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Luongo: Eviction Is Just Another Word For Extinction

Luongo: Eviction Is Just Another Word For Extinction

Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

The Federal Moratorium on evictions is ending at the end of the month. Like last month, it could always be extended again.

It will…

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Luongo: Eviction Is Just Another Word For Extinction

Authored by Tom Luongo via Gold, Goats, 'n Guns blog,

The Federal Moratorium on evictions is ending at the end of the month. Like last month, it could always be extended again.

It will be extended until the most opportune moment to do the most damage to the economy. Why? Vandals are in charge in D.C.

This was always a misguided program but was an integral part of destroying the relationship between lender and lendee, renter and landlord. The government comes in all humanitarian-like to suspend payments on FHA-backed mortgages, which are all of them post-Lehman Bros., after locking people in their homes for a year while blocking access to therapeutics which would have mitigated the worst of COVID-19’s effects on the society.

We know this now. Vaccination is patriotic. Stay home on the dole wearing a mask during sex for the greater good. If not, you’re a COVIDiot.

But, let’s leave all that aside for a minute. People have been terrorized and many of them are still not thinking straight, regardless of why and how they were driven to that state.

Moreover, I’ll stay away (for once) about any conspiracy surrounding this issue. Because the argument actually works better if we don’t go there. Let’s assume the intentions of people we know to be liars had the best of intentions and run the scenario in housing out.

So, while interrupting the normal ebb and flow of capital because of extreme circumstances may have felt like the right thing to do, the consequences of that policy are wholly predictable given the deplorable state of our politics. Again, even without any personal accusations of malice by individuals in decision-making positions, we still arrive at the outcome we have today.

Everyone on both sides of the residential debt divide is staring at a step-function reset of their cash flow when the eviction moratorium ends and that step-function will be a doozy, down.

Then when you think through what it is that Davos is trying to do with the Great Reset, which they have stated forthrightly, it is very clear why this moratorium has been extended until this summer, far beyond when it should have been.

And it has nothing to do with trying to keep Joe Biden’s poll numbers from collapsing by buying the votes of renters.

It has a lot to do with forcing both landlords and debtors into bankruptcy simultaneously, and do so when the bulk of the next round of government spending can be doled out to those closest to the Washington laundromat.

Martin Armstrong is right to bring up this issue but I don’t believe he’s thought through the full effect of the policy:

Those in power are just incompetent of ever managing the economy. Once they stuck their foot in the door, if they take it out and there is a wave of foreclosures, they will be to blame. So what do they do then? Put the foot back in the door and suspend all mortgages because they have an election in 2022?

Assuming incompetence over malice isn’t a bad rule of thumb when it comes to certain things.  But in the case of a bunch of dirty European commie oligarchs trying to take over the world, bankrupting the middle class is their raison d’etre.

The play here is simple, convince everyone to stay put and look like the hero to the little guy by suspending mortgage payments for more than a year. This helps get Biden inaugurated president.  Then keep the bogeyman of variants of COVID going well past any reasonable person’s patience until the economy has endured maximal pain, bankrupting hundreds of thousands of landlords and assisting the cocking up of the labor market subsidizing sloth through extending unemployment benefits and stimulus checks.

Why do you think they are rolling out your Child Tax Credit as a monthly support payment? Magnanimity?

Once you can’t hold back the “stay in your homes until XXX” narrative anymore you lift the moratorium. Since a lot of small businesses are gone most of the jobs available are McJobs. Even with a labor shortage forcing entry level wages higher that isn’t enough to cover the mortgage payment of a 3/2 in the ‘burbs.  

To give you an idea of how bad it is local restaurants are closed on both Sundays and Mondays here in my neck of the woods because they explicitly can’t get anyone to come to work. McDonald’s are begging people for cashier’s jobs at $12/hour.  In Florida.  Right-to-work.  $12 to jockey a register.  Madness.

There is little to no incentive to go back to work for even $12/hour when the government will pay you more than 2/3rds of that to stay at home. If it’s bad in Florida where unemployment benefits are less than enough to starve on, you can imagine what it looks like in more enlightened states like New York.

