What I'm Reading Deluge: Office occupancy losses hit record lows in 2020, totaling 84MM square feet with more than half of the losses occurring in CBDs. Expensive markets with a high concentration of tech-and energy-companies were the most impacted. The only relative bright spots were secondary and tertiary markets, which...
January 21st – Misplaced Priorities
One Big Thing President Joe Biden comes into office with a housing plan that includes a $15,000 first-time homebuyer tax credit. IMO, encouraging first time homebuying is a worthy goal but doesn't really solve our current problem - not enough houses are getting built to satisfy existing demand, which would...
January 20th – Coming Into Focus
What I'm Reading Coming Into Focus: With COVID-19's resurgence, the early days of the Biden Administration will likely have a heavy focus on health and economic stabilization with an emphasis on infrastructure as well. As a result, it is less likely that proposals to narrow or eliminate 1031 exchanges will...
January 19th – Mismatch
What I'm Reading Mismatch: Residential development is booming and unemployment is relatively high, yet home builders are still experiencing a labor shortage. This is due to both a stigma about working in construction (even though it often pays more than some office jobs) and a lack of workers who have...
January 18th – Sharpened Pencils
What I'm Reading Sharpened Pencils: There is so much money flooding into the build-to-rent space that it is making land in outer-ring suburbs expensive and making deals difficult to pencil out. This is the point in the cycle where it takes aggressive underwriting to make a lot of cookie cutter...
January 15th – Plug and Play
What I'm Reading Plug and Play: Remote work (which may or may not be temporary) during the pandemic has fueled demand for furnished short-term housing. What I find interesting here is that mobility had been falling for decades and the accelerated abruptly. Question is what happens to that increased mobility...
January 14th – Fire Sale?
What I'm Reading Sale of the Century? Some publicly traded REITs are taking advantage of their shares trading at a discount to net asset value and buying their own shares. The private market premium is pervasive and has sparked debate over whether REITs are undervalued, private markets are overvalued or somewhere...
January 13th – Digging Deeper
What I’m Reading Digging Deeper: Last week’s jobs report was ugly on the surface. However, if you look deeper past the temporary losses, it was actually fairly strong given the circumstances and reveals the underlying resilience of the economy. Tim Duy’s Fed Watch Inflection Point: With a vaccination-fueled economic turnaround expected to begin...
January 12th – Fallout
What I’m Reading Fallout: CoStar is estimating that the reckoning from COVID will eventually result in $126 billion of distressed real estate sales with a heavy concentration in lodging and retail. However, with an estimated $200 billion of capital raised to capitalize on such an opportunity, it is difficult to see...
January 11th – Wait and See
What I’m Reading Wait and See: NNN lease investors had assumed that Republicans would win the Georgia Senate special election and the 1031 exchange would be safe. Now that the Democratic party candidates have prevailed, those investors are anxiously awaiting President Elect Biden’s first 100 day agenda to see if the...