What I’m Reading
Permanent Vacation: Vacation home demand is soaring during the pandemic as people with means look for places to escape to now that they can’t travel abroad. Wall Street Journal See Also: Park City, Utah’s housing market is white hot as wealthy buyers pile in, pushing median home prices above $2MM. The Salt Lake Tribune
Free Fallin’: San Francisco is now the worst-performing apartment market in the US. The median monthly rate for a studio in San Francisco tumbled 31% in September year-over-year. One-bedroom rents fell 24% and two-bedrooms were down 21%, to $2,873 and $3,931 a month, respectively. Bloomberg
Running On Empty: AMC Theaters could run out of cash by the end of 2020 or early 2021, creating yet another headache for beleaguered retail landlords. Variety
Calculated Risk: The market for new industrial product has been unsurprisingly strong during the pandemic and developers are not afraid to take leasing risk, with 62% of new inventory being build on spec. Cushman and Wakefield
And So it Begins: Freddie Mac has purchased its first multifamily loan indexed to the Secured Overnight Financing Rate or SOFR. SOFR, an interest rate banks use to price US dollar-denominated derivatives and loans, is replacing LIBOR, the long-standing benchmark rate used worldwide. The transition has been slow, to say the least but this is certainly a good indication that lenders will start moving in the direction of using it more. Globe Street
Boom Times: Wall Street banks are on track for a record year of revenue from trading U.S. government-backed mortgage debt, amid a surge in demand – from the Federal Reserve in its battle against the pandemic, and from investors hunting for yield. (h/t Taylor Grant) Reuters
Charts of the Day
Small business performance has flattened out and is running at around 75% of where it was in January. Not good.
Source: Opportunity Insights
WTF
Joy Ride: An 11-year-old boy stole a school bus and laughed as he led Louisiana cops on a police chase before crashing into a tree. NY Post
Indigestion: The owner of a BBQ allegedly physically attacked a Yelp reviewer who gave his restaurant low marks because Florida (h/t Steve Sims) The Smoking Gun
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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