Now all those people have more than a year of back payments to make, which they can’t.  The landlords need the money now to keep from being foreclosed on by the bank.  And guess who gets to swoop in and buy up all those single-family homes and apartment buildings with newly-minted USG ‘infrastructure’ spending money?

You guessed it…. Blackrock.  That story made it out into the world in April with a piece by the War Street Journal.

If you think we’ve seen the peak of Blackrock’s takeover of the economy, just wait until people have to pay their mortgages again.

You really will own nothing and like it or else.  But wait, there’s more.

Blackrock will buy those houses at pennies on the dollar. They will wipe out hundreds of billions in mortgage debt but, more importantly, they will force a massive reassessment of housing prices across the country. And, as Dexter K. White pointed out on the latest episode of my podcast, Blackrock et.al. don’t even have to buy indiscriminately to have maximal effect.

They’ll just buy up the properties in red and purple districts to flip the electoral map. Under Obama it was called zip code targeting. And it’ll be accelerating once the eviction moratorium ends sometime soon.

Who do you think they’ll move in there? Well, go ask the people in places like Minneapolis.

Even worse, because the story got too much traction by late June none other than The Atlantic was running an apologia to tell us we’re crazy to think there’s anything weird going on here. The Atlantic. The only publication more Davos than it is The Economist.

But, after debunking the idea that Blackrock becoming the country’s biggest slum lord as ludicrous, the writer Derek Thompson, tells us what the real agenda is:

How can we encourage Americans to support more housing construction near where they live? Maybe the answer is … more single-family rentals. As the Bloomberg columnist Conor Sen points out, homeowners tend to look down on nearby construction, because more ample housing could drive down the cost of their property. But renters might celebrate nearby construction for the same general principle: Ample housing might hold down their rent.

In the arithmetic of online outrage—where big banks are evil, and landlords suck—nothing is more villainous than a big-bank landlord. But the larger villain in America’s housing crunch isn’t the faceless Wall Street Goliath overseeing your apartment building or house; it’s the forces stopping any new apartment buildings or houses from existing in the first place: your neighbors, local laws, and local governments. If we can’t see the culprit of America’s housing crisis, that’s because we’re eager to look everywhere except in the mirror.

Right Derek. More rentals. Why don’t you just polish Herr Schwab’s knob on Tik-Tok while you’re at it.

Here in North Florida, after twenty years of forcing density restrictions on agricultural zoned land development to “preserve green spaces” Alachua County is now trying to get rid of single-use zoning so they can build the equivalent of Section 8 trailer parks in those same low-density zones. So, first they destroy your ability to develop the land for your benefit then they want to use Federal money to bring in refugees and “Dreamers” and create rural slums.

Because The Walking Dead is their model of the future.

And what will that do to the price of your home? You who worked through COVID, who did things right, who paid their mortgage?  Oh right, you’ll now be upside down on that place you just bought in Florida or Tennessee to get away from the lunatics in California and New York. 

Hamster meet wheel.  

This is why you get out of debt in the face of a crisis.  Don’t always assume they want endless inflation.  Deflation of specific assets is always how they consolidate power.  First they’ll make you feel rich through the boom and then they’ll take it away with an inexplicable policy error from the Fed (sound familiar?) and there’s trillions in zero-cost money to help get out from underneath all that stress.

All you have to do is embrace extreme minimalism.

The New Single Family House in the Post Great Reset America

There is no recovery story now.  There is only liquidation of the middle class and the destruction of even the veneer of civility granted by the suburbs.

Last week’s jobs report may have kernels of truth in it which point to things improving, but it won’t matter, not with oil prices headed to $90 a barrel or higher.  The next phase of the destruction of the middle class in the U.S. is well underway.   All those new cars we bought with our stimmy checks? We won’t be able to afford those either. But, hey, there’s a silver lining.  Your per child tax credit will come to you as a monthly handout to help you walk to your McJob to make ends meet thanks to a benevolent government who just broke your legs.

*  *  *

Join my Patreon if you finally get what’s going on.

Tyler Durden Wed, 07/07/2021 - 17:25

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Analyzing Capital Market Trends

As the industrial market sees some cooling from pandemic-era highs and financing tightens, what should owners and investors expect over the next 12-18…

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As the industrial market sees some cooling from pandemic-era highs and financing tightens, what should owners and investors expect over the next 12-18 months? Four national experts took the stage at I.CON West to discuss what lies ahead for this popular asset class.  

