What I'm Reading Mean Reversion: Americans have returned to their pre-pandemic consumption habits with spending on gyms, concerts and recreational travel up substantially. At the same time, pandemic darlings like Peloton, Netflix and Instacart have underperformed. Wall Street Journal My take: a lot of this is mean reversion. Americans were...
April 19th – Mean Reversion
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 8th – Buyer’s Remorse?
What I'm Reading Buyer's Remorse? RV sales surged during the pandemic. Some new owners are finding vehicle upkeep to be more than they bargained for. USA Today $6 gasoline is only going to add to the buyer's remorse. This is a perfect illustration of why I've been far more bullish...
March 2nd – Paved Paradise
What I'm Reading Land Rush: The imminent rise of self driving trucks will fuel even more demand for outdoor industrial storage. (h/t Scott Ramser) Wall Street Journal IMO, this previously overlooked space is about to become a darling of the CRE investment world. Why? Demand will continue to increase due...
February 16th – Got Ya Covered
What I'm Reading Got You Covered: As commercial real estate lenders and investors eye new yield opportunities, the industrial outdoor storage (IOS) sector has emerged as an asset class with large-scale, long-term growth potential. Commercial Observer The Big Short: Wall Street investment firms are buying up more vacation homes, aiming...
February 11th – Coming in Hot
What I'm Reading Coming in Hot: YoY inflation is now 7.5%, the highest rate since 1982. As expected OER, which tends to be sticky turned sharply higher. This seals the deal for a 25 basis point increase at the Fed's March meeting. It also increases the odds of a 50...
February 8th – Fire Sale
What I'm Reading Fire Sale: Retail rents are plunging in Manhattan as a lack of office workers makes businesses less viable. On the positive side, falling rates and aggressive concessions have led to falling availability as tenants snap up prime locations at a discount. Bloomberg Decelerating: CoreLogic is projecting that...
January 27th – Risky Business
What I'm Reading Risky Business: With interest rates rising, and property prices at all time highs, Canadian homeowners are increasingly turning to variable rate mortgages as a lower cost alternative. Variable rate mortgages, which offer a substantially lower initial payment now make up over half of all new home loans...
January 6th – The Long Game
What I'm Reading The Long Game: Private equity companies are transitioning their business models towards perpetual capital vehicles, and it is creating a lot of buying power in real estate. Globe Street IMO, this will be a particularly strong tailwind for assets with lower capex requirements like self storage (including...