News

Landmark Links June 4th – Stupid is as Stupid Does

Must Read: Most of the housing-friendly California bills that had been proposed died in committee this legislative session.  However, a bill to cap rent increases state-wide is advancing in the State Legislature because, apparently the best way to reign in out-of-control housing costs in the midst of an epic shortage is to ensure that almost nothing ever gets built (if you’re a California politician).

Economy

Can’t Quit You: Negative interest rates were supposed to be a short-term jolt for European economies.  However, their central banks haven’t been able to wean the eurozone off cheap money, which distorts economies and leaves little ammunition to cushion a downturn.

Stacked Deck: Big banks have cut back on lending to small businesses over the past decade, leaving them few choices but to turn to alternative lenders that charge significantly higher rates and credit cards.

Against the Grain: A lot of pundits have claimed that the Chinese (and now Mexican) trade wars would be inflationary.  However, the bond market is telling us that they are a deflationary force.

Commercial

Balancing Out: Deloitte Center for Financial Services sees the white-hot market for US warehouse space cooling down over the next three years as new construction outpaces demand growth, allowing capacity to eventually catch up to demandBut See:  Despite strong demand from tenants, industrial investment sales have slowed down recently thanks to an environment where seemingly everyone wants to buy and no one wants to sell.

New Blood: Shopping center landlords are looking to healthcare tenants for longer leases and daytime traffic as the mixed-use-ization of retail continues.

Downward Trend: A new wave of completed projects and oversupplied markets put pressure on self storage rents, which have dropped 1.7 percent on a national level.

Residential

Headed for the Exits: Private equity giant Blackstone has started to cash out of its rental home empire as shares of its Invitation Homes stock trade at near-record levels.

Rebound: The apartment rental market is gaining steam again, at least partially thanks to the slowdown in for-sale housing late last year and early this year while household formation continues.  As a result, concessions are largely going away.

Round Trip: 30-year mortgage rates are back below 4% again. as long-term yields continue their downward trajectory.  The outlook for mortgage lenders is definitely getting better.

Profiles

Clown Show: It’s amazing how the Lakers went from the crown jewel of the NBA to the Kardashians of the NBA in a few short years.  This ESPN feature article pulls no punches and everyone in the organization comes off looking both incompetent and awful.

Failed Effort: Big tech wanted to dethrone credit cards.  It failed and now MasterCard and Visa are stronger than ever.

Beyond Belief: Beyond Meat’s stock price is soaring but there is no real evidence that its products are healthier than real meat according to a former US agriculture chief.  So take that, vegans.

Chart of the Day

This is remarkable.

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Sources: AEI International Center on Housing Risk, John Burns Real Estate Consulting

WTF

Extracurricular Activities: A Catholic school principal was arrested for being publicly intoxicated and refusing to pay his bill at a strip club while chaperoning a school trip to Washington DC.  He had his service dog with him as well for good measure.

One Buck Chuck: Alcohol will now be sold at 1,000 Family Dollar stores which is either the best idea or the worst idea of all time. (h/t Kai Cox)

Uninvited Guest: An 11 foot alligator broke into a condo and tore up a kitchen because Florida.

Landmark Links – A candid look at the economy, real estate, and other things sometimes related.

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