What I'm Reading SALT in the Wound: The Supreme Court rejected a challenge to the SALT deduction cap from the 2017 Trump tax bill. Looks like the $10k cap is here to stay, at least until it sunsets in 2025. Commercial Observer Streamline: A new California bill - AB2234 -...
April 27th – Hitting the Wall
What I'm Reading Hitting the Wall: Trucking demand is “near freight recession levels,” according to Bank of America. Shippers’ outlook on rates, capacity and inventory levels are matching attitudes not seen since May and June 2020, when pandemic lockdowns sent freight volumes into a historic decline. Freight Waves Halted: Ships...
April 25th – Warning Sign
What I'm Reading Warning Sign: China's property market accounts for a massive % of global commodity consumption. Chinese housing starts have now fallen 17% or more for three consecutive quarters. Looks like a commodity downturn could be in the cards. Financial Times Mean Reversion: Soaring mortgage rates have resulted in...
April 19th – Mean Reversion
April 7th – Rise of the Machines
What I'm Reading Rise of the Machines: Drone companies, often backed by massive ecommerce platforms, have been cleared to expand their operations across the U.S. The technology has become faster and more reliable with development. The big question is whether or not it will result in mass adoption. Wall Street...
April 5th – Backslide
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...
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 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...