What I'm Reading Perfect Storm: Supply chains are experiencing a massive bullwhip from the COVID economy and have resulted in a build up in inventory levels. At the same time, a slowdown in consumer spending caused by inflation could result in a recession. Freight Waves IMO, consumer discounts are coming....
June 22nd – Make it Rain
What I'm Reading Make it Rain: An LA Times review of state data found that it routinely costs more than $1m per unit to build a subsidized affordable housing unit in California. Between prevailing wage requirements, high material and regulatory costs, the process has become so bloated with corruption and...
June 21st – Help Wanted
What I'm Reading Help Wanted: Construction projects across the U.S. are running short on labor just as $1 trillion in federal infrastructure money starts to kick in. Contractors are responding by offering benefits ranging from signing bonuses to housing allowances to attract and retain workers. Wall Street Journal Drying Up? Over...
June 20th – Domino Effect
What I'm Reading Domino Effect: Higher mortgage rates and a slowing housing market will help slow inflation today. However, it will also lead to less home building and layoffs across the housing industry ranging from builders to lenders and everything in between. As a result, a slowdown today likely makes...
June 16th – The Hangover
What I'm Reading The Hangover: California has a near-$100 billion budget surplus thanks to booming asset prices leading to a capital gains windfall. As usual, politicians in Sacramento are fighting over how to spend the money quickly by establishing new social programs or funding large one-time expenditures. However, with asset...
June 15th – Tapping the Brakes
What I'm Reading Tapping the Brakes: From construction cost increases, to higher interest rates and rate cap costs and slowing sales, inflation is taking a toll on the CRE industry. Globe Street My guess? We are about to see a substantial slowdown in new development as the cost of capital...
June 14th – Taking the Plunge
What I'm Reading Jumping In: Big landlords are increasingly getting into the homebuilding business as demand for single-family rentals continues to surge. CNBC This is exactly what one should expect will happen given that the monthly cost of home ownership has doubled since January 2021. Priced Out: The cost of...
June 13th – Shedding SZN
What I'm Reading Shedding SZN: The popular narrative in the warehouse space is that Amazon has a glut of warehouse space and is looking to dump it via sublease. A closer look at Amazon’s plans to sublet warehouse space show that it is largely looking to shed traditional, mid-market warehouses...
June 9th – How Low Can You Go?
What I'm Reading How Low Can You Go? The MBA's Market Composite Index, which includes purchase and refinance applications, fell 6.5% on a seasonally adjusted basis to 288.4, compared to 645.4 one year ago. That's the lowest level in 22 years. Reuters What a brutal time to be in the...
June 6th – Pick Your Poison
What I'm Reading Leveling Off: Rent is still increasing sharply YoY but the pace is slowing somewhat. Calculated Risk Trade Off: Just-in-time inventory management substantially reduced the risk of inventory cycle recessions where over-ordering leads to a glut. In the post-pandemic world, companies are increasingly opting for a just-in-case model...