Landmark Links July 9th – Outside the Box

What I’m Reading

Outside the Box: In most distressed investing opportunities, the holding period is relatively short term – buy an asset that is underperforming at an attractive price, bring in fresh capital, lease it up at market rents and then sell.  Converting dying malls to another use can take a decade (or more) thanks to entitlement challenges, which makes it a tough fit for distressed investors accustomed to seeing a relatively quick turn of their capital.

Split: Debt funds that maintained balance sheet discipline in an incredibly competitive environment prior to the pandemic have largely continued lending through the crisis.  Those that binged on back-leverage as a way to enhance decreasing yields have not.

The Waiting Game: Great quote from Yieldstreet’s Senior Director of Real Estate Mitch Rosen in Globe Street yesterday about the difference in how distress surfaces in public and private markets:

“I think people don’t realize how long the workout process is in commercial real estate,” Rosen says. “With the public markets, you can drop 40 percent [of value] in three weeks, but real estate doesn’t work that way. The peaks and troughs are far longer in duration, and the distance between them is also much longer. I think the impact of what we see now is not going to be felt for six to nine months out, at least.”

No End in Sight: CMBS delinquencies continued their spike in June with retail and hospitality assets unsurprisingly leading the way.

Tangled Web: Domestic road trips were supposed to be the ticket for a relaxing vacation this summer.  However, inconsistent rules about testing an quarantines – and enforcement – from state to state have created confusion among travelers.  

Chart of the Day

Low income consumers, who typically spend less on discretionary items, is back to pre-COVID levels.

SourceHugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital


Star Crossed Lovers: A man driving a stolen car crashed into a woman driving another stolen car in Oregon.

Wiped: A woman was arrested for domestic battery after getting into a physical altercation with her live-in boyfriend over toilet paper because Florida.

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

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