What I’m Reading
Riding the Wave: Industrial supply is not likely to catch up with demand anytime soon, even as developers ramp up new construction. As a result, both rent and property values should continue to surge. Globe Street Much like what the market experienced during the pandemic, I expect that existing industrial market trends will only be exacerbated by the Russian invasion of Ukraine. For example, a major war that will disrupt global trade will only result in a more dramatic swing towards the “just in case” inventory model, which requires more warehouse space.
Ramp Up: Walmart continues to aggressively build out its supply chain infrastructure as its e-commerce business grows. Chain Store Age
Don’t Call it a Comeback: Downtown LA has been battered in recent years between the homeless crisis and the pandemic. Now retailers are starting to come back and some new hotel and housing developments are opening, giving residents a reason to live there once again. Bisnow IMO, the best thing that could happen for downtown and LA in general is a highly competent independent leader like Rick Caruso winning the upcoming mayoral election.
Bad Timing: Politicians and corporate leaders are pushing for a return to the office as transportation costs are surging. WFH is a great buffer for sky-high oil prices and has become the status quo in a lot of industries in recent years. Expect more pushback here. Bloomberg
Deep Cuts: SoftBank-backed non-bank lender Better.com, is laying off one third of its staff as refinance volume plunges. You may remember Better as the company that became infamous last year when its CEO mass-fired 900 employees on a Zoom call. New York Times So long as rates remain elevated compared to recent levels, I have a prediction for non-bank lenders: Pain.
Chart of the Day
Single-family rents have grown faster than mortgage payments, apartment rents, incomes and inflation over the last 21+ years. Look for mortgage payments and apartment rents to continue making a comeback.
Source: John Burns Real Estate Consulting
WTF
Head Scratcher: A box containing human heads being transported for medical research was stolen from a parked freight company truck in Denver. CBS News
Designated Driver: A golf cart driver in The Villages arrested on a drunk driving charge told law enforcement that she was at the wheel since her mother was too drunk to drive because Florida. Villages-News
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
Visit us at RanchHarbor.com