What I’m Reading
Tilting the Scale: Target institutional allocations to commercial real estate increased for the eight straight year in 2021 according to a recent survey by Hodes Weill & Associates and Cornell University. The average target allocations increased to 10.7 percent, up 10 basis points from 2020, indicating the potential for an additional $80 billion to $120 billion of capital to be allocated to real estate in the coming years. Allocations are expected to increase substantially in 2022 as well. This is happening at a time when state pension funds are flush with cash that must be reinvested into an environment characterized by high asset prices. Commercial Property Executive
Hot Seat: With inflation running hot, we are about to get a whole lot more focus on rents, which tend to be sticky to the upside and lag actual market movement thanks to a measurement quirk. Bloomberg
Warning Shot: Almost a quarter of financial-services firms are planning to reduce their workforces in New York City in the next five years according to a new survey from the Partnership for New York. This is a big deal for a city that is highly reliant on tax revenue generated by office workers. Bloomberg
Key Indicator: There are more than a few cross currents in the US housing market right now. However, the trajectory of the market – as always – will hinge on inventory levels, which are still quite low. Calculated Risk
Difficult Choices: Unprecedented demand for appliances and supply chain issues are forcing builders to buy early or go with non-matching sets. Globe Street
Chart of the Day
This is having a real and substantial influence on the labor market. More immigration would help. A lot.
Source: Diane Swonk
WTF
Fish in a Barrell: A drunk 19 year old was arrested when she rear ended a police car at a stoplight because Florida. Tampa Bay 10
Eat Fresh: A new lawsuit claims that Subway’s tuna salad contains chicken, pork and cattle DNA. NY Post
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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