Capital Raising is Down, Cash is King 

Overall, institutional capital raising was down 30-40% in 2023. Institutional investors have been wary of open-ended funds, portfolios have been trimmed and deals are happening increasingly in cash. Considering the current lending environment, more investors prefer unlevered deals.  

“I’m always surprised how many groups out there are willing to buy all cash,” said Christy Gahr, director of capital markets, North America, Realterm. “It’s taken off over the last year, especially when the cost of debt is 6%.” 

The private equity market is active, and panelists said they see more investment coming from end users. On the debt side, banks are shying away from speculative development projects and focused on smaller transactions last year. Some investors are taking more of a “rifle shot” approach by focusing on targeted, specific projects rather than casting a wide net. There is also interest from life companies that have some liquidity to invest in stabilized industrial product in first-tier markets. 

Not Much Distress, But More Scrutiny 

PJ Charlton, chief investment officer, CenterPoint Properties, commented he wasn’t seeing much distress and certainly not at 2009 levels. However, there are motivated sellers. It is a suitable time to sell assets out of a fund due to the high leasing rates and spectacular rent growth. “Most sellers today have a reason,” said Tim Walsh, chief investment officer, Dermody, “whether it’s a balance sheet-motivated, whether it’s related to some sort of tax structuring or promises they’ve made to investors.” 

What has changed over the past 2-3 years is the approach of investment committees. “Back then it was about aggregation,” said Charlton. “It was all in on industrial… rents were growing 15% a year, cap rates are down another 50 basis points. Interest rates are 3%…  Investment committees are reading every page and scrutinizing every word now. It’s a much more discerning buyer than it was three years ago,” he said. Investment committees are focusing on projects in healthy rent growth markets such as New Jersey, Los Angeles and Miami with $50-$150 million deal ranges.  

“There is a thesis that there’s a slowdown in developments in all our markets,” said Walsh. “Everyone sees it. There are some submarkets where there weren’t any groundbreakings in the first quarter.” However, there will be an overall return to a balanced supply and demand dynamic. 

Embracing ESG 

Investors and tenants are increasingly recognizing the importance of ESG, and the panel agreed bigger credit and quality tenants tend to be more environmentally focused. Dermody has increased its environmental standards, making sure each of their building roofs can structurally support solar panels and installing piping and wiring the parking lots for electric charging. “There is a lot of noise out there when it comes to NIMBYism,” said Walsh, “And I think we need to do more to promote the modern environmentally sensitive product that we’re all building.” 

Additionally, power supply is becoming more of a concern. “Several years ago, everyone was talking about having the right amount of parking. Now the hot topic is having access to power supply,” said Charlton. Several Fortune 500 companies, including FedEx, have promised to reduce their carbon footprint quickly and that means access to electrified parking. “What we’re seeing is that parking is even more important because now you have fleets that need to be able to charge two or three times a day in last-mile distribution facilities,” said Gahr. “It will change aspects of how we invest and how we underwrite and think about what our properties need to be able to provide our users.”  

Nearshoring and Onshoring  

Jack Fraker, president and global head of industrial and logistics capital markets for Newmark, turned the discussion to what is happening near the U.S.-Mexico border and asked the panelists what they are seeing in terms of nearshoring. Gahr commented that so much has changed in a short period and cited several statistics. For example, since 2019, China alone has invested in more than 120 projects in Mexico and in over 18 million square feet of industrial space. U.S.-Mexico trade is now outpacing U.S.-China trade by more than 40%.  

“During the first half of 2023, $461 billion of goods passed through the U.S.-Mexico border, which is 44% higher than the value of goods between U.S. and China,” said Gahr. More than 150 foreign companies said in 2023 that they will open a new operation or expand into Mexico. These sectors include automotive, energy, manufacturing and IT.  

Texas cities Laredo and El Paso were identified as active border markets, and the panelists agreed the best-performing assets are going to be as close to the border as possible. In 2023, El Paso had over three million square feet in total net absorption with a market wide vacancy of less than 4%, according to CBRE. The panelists also discussed the tremendous amount of opportunity in Mexico, although many U.S. development companies have not yet chosen to invest there. Onshoring activity, such as a Samsung project in Austin, is also on the rise. 

