What I’m Reading
Teeing Off: After years of languishing, demand for private golf club community amenities is at an all time high. The sport – and real estate developments centered around it – had been experiencing declines as younger generations tended to show less interest than their parents. Then the pandemic hit, remote work became a “thing” and all of the sudden golf is hot again. The predictions about battles over the redevelopment of unused courses are on hold, at least for now. Front Office Sports
Contrarian Bet: Real estate developer Hines is partnering with a South Korean pension fund to develop a $2.5 billion office in apartment project in San Francisco on the site of PG&E’s office campus. I’m very interested to watch how this plays out in the coming years. San Francisco has been hit hard but is still relatively expensive and facing both public safety and remote work headwinds. Wall Street Journal
Space Race: After dropping in the early days of the pandemic, self storage demand has soared as Americans carve out space in their homes for offices, classrooms and gyms, sending occupancy and rental rates to record highs. New York Times
Winter is Coming: Supply chain issues are likely to persist at least through next spring. This means that everything from holiday foods and toys to staples like clothing will be hard to find in the coming months. As a result, retail giants like Walmart and Home Depot are chartering their own ships – some deliberately small enough to unload at secondary ports – to gain more control of their supply chains. In other words, Black Friday is going to be lit AF this year. Axios
Competitive Edge: Landlords and employers are coming to the realization that office space needs to compete with home offices. As a result, well-heeled landlords and employers are spending big to retool spaces to meet new space demands. Los Angeles Times Two big takeaways here: 1) The gap between the haves and have-nots in the office sector will grow substantially; 2) High capex spend and turnover cost were big issues for office landlords before the pandemic – and will get substantially more burdensome.
Chart of the Day
The rent premium for Class A properties over Class B communities is climbing again, after falling for most of the past year. Seems absurd to write this after such a runup, but this is bullish for value add.
Source: RealPage
WTF
New York is Back: A naked man carrying only a gym bag has been sighted numerous times roaming the streets of the Upper East Side and Midtown. NY Post
Back at It: The South Carolina couple who pleaded guilty earlier this year to multiple indecent exposure charges–one of which involved a sex act in a glass gondola on the Myrtle Beach SkyWheel–was arrested today for allegedly again committing illicit acts in public. Nothing but respect for the hustle here. The Smoking Gun
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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