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 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 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 25th – Pendulum Swinging
What I'm Reading Pendulum Swinging: Geopolitical stability and improvements in transportation and communications in recent decades allowed companies and countries to opt for what seemed to be the cheapest and easiest supply chain solutions rather than the most secure. Recent world events have revealed the risks of opting for inexpensive...
March 23rd – Booming Boomers
What I'm Reading Booming Boomers: Covid-19 kept many older Americans on the sidelines of the recovery in consumer spending as they held back from in-person services like dining and travel despite seeing their wealth increase dramatically. But their spending is picking up as the Omicron wave recedes, and analysts say...
March 18th – Taking Flight
What I'm Reading Taking Flight: The message from the Federal Reserve earlier this week was extremely hawkish, forecasting aggressive rate hikes. That being said, the yield curve is now essentially flat (the 5y-30y US OIS curve went negative) and Fed Funds futures are projecting a rate cut in 2024. The...
March 11th – Coming in Hot
What I'm Reading Coming in Hot: RV and boat storage remains in incredibly high demand. In 2021, consumers visiting Self Storage facilities websites managed by StoragePug were seeking out boat and RV parking at a whopping 250% higher rate than they did in 2020. (h/t Scott Ramser) Radius+ Combine this with...
March 10th – Riding the Wave
What I'm Reading Riding the Wave: Industrial supply is not likely to catch up with demand anytime soon, even as developers ramp up new construction. As a result, both rent and property values should continue to surge. Globe Street Much like what the market experienced during the pandemic, I expect...
March 9th – In the Cold
What I'm Reading In the Cold: US real estate investors like Hines and Morgan Stanley have ridden out ruble devaluations, financial crises and the economic sanctions that followed Russia’s 2014 annexation of Crimea to chalk up positive returns on their Russian real estate portfolios. Now they are facing calls to...