Overall, the panel remained optimistic about investments, the economy and interest rates. Unemployment is below 4% and the economy is still growing. Additionally, the level of capital that’s sitting in money markets right now is “at $6 trillion – and that’s $2 trillion higher than it was five years ago,” according to Walsh. “So, the giant pile of money persists. And it’s available as soon as people are comfortable coming off the sidelines.” 

This post is brought to you by JLL, the social media and conference blog sponsor of NAIOP’s I.CON West 2024. Learn more about JLL at www.us.jll.com or www.jll.ca.

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Centre for Doctoral Training in Diversity in Data Visualization awarded over £9m funding from the EPSRC

Announced today, a new Centre for Doctoral Training (CDT) has been funded by a grant of over £9 million from the Engineering and Physical Sciences Research…

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Announced today, a new Centre for Doctoral Training (CDT) has been funded by a grant of over £9 million from the Engineering and Physical Sciences Research Council (EPSRC) to help train the next, diverse generation of research leaders in data visualization.

A collaboration between City, University of London and the University of Warwick, the EPSRC Centre for Doctoral Training in Diversity in Data Visualization (DIVERSE CDT) will train 60 PhD students, in cohorts of 12 students, beginning in October 2025. The set-up phase will begin in July 2024.

The funding announcement is part of a wider UK Research & Innovation (UKRI) announcement of the UK’s biggest-ever investment in engineering and physical sciences postgraduate skills, totalling more than £1 billion.

DIVERSE CDT will be supported by 19 partner organisations, including the Natural History Museum, the Ordnance Survey, and the Centre for Applied Education Research.

Data Visualization is the practice of designing, developing and evaluating representations of complex data – the kinds of data that lie at the heart of every organization – to enable more people to make real-world use of a source of information which is otherwise challenging to access.

Data visualization can be used to synthesise complex data into a clear story upon which actions can be based. From illustrating how the Covid-19 pandemic made countries poorer, to showing how the processing-power of cryptocurrencies may have driven up the price of high-street graphics cards; data visualization is crucial to society obtaining meaning from data.

However, no current CDT focuses upon training its students in data visualization. This is despite government’s Department of Digital, Media, Culture and Sport listing data visualization as one of the top five skills needed by businesses – with 23% of businesses saying that their sector has insufficient capacity. Likewise, Wiley’s Digital Skills Gap Index, 2021, listed data visualization as the third most needed business and organisational skill for employees to succeed in the workplace in the next five years.

Key innovations of DIVERSE CDT will include students:

Credit: Alex Kachkaev and Jo Wood, City, University of London

Announced today, a new Centre for Doctoral Training (CDT) has been funded by a grant of over £9 million from the Engineering and Physical Sciences Research Council (EPSRC) to help train the next, diverse generation of research leaders in data visualization.

A collaboration between City, University of London and the University of Warwick, the EPSRC Centre for Doctoral Training in Diversity in Data Visualization (DIVERSE CDT) will train 60 PhD students, in cohorts of 12 students, beginning in October 2025. The set-up phase will begin in July 2024.

The funding announcement is part of a wider UK Research & Innovation (UKRI) announcement of the UK’s biggest-ever investment in engineering and physical sciences postgraduate skills, totalling more than £1 billion.

DIVERSE CDT will be supported by 19 partner organisations, including the Natural History Museum, the Ordnance Survey, and the Centre for Applied Education Research.

Data Visualization is the practice of designing, developing and evaluating representations of complex data – the kinds of data that lie at the heart of every organization – to enable more people to make real-world use of a source of information which is otherwise challenging to access.

Data visualization can be used to synthesise complex data into a clear story upon which actions can be based. From illustrating how the Covid-19 pandemic made countries poorer, to showing how the processing-power of cryptocurrencies may have driven up the price of high-street graphics cards; data visualization is crucial to society obtaining meaning from data.

However, no current CDT focuses upon training its students in data visualization. This is despite government’s Department of Digital, Media, Culture and Sport listing data visualization as one of the top five skills needed by businesses – with 23% of businesses saying that their sector has insufficient capacity. Likewise, Wiley’s Digital Skills Gap Index, 2021, listed data visualization as the third most needed business and organisational skill for employees to succeed in the workplace in the next five years.

