What I'm Reading Backslide: Troubled real estate loans for the likes of retail and offices that saw payments get back on track after the 2020 crash are re-defaulting -- signaling more pain for commercial mortgage-bond investors. This is occurring as commercial landlords who lost tenants during Covid are still having...
April 4th – Fighting the Last War
What I'm Reading Fighting the Last War: We tend to look to the recent past to understand today's market. However, the inflationary period of the late 1970s - which saw a decline in real housing prices with nominal prices up somewhat - is probably a better analogy than the housing...
April 1st – Flexing
What I'm Reading Flexing: Leases on warehouse and distribution facilities are getting shorter as landlords seek flexibility to sign new tenants or renew existing leases at inflating rates. Typically, warehouse landlords (and lenders) have favored longer leases with strong credit tenants as a way to mitigate downside. High demand, tight...
March 31st – Easing Up?
What I'm Reading Slow Motion Crash? Two years after the initial covid outbreak, vacancy rates continue to climb in major office markets around the country, taking a toll on property performance. Barclays analysts noted last week that the share of office mortgages that have been assigned to either "watchlists" of...
March 30th – Sweet Spot
What I'm Reading Sweet Spot: Tight market conditions and rising land and construction costs in many markets and port cities led to limited development limiting new supply while demand for industrial warehouse space has continued to grow. Even though industrial returns are expected to decline, it should continue to perform...
March 29th – Off to the Races
What I'm Reading Off to the Races: Through the first three months of the year, 2022’s national rent growth is outpacing 2021’s record rent growth, according to Zumper’s National Rent Report published last week. Zumper Its almost as if home ownership becoming completely unaffordable creates more renters or something. Time...
March 28th – The Laundromat
What I'm Reading The Laundromat: “In the United States, as in many countries, real estate is an attractive investment for kleptocrats looking to park dubiously sourced money, as it continues to be one of the least transparent industries. This lack of transparency, and the flood of corrupt and illegal cash...
March 25th – Pendulum Swinging
What I'm Reading Pendulum Swinging: Geopolitical stability and improvements in transportation and communications in recent decades allowed companies and countries to opt for what seemed to be the cheapest and easiest supply chain solutions rather than the most secure. Recent world events have revealed the risks of opting for inexpensive...
March 24th – Terminal Velocity
What I'm Reading Staying Power: Zillow's latest forecast predicts that the year-over-year rate of home price growth will hit 22% in May before gradually slowing to 17.8% in February 2023. This despite a dramatic rise in mortgage rates and decline in household affordability. Zillow It's almost as if people who...
March 23rd – Booming Boomers
What I'm Reading Booming Boomers: Covid-19 kept many older Americans on the sidelines of the recovery in consumer spending as they held back from in-person services like dining and travel despite seeing their wealth increase dramatically. But their spending is picking up as the Omicron wave recedes, and analysts say...