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 22nd – The Long View on Politics and CRE Investment Performance
What I’m Reading The Long View: Despite the typical election year rhetoric, a historic analysis of commercial real estate done by Cushman and Wakefield shows that the asset class tends to perform well under both Democrat and Republican administrations. To be clear, individual sectors or strategies can absolutely be impacted by...
October 21st – Low Hanging Fruit: the Confluence of ESG and Work From Home
One Big Thing Over the past few decades a battle has been raging over office layouts. Office tenants have been reducing the amount of space available for each employee for years, going from large private offices to small private offices to cubicles and eventually open office plans / hot desk...
October 20th – Out of Date
What I’m Reading Out of Date: According to JLL, 78% of all cold storage warehouses are at least 20 years old and the average age of a US cold storage facility is 42 years old. This is a problem in an industry where the technology has changed so dramatically in recent...
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 16th – In the Blocks
What I’m Reading In the Blocks: Conditions are perfect for distressed debt funds – which usually perform well during certain economic conditions, including when monetary conditions have been dramatically eased and when high-yield debt issuance is high. This according to a report on crisis-era distressed debt returns by Julian Falcioni at...
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 13th – Mind the Gap
One Big Thing Over the past couple of months, it has become fairly obvious that another round of support will not be forthcoming from the federal government – at least not until after the election. Given our recent economic struggles, conventional wisdom dictates that this sort of news would send...
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...