Key innovations of DIVERSE CDT will include students:

  • undertaking and relating a series of applied studies with world-leading industrial and academic partners through a structured internship programme and an exchange programme with 18 leading international labs
     
  • using an interactive digital notebook for recording, reflection and reporting which becomes a “thesis” for examination, in lieu of the traditional doctoral thesis, and in line with current best practice in data visualization methodology
     
  • being provided with tools that mitigate against the dreaded isolation that PhD students fear, including opportunities for cohort reflection and supportive inclusion via enriching and inclusive processes for admissions, support, and a research environment that addresses barriers for students from under-represented backgrounds; specifically students who identify as female, students from ethnic minority backgrounds and students from lower socio-economic groups.

DIVERSE CDT will be led by Professor Stephanie Wilson, Co-Director of the Centre for HCI Design (HCID) and Professor Jason Dykes, Professor of Visualization and Co-Director of the giCentre, both of the School of Science & Technology at City, University of London.

Members of DIVERSE CDT’s interdisciplinary team include:

  • Professor Cagatay Turkay and Dr Gregory McInerny from the Centre for Interdisciplinary Methodologies, University of Warwick
  • Dr Sara Jones, Reader in Creative Interactive System Design, Bayes Business School at City
  • Professor Rachel Cohen, Professor in Sociology, Work and Employment, School of Policy & Global Affairs at City
  • Professor Jo Wood, Professor of Visual Analytics, and Dr Marjahan Begum, Lecturer in Computer Science, School of Science & Technology at City
  • Ian Gibbs, Head of Academic Enterprise at City.
     

Reflecting on DIVERSE CDT, Co-Principal Investigator, Professor Stephanie Wilson said:

“This funding represents a significant investment from the EPSRC and partner organisations in our vision of an innovative approach to doctoral training. We are delighted to have the opportunity to train a new and diverse generation of PhD students to become future leaders in data visualization.”

Professor Cagatay Turkay said:

“I am thrilled to see this investment for this exciting initiative that brings City and Warwick together to train the next generation of data visualization leaders. Together with our stellar partner organisations, DIVERSE CDT will deliver a transformative training programme that will underpin pioneering interdisciplinary data visualization research that not only innovates in methods and techniques but also delivers meaningful change in the world.”

Dr Sara Jones said:

“I’m really excited to be part of this great new initiative, sharing some of the innovative approaches we’ve developed through the interdisciplinary Centre for Creativity in Professional Practice and Masters in Innovation, Creativity and Leadership, and applying them in this important field.”

Professor Rachel Cohen said:

“DIVERSE CDT puts City at the heart of interdisciplinary data visualization. Data are increasingly part of the social science and policy agenda and it is imperative that those charged with visualizing data understand both the technical and social implications of visualization”

“The CDT is committed to developing and widening the group of people who have the cutting-edge skills needed to visualize, interpret and represent key aspects of our everyday lives. As such it marks a huge step forward both in terms of skill development and representation.”

Professor Leanne Aitken, Vice-President (Research), City, University of London, said:

“Growing the number of doctoral students we prepare in the interdisciplinary field of data visualization is core to our research strategy at City. Doctoral students represent the future of research and expand the capacity and impact of our research. The strength of the DIVERSE CDT is that it draws together our commitment to providing a supportive environment for students from all backgrounds to undertake applied research that challenges current practices in partnership with a range of commercial, public and third sector organisations. This represents an exciting expansion in our doctoral training provision.”

Professor Charlotte Deane, Executive Chair of the EPSRC, part of UKRI, said:

“The Centres for Doctoral Training announced today will help to prepare the next generation of researchers, specialists and industry experts across a wide range of sectors and industries.

“Spanning locations across the UK and a wide range of disciplines, the new centres are a vivid illustration of the UK’s depth of expertise and potential, which will help us to tackle large-scale, complex challenges and benefit society and the economy.

“The high calibre of both the new centres and applicants is a testament to the abundance of research excellence across the UK, and EPSRC’s role as part of UKRI is to invest in this excellence to advance knowledge and deliver a sustainable, resilient and prosperous nation.”

