What I’m Reading Pile Up: Corporate tenants put a record 42 million square feet of space on the office market in the second and third quarters, according to data firm CoStar Group Inc. That increased the total sublease space in the U.S. to roughly 157 million square feet, or 1.7% of...
November 9th – Thou Dost Protest Too Much
One Big Thing Its no secret that office landlords – especially those in expensive coastal markets – are struggling. Vornado Realty Trust (VNO) is one of the worst positioned for the post-pandemic world with the vast majority of its holdings in NYC. Vornado’s recent earnings sucked – and missed already-low...
November 3rd – Bounce Back
What I’m Reading Bounce Back: Apartment demand rebounded strongly in the third quarter outside of high-priced gateway markets. The rebound helped to stabilize the multifamily market and prevented asking rents from declining as much as would have been expected considering the historic decline in economic performance in the second quarter. Yardi...
November 2nd – Lifeline
What I’m Reading One Big Thing: A couple of weeks ago, I wrote about how ESG trends are likely to provide a growing headwind for the office market in the coming years. Today, I’m going to focus on a different segment of the real estate market that I’ve followed closely for years: housing....
October 23rd – Walking Away
What I’m Reading Walking Away: Trepp researchers parsed special servicer notes on distressed real estate backed by CMBS loans and found a substantial number of borrowers are willing to give assets back to lenders if defaults aren’t cured. As you can probably imagine, most of these are in the hotel and...
October 19th – Color Me Skeptical
One Big Thing A Barclay’s analyst went on CNBC last week and made the claim that converting an underperforming mall to a distribution center or residential complex could reduce the value of the property anywhere from 60% to 90%. While I believe this would be the case if a top...
October 15th – Permanent Vacation
What I’m Reading Permanent Vacation: Vacation home demand is soaring during the pandemic as people with means look for places to escape to now that they can’t travel abroad. Wall Street Journal See Also: Park City, Utah’s housing market is white hot as wealthy buyers pile in, pushing median home prices above $2MM. The Salt...
October 14th – No Shock Here
What I’m Reading No Shock Here: Transactional volume has fallen sharply, but refinancing activity is keeping the capital markets moving through the pandemic. This is a best-case scenario for a sharp downturn since it means that there is still ample liquidity for performing assets that require recapitalization due to loan maturity. ...
October 12th – Hanging On
What I’m Reading Hanging in There: After showing signs of deterioration when enhanced UI ended, the NMHC Rent Payment Tracker is – remarkably – at exactly the same level that it was at in 2019 for the first week of October. NMHC The Great Divide: Pricing expectations between sellers and buyers have continued...
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...