News

Landmark Links November 8th – WeBail

Must Read: SoftBank’s WeWork strategy consists mainly of holding on to top locations and shut down others. This is likely to leave a lot of landlords – many of which provided incentives like free rent and significant TI allowances – who leased to an SPE without a corporate guarantee from WeWork’s parent company out in the cold.  It could also flood markets with vacant space, ultimately reducing rents. See Also: After the SoftBank bailout, landlords say that they’re ready if WeWork starts giving back spaceAnd: SoftBank’s Masayoshi Son said in a recent speech that turning around WeWork would be “simple” and characterized its bailout of the flailing co-working company as a way to buy in at a cheaper valuation.  I’m beginning to suspect that he may be a few fries short of a Happy Meal.

Economy

Imagine That: A new working paper from NBER found that billionaires’ geographical location is appears to be highly sensitive to state estate taxes.

Supply and Demand: One of the often-overlooked aspects of our long stock market rally is that the number of publicly traded companies has dropped by about half over the past 20 years.

More From Less?  Microsoft Japan gave its workers a four day work week this past summer and found that it boosted productivity by 40%.

Commercial

Clash of the Titans: In a world where Amazon, Walmart and other retailers are pushing for greater speed, more choices and more convenience, industry heavyweights Prologis and Blackstone – who collectively control 10% of the US logistics market – are going all in to maximize efficiency in their warehouse portfolios.

Limited Options: With cannabis stocks down nearly 60% from their highs in March, producers that previously relied on issuing shares have resorted to selling off their real estate to investors and leasing it back in order to raise capital.  This has opened a major opportunity for REITS.

Residential

Fading Away: Home equity lines of credit were once a popular vehicle for financing everything from renovations to college debt.  Today, they are being used less and less, even as record levels of home equity build up.  This has slashed a once-lucrative source of revenue for the nation’s largest banks, as consumers have remained conservative about leveraging up their homes a decade after the housing bubble burst.

Now Comes The Hard Part: Apple, Google and Facebook have committed $4.5 billion to develop housing in Silicon Valley.  Now they have to figure out how to make that massive sum actually lead to more approvals in the NIMBY-dominated region.

Fuel on the Fire: Recent wildfires have only heightened the stakes for California, which still isn’t building anywhere close to enough homes and has been unable to pass serious legislation that would help solve the problem.

Profiles

Game Changer: Engineers at Penn State have figured out a way to fully charge electric car batteries in 10 minutes by using higher temperature.

This Will End In Tears: Lending startups are looking to get in the business of lending to influencers to help them build their personal brands:

Banks won’t underwrite an individual based on qualifications like their Instagram following, of course, and given that influencers don’t typically have a consistent income or a W2 statement to showcase their earnings, they may not be able to receive a bank loan to invest in their own brand. Imagine receiving a loan based on the size of your TikTok or YouTube following? Karat and other new startups focused on monetization could accelerate an influencer’s path to entrepreneurship.

GOAT: For a guy who ultimately compiled an investment record that would put the likes of Warren Buffett, George Soros and Ray Dalio to shame, things did not initially come easy to former NSA code breaker and mathematician Jim Simons when he founded Renaissance Technologies in the late 1970s. Side note: I can’t wait to read The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution.

Ground Zero: As Reno seeks to re-brand itself from burnt out casino town to Silicon Valley offshoot, a high stakes battle is raging over its strip clubs.

Chart of the Day

Who says that low interest rates (which lead to low mortgage rates) hurt the middle class?  While

Median home prices are up almost 400% since 1980 while monthly payments based on prevailing interest rates are only up 94%. This is even more pronounced this century when you consider median home prices are up more than 33% since 2005 while the monthly payment is up just 7% or $100/month.

Source: A Wealth of Common Sense

WTF

Shocking if True: A new study (that someone actually paid for) found that people are more likely to lie when they think it will result in them getting laid.

Joy Ride: A Louisiana man stole an electric shopping cart from Walmart and drove it to a bar in order to avoid getting a DUI.

Finger Lickin’ Good: The new Popeyes chicken sandwich has claimed its first victim as a line cutting feud led to a fatal stabbing in Maryland.

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

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