Science and Technology Secretary, Michelle Donelan, said:

“As innovators across the world break new ground faster than ever, it is vital that government, business and academia invests in ambitious UK talent, giving them the tools to pioneer new discoveries that benefit all our lives while creating new jobs and growing the economy.

“By targeting critical technologies including artificial intelligence and future telecoms, we are supporting world class universities across the UK to build the skills base we need to unleash the potential of future tech and maintain our country’s reputation as a hub of cutting-edge research and development.”

ENDS

Notes to editors

Contact details:

To speak to City, University of London collaborators, contact Dr Shamim Quadir, Senior Communications Officer, School of Science & Technology, City, University of London. Tel: +44(0) 207 040 8782 Email: shamim.quadir@city.ac.uk. 

To speak to University of Warwick collaborators contact Annie Slinn, Communications Officer, University of Warwick. Tel: +44 (0)7392 125 605 Email: annie.slinn@warwick.ac.uk

Further information

Example data visualization (image)

Bridges – Alex Kachaev and Jo Wood.

Link to image: bit.ly/3Iy3BRz Credit: Alex Kachkaev and Jo Wood, City, University of London

Data visualization for the Museum of London by Alex Kachkaev (a PhD student) with supervisor Joseph Wood, illustrating where people in London congregate in both inside and outside spaces, showing how a creative use of data can be used to build a picture of human behaviour.

Collaborating labs

Collaborators on the international exchange programme comprise the world’s leading visualization research labs, including the Visualization Group at Massachusetts Institute of Technology (MIT), USA,  the Embodied Visualisation Group, Monash University, Australia;  Georgia Tech, USA;  AVIZ, France; the DataXExperience Lab, University of Calgary, Canada,  and the ixLab, Simon Fraser University, Canada.

About the funder

The Engineering and Physical Sciences Research Council (EPSRC) is the main funding body for engineering and physical sciences research in the UK. Our portfolio covers a vast range of fields from digital technologies to clean energy, manufacturing to mathematics, advanced materials to chemistry. 

EPSRC invests in world-leading research and skills, advancing knowledge and delivering a sustainable, resilient and prosperous UK. We support new ideas and transformative technologies which are the foundations of innovation, improving our economy, environment and society. Working in partnership and co-investing with industry, we deliver against national and global priorities.

About City, University of London

City, University of London is the University of business, practice and the professions.  

City attracts around 20,000 students (over 40 per cent at postgraduate level) from more than 150 countries and staff from over 75 countries. In recent years City has made significant investments in its academic staff, its infrastructure, and its estate. 

City’s academic range is broadly-based with world-leading strengths in business; law; health sciences; mathematics; computer science; engineering; social sciences; and the arts including journalism, dance and music. 

Our research is impactful, engaged and at the frontier of practice. In the last REF (2021) 86 per cent of City research was rated as world leading 4* (40%) and internationally excellent 3* (46%).  

We are committed to our students and to supporting them to get good jobs. City was one of the biggest improvers in the top half of the table in the Complete University Guide (CUG) 2023 and is 15th in UK for ‘graduate prospects on track’. 

Over 150,000 former students in 170 countries are members of the City Alumni Network.  

Under the leadership of our new President, Professor Sir Anthony Finkelstein, we have developed an ambitious new strategy that will direct the next phase of our development.  

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Economic Trends, Risks and the Industrial Market

By a show of hands, I.CON West keynote speaker Christine Cooper, Ph.D., managing director and chief U.S. economist with CoStar Group, polled attendees…

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By a show of hands, I.CON West keynote speaker Christine Cooper, Ph.D., managing director and chief U.S. economist with CoStar Group, polled attendees on their economic outlook – was it bright or bleak? The group responded largely positively, with most indicating they felt the economy was doing better than not.  

Four years ago, the World Health Organization declared COVID-19 a global pandemic, seemingly halting life as we knew it. And although those early days of the pandemic seem like a long time ago, we’re still in recovery from two of its major consequences: 1) the $4 trillion in economic stimulus that the U.S. government showered on consumers; and 2) the aggressive monetary policies that have created ripple effects on the industrial markets. 

