What I’m Reading Long Shadows: Office distress has yet to really materialize. However, the risk of loan maturitites and major tenant lease expirations are casting a shadow over the sector. Roughly $27.7B of the $145B CMBS office loans Trepp tracks are set to mature by 2022. What’s more, nearly 35% of...
October 8th – Tip of the Iceberg
What I’m Reading Tip of the Iceberg: Germany will introduce new legislation giving all employees the right to work from home in the wake of the coronavirus pandemic, following Ireland, France and The Netherlands. If this trend continues, it will have negative impacts on office markets around the world. The Telegraph Time’s...
October 7th – On the March
What I’m Reading On the March: Construction costs have continued to increase, despite a plunge in GDP, throwing up another hurdle in an already challenging development environment. Bisnow Spread Out: Research from Trepp and Compstak found that the spread between starting rents and effective rents has increased 27% in major metro office markets,...
October 6th – Wipeout
What I’m Reading Wipeout: Los Angeles office leasing has ground to a near-halt, down 61% year-over-year. Commercial Observer Breaking Point: With studios moving blockbuster releases back to 2021, movie theaters are among the many businesses that do not have a clear path to recovery. CNBC Resilient: Back when the pandemic shutdowns began, dire predictions of...
October 5th – The Empire Strikes Back
What I’m Reading The Empire Strikes Back: Despite a persistent narrative about California being a net COVID loser, the metros with the largest apartment rent increases in the 3rd Quarter of 2020 were Riverside and San Bernardino Counties, according to RealPage, Inc’s quarterly report on effective asking rents. California’s denser and...
October 2nd – Headache
What I’m Reading Headache: Percentage rents are likely to have staying power for retailers even after the pandemic subsides. However, As omnichannel sales strategies grow more popular, the breakdown between online and brick-and-mortar stores is becoming blurry, making it difficult to establish what sales should be included in the percentage rent...
October 1st – Cashing Out
What I’m Reading Cashing Out: A new report by Trepp indicates an opportunity for homeowners to use sale-leaseback structures to pull equity out of their homes without having to move. This would allow equity-rich but cash-poor home owners who have been hit by the pandemic-induced recession a way to avoid foreclosure...
September 30th – Misleading
I’m back! Spent the last week RV camping on California’s Central Coast. It was a lot of fun but good to be back in the saddle. What I’m Reading Misleading Metrics: The article from my interview with Globe Street’s Erika Morphy about sponsor overreliance on cash on cash returns as a...
September 21st – Still Flowing
One Big Thing Still Flowing: CMBS originators and debt funds have pulled back during the pandemic. However, the real estate capital markets have largely continued to function, thus far avoiding the near-complete shutdown experienced during the Great Financial Crisis and preventing a major crash in valuations. Real Clear Analytics This brings to mind...
September 17th – Aaaand Scene
What I’m Reading Aaaaand Scene: The cameras are rolling and Hollywood’s film industry is slowly coming back to work, That is bringing intense demand for studio space, new interest from investors and higher rental rates. Commercial Observer Losing Hope: As the pandemic recession continues, many small and midsize U.S. banks find themselves buried...