What I'm Reading In N Out: Starwood is throwing in the towel on the mall business, selling 22 of the 30 malls that it owned before COVID and taking a loss in order to get out from underneath approximately $2 billion in CMBS debt. Essentially, Starwood decided that they will...
July 14th – Target Rich Environment
What I'm Reading Diamond Hands: Baby Boomers hold the lion's share of real estate wealth in the United States and are showing a higher inclination than previous generations to age in place rather than moving to assisted living. The result has been less housing supply for subsequent generations. New York...
July 13th – Risky Business
What I'm Reading Liftoff: With apartment shortages across much of the country, rents are climbing at the fastest pace seen in decades. Smaller growth markets like Boise continue to lead the way. With for sale housing expensive and development not keeping pace with demand in most places, the real risk...
July 12th – Uphill Climb
Chart of the Day Focusing interest rates and demographics today. First off, safe asset interest rates have been trending downward for much longer than most of us recognize. 700 years(!) per a Bank of England working paper. Source: Bank of England Second, long term demographic growth in the US is...
July 9th – Cause and Effect
Charts of the Day Home prices are now around 35% higher than they were at the peak of the housing bubble. http:// At the same time, average 30-year mortgage rates have fallen from around 6.75% in 2006 to just under 3%. http:// Additionally, real disposable personal income is up by...
July 8th – Wealth Effect
Chart of the Day US household wealth as a percentage of GDP went off the chart over the past year and a half. The trend should be a substantial tailwind due to the wealth effect where people tend to consume more when they are relatively better off. Today's levels dwarf...
July 7th – No Vacancy
Chart of the Day As a general rule, most large apartment landlords set rent to try and maintain 95% occupancy at their properties. A 5% vacancy factor is typically used for loan sizing, so there is very little upside from a valuation perspective. The prevailing view in the industry is...
July 6th – Sea to Shining Sea
Between the holiday week, a 5-year old's birthday party and a cross country due diligence trip, I'm spread a bit thin this week. Rather than shutting it down for a few days, this week will be only charts. Have one that you want featured? Email it to me and tell...
July 2nd – Stop
What I'm Reading Mission Accomplished? With the housing market running white hot for a year, calls are growing for the Federal Reserve to start tapering its $40 billion/month purchase of mortgage-backed securities. Given the current environment - both fixed income and housing - there is a heated debate as to what...
July 1st – Hiding in Plain Sight
What I'm Reading Hiding in Plain Sight: It's well known that US infrastructure from roads, to bridges, to tunnels is falling apart. The tragic Florida condo collapse this week highlights another type of private infrastructure disaster that may be much more widespread than we currently think. Justin Gillis highlighted the...