What I’m Reading
Compression: With Class A cap rates at incredibly low levels, industrial real estate investors are increasingly targeting well-located B and C product to generate higher returns. According to a new report by Cushman and Wakefield, average cap rates for Class A properties declined by 33 basis points year over year in 2020 while Class B and C properties declined by 58 basis points and 89 basis points, respectively. Cushman and Wakefield
High Demand: The global cold-storage construction market is expected to grow to $18.6 billion in 2027 from $7 billion in 2019 thanks to increased demand for online grocery shopping. This trend was well underway before the pandemic and accelerated dramatically in the past year. In 2019, only about 5% of groceries were purchased online, according to Bain & Co. That figure grew to 10% last year and Bain forecasts it could get as high as 12% by 2025. In other words, still tons of room for growth but this is a capital intensive business that is increasingly reliant on tech and the big boys like Americold and Lineage have a near-stranglehold on the space. The Wall Street Journal
K-Shaped: Lower-priced single family rentals are experiencing rents below pre-pandemic levels. However, higher priced unit rents are up substantially YOY, according to CoreLogic’s Single-Family rent Index. CoreLogic
On the Move: One in three Americans plans to move in the next 12 to 18 months or is undecided about staying in their current residence, according to the latest results from Pitney Bowes’s weekly BOXpoll. However, a new report by RCLCO found that the flight to the suburbs narrative may be a bit overstated. Globe Street
Bottoms Up: No surprise here but Americans downed a ton of booze while locked down last year. Bloomberg
Chart of the Day
New homes priced under $150k are about to go the way of the dodo.
Source: Calculated Risk
WTF
Baaaaad: A couple in their mid-70s was caught allegedly stealing lamb from a Naples Costco by shoving it in their pants because Florida. ABC 7
Thanks For Nothing: An intoxicated man was arrested for pulling a gun on a cop after the officer gave him a ride home because Florida. ABC 20
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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