Cooper began with an overview of the economic environment, which she called “the good news.” The nation’s GDP is strong, and the economy gained momentum in the second half of 2023 – we saw economic growth of 4.9% and 3.2% in Q3 and Q4 respectively — much higher than expected. “The reason is consumers,” Cooper said. “When things get tough, we go shopping. This generates sales and economic activity. But how long can it last?” 

Consumer sentiment continues to be healthy, and employment is good, although a shortage of workers could impact that moving forward. The U.S. added 275,000 jobs in January, far exceeding expectations. “The Fed raising interest rates hasn’t done what it normally does – slow job growth and the economy,” said Cooper. In addition, the $4 trillion given to keep households afloat during the pandemic has simply padded checking accounts, she said, as consumers couldn’t immediately spend the money because everyone was staying home, and the supply chain was clogged. The money was banked, and there’s still a lot of it to be spent. 

Cooper addressed economic risks and the weak points that industrial real estate professionals should be mindful of right now, including mortgage rates that remain at 20-year highs, stalling the housing market, particularly for new home buyers. Mid-pandemic years of 2020-2021 had strong home sales, driven by people moving out of the city or roommates dividing into two properties for more space and protection against the virus. Homeowners who refinanced in the early stages of the pandemic were fortunate and aren’t willing to list their houses for sale quite yet. 

“The housing market is a big driver of industrial demand – think furniture, appliances and all the durable goods that go into a home. This equates to warehouse space demand,” said Cooper. 

Interest rates on consumer credit are spiking and leading economic indexes are still signaling a recession ahead. Financial markets are indicating the same, with a current probability of 61.5% that we will be in a recession by 2025. However, Cooper said, while all signs point to a recession, economists everywhere say the same thing as the economy seemingly continues to surprise us: “This time is different.” 

Consumers are still holding the economy up with solid job and wage gains, yet higher borrowing costs are weighing on business activity and the housing market. Inflation has eased meaningfully but remains a bit too high for comfort. We’ve so far avoided the recession that everyone predicted, and the Federal Reserve appears ready to cut rates this year.  

For the industrial markets, the good news is that retailer corporate profits are beginning to bounce back after slowing in 2021 and 2022, with retail sales accelerating.  

A slowdown in industrial space absorption was reflected in all the key markets – Atlanta, Chicago, Columbus, Dallas-Fort Worth, Houston, the Inland Empire, Los Angeles, New Jersey and Phoenix – but was worst in the southern California markets, which have since been rebounding.  

“Supply responded to strong demand,” Cooper said. “In 2021, 307 million square feet were delivered, followed by 395 million in 2022. In 2023, we saw 534 million square feet delivered – that’s almost 33% higher than the year before.” 

The top 20 markets for 2023 deliveries measured by square feet are the expected hot spots: Dallas-Fort Worth (71 million square feet) leads the pack by almost double its follower of Chicago (37 million), then Houston (35 million), Phoenix (30 million) and Atlanta (29 million). Measured by share of inventory, emerging markets like Spartanburg, Pennsylvania, topped the list at 15 million square feet, followed by Austin (10 million), Phoenix and Dallas-Fort Worth (7 million), and Columbus (6 million). 

“Developers are more focused on big box distribution projects, and 90% of what’s being delivered is 100,000 square feet or more,” Cooper said. Around 400 million square feet of space currently under construction is unleased, in addition to the around 400,000 square feet that remained unleased in 2023. “Putting supply and demand together, industrial vacancy rate is rising and could peak at 6-7% in 2024,” she said. 

In conclusion, Cooper said that industrial real estate is rebalancing from its boom-and-bust years. Pandemic-related demands and accelerated e-commerce growth created a surge in 2021 and 2022, and the strong supply response that began in 2022 will continue to unfold through 2024. With rising interest rates putting a damper on demand in 2023, vacancies began to move higher and will continue to rise this year.  

“Consumers are spending and will continue to do so, and interest rates are likely to fall this year,” said Cooper. “We can hope for a recovery from the full effects of the pandemic in 2025.” 

This post is brought to you by JLL, the social media and conference blog sponsor of NAIOP’s I.CON West 2024. Learn more about JLL at www.us.jll.com or www.jll.ca.

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