A Land Advisors Company
What I’m Reading Storm Clouds: Loans and leases can only be restructured for so long before they result in defaults, which will in turn trigger litigation. As the COVID-induced recession wears on, it becomes more likely that we will see a wave commercial real estate litigation. However, the courts were largely understaffed before the pandemic and […]
What I’m Reading Shrinkage: A newly-released survey by KPMG found that 68% of large company CEOs plan to decrease their office footprint. Six months in to the pandemic, it appears as though office tenants are doing just that, with JP Morgan and Ford – two non-tech giants – recently announcing that employees will be able […]
What I’m Reading Pending Surge? July’s new home sales report of 901,000 annualized is the highest reading since December 2006. It is also in line with peak home sales in all periods prior to the 2000s housing bubble. Housing prices typically lag sales, meaning that an uptick in home price inflation could be right around […]
What I’m Reading Big Short Redux: Some hedge funds have made a killing this year by shorting CMBS series with a high concentration of mall debt. Downward Trend: NMHC’s Rent Payment Tracker continued its downward trajectory in August, with collections off over 200 basis points from last year. That being said, it still hasn’t yet […]
What I’m Reading Short Term: The pandemic fallout has accelerated the trend towards shorter term office leases. This will have a negative impact on valuations thanks to the large capital cost associated with re-tenanting space. However, there will be some offset since it will also allow office landlords to raise rents quicker when the economy […]
One Big Thing Over the weekend, I was catching up on some light reading and came across this gem from Green Street‘s property insights report about Urban Flight from August 19th about the stickiness of trends: The path that Covid takes from here is unknowable. The longer it lasts, the greaterthe shift to the suburbs […]
What I’m Reading On the Sidelines: Typically, a dramatic fall in the value of the US dollar – like the one we have recently experienced – would lead to a commercial real estate buying frenzy from foreign investors with stronger currencies. However, foreign investors are skittish about the U.S. economy and how CRE is going to […]
What I’m Reading Loaded Up: Large commercial real estate investors are building huge war chests with an eye towards eventual distressed opportunities that may eventually result from the pandemic fallout. Behind the Curve: About six percent of new single family homes are purpose-built rentals, or around 700,000 homes a year. However, a new RCLCO report […]
What I’m Reading Bad Timing: Updated Current Expected Credit Losses (CECL) rules went into effect earlier this year for banks. These updated rules were intended to provide a bigger backstop against losses by requiring lenders using generally accepted accounting principles (GAAP) to calculate and recognize risk of potential losses at the time of origination. In […]
What I’m Reading Hail Mary: A growing number of tenants are making “Frustration of Purpose” arguments in a bid to get out of leases when they can’t operate their businesses as initially envisioned. This is admittedly a long shot as courts have traditionally been reluctant to tear up contracts between two sophisticated parties. However, desperate […]