One Big Thing Its no secret that office landlords – especially those in expensive coastal markets – are struggling. Vornado Realty Trust (VNO) is one of the worst positioned for the post-pandemic world with the vast majority of its holdings in NYC. Vornado’s recent earnings sucked – and missed already-low...
October 27th – Stepping Down
What I’m Reading Stepping Down: One of the cornerstones of former VP Joe Biden’s tax plan is eliminating the inheritance of property at a stepped up basis. This could have substantial value implications for commercial real estate – especially if the eventual plan classifies death as an immediately taxable event –...
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October 20th – Out of Date
What I’m Reading Out of Date: According to JLL, 78% of all cold storage warehouses are at least 20 years old and the average age of a US cold storage facility is 42 years old.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 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...