What I’m Reading
Trade Off: In an effort to hedge against further rising costs, 3rd party logistics companies are expanding their domestic warehouse space to reduce the frequency of long distance shipping. This, in turn is driving demand for warehouse space higher. According to CBRE’s Supply Chain Advisory, transportation costs can account for 50 percent to 70 percent of a US company’s total logistics spend. Fixed facility costs, including real estate, comprise only 3 percent to 6 percent. Globe Street
Boomerang: Pandemic supply chain issues are lasting much longer than anticipated. As a result, reshoring is on the rise. If 2H2021 progresses at the same rate as 1H2021, reshoring and foreign direct investment (FDI) job announcements for 2021 are projected to be over 220,000 – 38% above an excellent 2020 and, by far, the highest yearly number recorded to date. Reshoring Initiative I have been skeptical of this trend but the depth and persistence of our supply chain problems are making it more likely to have staying power.
Hybrid: Nearly a third of all digital retail transactions will be fulfilled by a physical bricks-and-mortar location, according to new research from Colliers, as more and more online orders become connected to stores. In 2020, just under 22% of digital sales were fulfilled by omnichannel methods. Globe Street
Clearing a Hurdle: The U.S. House of Representatives will vote this week on a bill that would let banks do business with cannabis companies without fear of penalty. If this ultimately passes, it would obviously be a very big deal for both cannabis tenants and the landlords that lease to them. Bloomberg
Bottleneck: Child care providers are struggling to hire enough workers to satisfy demand from parents looking to go back to work. The problem is a combination of low pay and little job security for employees. Unlike other employers that have attracted workers by raising wages, child care operations are constrained by an affordability problem that was stretched before the pandemic hit.
In the United States, child care for children younger than 5 and before and after school is mostly financed by private tuition. Yet more than 60 percent of families are already paying more than they can afford, according to a report published recently by the Treasury Department. Add in pandemic-driven health regulations that drove up costs substantially and require more staff and you end up with an untenable situation that is holding back the economy by not allowing parents to return to work. New York Times
Chart of the Day
Retirements are far above what was projected before the pandemic hit.
Source: The Daily Shot
WTF
Scene of the Crime: A man who stole a car from a dealership tried to sell it back to the same dealership days later because Florida. First Coast News
Surprise! Iguanas are crawling through bathroom vent tubes and ending up in toilets, often surprising residents because Florida. CBS Miami
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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