Quote of the Day…..”It’s better to shit your pants than die of constipation” – Confucius referring to whether or not homebuyers will come through this spring as many analysts project.
Multi-Family: Yet another in a list of many factors making rents (somewhat) less affordable: Airbnb.
Office: Office has become a landlord’s market and tech-heavy cities are leading the way while energy-heavy cities lag. See also: the world is in the middle of a skyscraper boom….which may not be a good sign of things to come.
Land: Must read link of the day- The Paradox of Soil: Land was the center of the pre-industrial economy. As technology advanced, land availability became less and less of a constraint to GDP Growth. That has changed. Today, the accelerating value of land in certain highly desirable locations that have heavy land use restrictions is again becoming a drag on GDP.
JBREC – you can tell a lot about land values by paying attention to who the land sellers are.
REITs: Bailing the sinking ship: Sears, arguably America’s foremost crappy retailer has just formed a REIT to acquire 254 of it’s own properties in an effort to raise $2.5MM to offset its seemingly continuous losses.
Funds: The Blackstone fundraising juggernaut continues to roll, raising another $14.5 billion for a new fund.
Scarcity is the word of the day
LA is more unaffordable than every regardless of whether you rent or buy. Orange County isn’t much better and isn’t building nearly enough new homes. However, it’s going to be difficult to build more with mandatory water restrictions.
The rest of the country (or at least places where people want to move) isn’t in much better shape as the continued decline in inventory doesn’t bode well for affordability.
See also: The Millionaire Next Door might now reside in a 2 bedroom shack. $1MM certainly doesn’t buy what it used to in California.
Renegades of Junk: Before Drexel Burnham Lambert was a third tier investment bank before Michael Miliken joined. 25 years after it’s fall, several key Drexel team members look back on how the firm altered the landscape of finance for ever.
Don’t look now but the Chicago Cubs are suddenly being run like a real baseball team and have a plan to escape their more-than-a-century of futility.
With Bay Area property rising, Facebook is now turning to an old-school solution that Robber Barons would have loved to keep their people closer to home: the company town.
Chart of the Day
Residential property value by county: click on the link below for great interactive display:
Source: The Economist
There are only two places on earth where this could happen. One is Florida. The other is Germany.
When it’s my time to go, I only ask for one thing: that it’s not the result of a “traumatic rectal injury” like Oil heir Andrew Getty.
Landmark Links – A candid look at the economy, real estate, and other things sometimes related.