What I’m Reading
Leveling Off: While demand for apartments will likely remain substantially above its historical norm, it seems likely that absorption volume will ease somewhat in 2022. This is likely as job growth will probably occur in more moderate wage positions at a time when rents are no longer bargains in gateway metros. RealPage IMO, 2021 was a snapback year for household formation and it is both logical – and healthy – for the market to level off a bit in 2022.
Shrug it Off: Industrial rents are rising at such a rapid clip that developers aren’t sweating spiking development costs. Bisnow
Around the Clock: The Port of LA will join neighboring Port of Long Beach and begin 24/7 operations in an effort to alleviate supply chain pressures before the holidays. While this is a step in the right direction, pretty much no one is taking advantage of Long Beach’s program thanks to red tape. Things will have to be streamlined for this to be a viable partial solution. Wall Street Journal
Dropping Like a Rock: Compass wanted to revolutionize the sale of residential real estate but its performance as a public company has been a dud. The stock is now down nearly 50% from its IPO in April. This performance is getting worse as the post-IPO lockup period ends and insiders (allegedly) look to unload shares. The Real Deal
Grounded: 99-year ground leases have long been used by New York office developers and land owners as a financing tool. Now the structure is gaining more widespread adoption outside of NYC and office product thanks to the launch of platforms like Safehold and Haven. Commercial Observer
Chart of the Day
Get ready to start hearing more about CPI excluding shelter, or as I prefer to call it, Community Adjusted CPI.
Source: Freddie Mac
WTF
If This Barn’s a Rockin…: A man was caught having sex with a horse after the suspicious owner set up a camera in the animal’s stall because Florida. The Smoking Gun
Yikes: A UK woman found a 4 foot python coiled in her toilet when she went to use the restroom. NY Post
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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