Landmark Links February 21st – Alternative Lifestyle

Must Read: Alternative lenders have emerged as a force to be reckoned with in the commercial real estate world and, after years of rapid growth have overtaken banks in terms of non-agency market share.


Slowdown: GDP estimates for the first quarter of 2020 are falling.

Anecdotal? Despite a lot of posturing, there still isn’t any real proof whether the SALT cap is driving away residents of high-tax states or not given that 1) those states were already losing residents when the SALT cap was instituted; and 2) given the recency of the cap, the sample size is still very small.

Topped Out?  New data from the Federal Reserve Bank of New York shows that student loan debt has just about stopped growing, likely in part to a tighter labor market.


Sky’s the Limit: Cell towers have become one of the hottest plays in real estate thanks to increased data transmission, 5G network roll-out and the promise of self driving cars.  However, the barriers to entry are steep and most of the gains will likely be had by three massive REITs that collectively own around two-thirds of the bigger towers in the US.

A Move in the Wrong Direction: San Francisco has a proposition on its ballot that, if passed would reduce the amount of office space the city can approve each year by a percentage equal to the city’s affordable housing shortfall. That shortfall is based on a state-mandated goal of building at least 2,042 homes per year. The measure would almost certainly cut office growth, because the city has built an average of 712 affordable units a year in the past decade.  This is a great idea if you want to kill economic growth, push up office rents and reduce affordable housing fees and property taxes that office developments generate.  Otherwise, it sucks.

Overbuilt: More New York City hotel owners are defaulting on their mortgages, succumbing to a crush of new supply and rising expenses. (h/t Steve Sims).  Even considering that prior sentence, this is shocking given where we are in the economic cycle:

Colony Credit Real Estate Inc. recently hired a brokerage firm to sell the mortgage on the 1,331-room Row Hotel near Times Square at a loss, according to people familiar with the matter. Colony Credit said in a 2018 public filing that the loan package had a principal balance of $260.2 million.

The loan could now sell for as little as $50 million, say people familiar with the matter.


The Most Important Thing: In California, development bills have come into vogue but nothing will get built so long as local NIMBYs hold all of the real power.


Trouble on the Horizon: Fake marks, unrealistic expectations and a lot of incentive to ignore reality in the hope of bluffing your way into an IPO have become the hallmarks of VC insanity.  Private equity is suffering from many of the same delusions.

Changing Sentiment: Of all his accomplishments, perhaps the most important thing that Elon Musk has done is to completely change perceptions about electric cars.

Saturated: The biggest food-delivery companies in the U.S. are seeking to shore up their finances through mergers or public listings, according to executives in an industry that has generated rapid growth but spotty profits.

Chart of the Day

Source: Goldman Sachs


Is That a Steak in Your Pants? A suspected shoplifter tried to escape police by stripping naked as ribeye steaks fell out of his pants because Florida.

Apparently Not: An Indiana man with a “Crime Pays” tattoo on his forehead was arrested after a police chase.

Crossover Appeal: Since absolutely no one asked for it, Crocs has joined forces with KFC to create a shoe that’s covered in fried chicken with a charm that smells like it too.

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

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