What I’m Reading
Pile Up: Corporate tenants put a record 42 million square feet of space on the office market in the second and third quarters, according to data firm CoStar Group Inc. That increased the total sublease space in the U.S. to roughly 157 million square feet, or 1.7% of the total office inventory. It is the highest rate since CoStar began measuring it in 2005. Wall Street Journal
Concentration Issue: The Federal Deposit Insurance Corp. (FDIC) regards 356 banks as “concentrated” in commercial real estate, based upon criteria such as the ratio of their CRE loans to their capital base and the pace of loan growth over the past three years. This group largely consists of local and regional lenders and challenges faced by office, retail, hospitality and urban multifamily borrowers have regulators concerned. (h/t Taylor Grant) Washington Post
Renter Nation: RENTCafe.com projects that an estimated 45 million Gen Z-ers will have entered the housing market by 2025. Most of those young adults will be more likely to rent. “And, if the current behavior patterns of young Millennials and adult Gen Z-ers continue, the renting lifestyle is poised to regain some ground in the next decade and maintain a solid footing in urban areas.” What’s driving this? Part of it is the COVID recession but it also has a lot to do with dramatic increase in home prices. Globe Street
And So It Begins: Deutsche Bank Research released a note earlier this week suggesting that employers who allow employees to work from home should pay a tax to help cover the already-built infrastructure that they are not using. This sort of proposal is exactly why people hate economists. BBC
Sweet Spot: President-elect Biden is taking over at a time when COVID is flaring up again, which could lead to shutdowns and a prolonged recession. However, with a vaccine on the way, a dovish Fed and underlying strength in the housing market we may actually be headed into a sweet spot of economic growth when the virus fog finally clears – likely in 2021. Bloomberg
Chart of the Day
Yikes
Source: @SoberLook
WTF
Stiff Penalty: Jeffrey Toobin, who was fired from the New Yorker for masturbating on a company Zoom call, has been fired. It will be hard but I’m sure he’ll pull through and erect his career again. CNN
Grave Digger: A woman was arrested for (allegedly) stealing items from her late ex-husband’s grave because Florida. ClickOrlando
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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