses and apartments than they were before the pandemic – just like domestic investors. Wall Street Journal
Rise of the Machines: Advances in warehouse robotics, coupled with increasing labor costs and difficulty in finding workers, has created a watershed moment in the logistics industry. As a result, McKinsey forecasts the warehouse-automation market will grow at a compound annual rate of 23% to be worth more than $50bn by 2030. The Economist
Big Cat Rescue: The wealthy Silicon Valley city of Woodside attempted to try to stifle California’s SB 9 law by claiming that the entire city was a mountain lion habitat. The town is now backing off after the threat of legal action from the state attorney general. New York Times
Next Up: So far, supply chain chaos has spared the accelerating pace of data center development. However, there are signs that the negative impact could be dramatic in 2022 with delays and rising costs on the horizon thanks to issues sourcing highly specialized equipment ranging from servers and network gear to generators and cooling systems. Bisnow
Chart of the Day
I find it extremely ironic that the lasting legacy of the housing bubble was not a glut but rather an extended period of extreme undersupply since population kept growing but nothing was built.
Source: Len Kiefer
WTF
Funny Money: A Phoenix Home Depot worker replaced $400k in cash with play money at the store she was working in. NY Post
Five Finger Discount: Police are looking for a woman with green hair who threw Barbie dolls at Walmart employees after they caught her shoplifting because Florida. Tampa Free Press
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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