Landmark Links August 2nd – Flying Blind

Quick programming note – No links next week as I’m going to be taking a much-needed week off.

Must Read: The Family Office Real Estate Magazine recently published a survey that found that family offices are deficient when it comes to commercial real estate due diligence, leading to a lack of investment knowledge and a lack of control if/when things go sideways.  This is one of those issues that no one notices in an upward trending market.  However, as Warren Buffett famously said, “only when the tide goes out do you discover who has been swimming naked.”


Getting Out in Front: The Fed anticipated inflationary pressures when it began hiking rates in 2015.  Instead, the rest of the world has gone in the opposite direction and the breakdown of the Phillips Curve has resulted in fear of deflation and thus the need to cut.

Delusional: American state and local pensions have less than 73% of the assets they need to fund future obligations to public workers. To make matters worse, that depressing number is based on rosy assumptions about future returns that are highly unlikely to come to fruition and are largely based upon much higher historical fixed income yields.  If reasonable return expectations are used, the situation looks substantially worse.

Cut: The federal reserve cut short term interest rates by 25 basis points this week, their first such action since 2008.  See Also: How the ECB’s policy decisions have forced the Fed’s hand.


Starting Point: Whole Foods is the beginning, not the end of Amazon’s grocery ambitions and the next step for the ecommerce giant could be far more substantial than their purchase of the organic grocer a couple of years ago.

Need Somewhere to Put It: The abundance of capital in the market is driving strong office investment activity, not because office buildings are a particularly desirable commercial real estate asset class but rather because they are an efficient place to invest a large amount of capital.

Hopping On Board: A growing number of real estate owners are turning to esports arcades, lounges and even stadiums, hoping to breathe fresh life into their malls, hotels and other properties.


Demonized: Developer has become a four letter word in many cities thanks to efforts by NIMBYs to ensure that nothing gets built and misconceptions about land and development economics.  However, there is no viable way out of the current housing shortage where developers are not part of the solution.

Stuck: Many young adults are priced out of the housing market, which could reshape their finances – and the economy – for years to come.

Storm Chasers: Risk-taking investors are increasingly buying properties damaged in hurricanes, fires and floods and flip them for profit.

On The Rise: As interest rates have dropped, refinancing is booming again, giving mortgage lenders a much-needed boost after a slow year.


Perverse Incentives: Expensive regulation and high demand across the country have made the illicit cannabis trade more profitable for many growers and sellers than going legit.

Hoarders: Google’s parent, Alphabet now has $117 billion in cash on its balance sheet – even more than Apple.

Chart of the Day

Deflation is beginning to show up in the building products space.

Source: JBREC


Symmetrical Response: A snake bit a man in India so the man bit the snake and killed it. (h/t Steve Sims)

Clowning Around: A man in a clown costume caused a massive food fight that resulted in significant injuries because cruises.

Rally: A surfer was bitten on the arm by a shark and went to the bar rather than the hospital to get stitches because Florida.

Urine Trouble: A woman was arrested for urinating on potatoes at Walmart because when you gotta go, you gotta go. (h/t Ty Reed)

I Thought This Was America?  A Texas man was caught with a missile launcher in his checked baggage at BWI airport.  I had been under the impression that this sort of thing wasn’t illegal, but merely frowned upon.  Turns out that I was wrong.

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

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