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 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...
October 9th – Long Shadows
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 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 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 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...