Angelic Real Estate

Before many of you start early year-end vacations, here is a quick economic update. The past week's key takeaways: interest rates (of course), CPI, jobs, California passes more regulation (shocking?!), CRE prices, and both consumer sentiment (hint: up again) and small business optimism (very strong post-election). Have a great weekend, and for those taking off now, a great end of year and happy 2025!

Here is the latest quick-read economic bites, including Black Friday sales, the Fed Beige Book's latest - along with Fed meeting minute notes from November, plenty on inflation and affordability, and some details on mortgage application volumes as rates slide down again, and jobs.

Hold that filing paperwork on all your #CRE LLCs! The U.S. District Court in Texas has enjoined the enforcement of the Corporate Transparency Act (i.e. the “CTA”) saying that enforcement should be halted pending further rulings, because the court has determined that the CTA is likely to be ruled unconstitutional, and beyond the powers instilled to Congress. I chose just one of the law firm article links coming out of this ruling to post here, but many law firms have posted, or will post on this now that it's official, for now. What happens with the previous filing deadlines if that is reinstated or reinstated in some modified way is a bit of a guess, but unless that were to be reversed pretty immediately, it appears the January 1, 2025 deadline for all pre-2024 entity formations, and the ongoing rolling 30 day reporting window for newer entities, no longer apply unless and until that ruling is reversed or amended, at which point presumably a new fixed date would be set for pre-2024 formations - again only if that requirement is allowed to be reinstated at all. Given the extensive use of LLCs in the #CRE industry, this is pretty impactful for those of us in that world. The original case was Texas Top Cop Shop, Inc. v. Merick Garland.

What makes a fall Friday better than a pumpkin spice latte? Of course that would be a great summary of the economic news of the last week or so! CPI, go figure, is in there, as well as more on interest rates, #CRE prices and outlooks, and a lot more data that all impacts CRE users and investors. Enjoy a quick, informative read, and then get back to heading into the weekend!

The Compstak midyear office report (link below) is out and it shows a few interesting themes and trends: *Suburban office continues to beat CBD office on vacancy rate, something that first happened in 2021 and still continues. *Work from home/remote work (full time or partial weeks) continues to steadily decline, but remains significantly higher than 2019 levels. *Trophy class A buildings continue to see rent growth, and more and more leases are being signed at $100 psf or higher than ever before. Lease concessions remain higher than long-term averages but are slowly reverting towards the historical baseline. *Tenant lease terms continue to get longer as tenants get more comfortable with their long-term need for offices. *Total office using employment keeps growing and is at an all-time high *Nearly 1/4 of all office leases in the US will expire now within two years, and barring further short term extensions to kick the can down the road, that means a lot of companies are going to start to have to decide what their new office space need paradigm is going to be. Sometimes artificial deadlines are useful in forcing decisions, perhaps that will be the case for these tenants finally?

It's Friday and that means it's time for our almost-weekly economic news summary post, though this was written with the top election results in, but before the #Fed rate cut (as expected, 25 bps) that came two days later. It's been a big news week with the US elections, so having a pathetic jobs number (only 12,000) and even the rate cut (because it was expected) kind of got lost in the shuffle, but five minutes reading this is an easy catch-up for anyone.

Check out the ULI/PWC annual survey of top US markets to invest in for real estate. Once again Texas and Florida dominate the rankings, but New York gets back in the mix after a couple years of being much farther down the rankings.

Here is last week's economic news summary, to kick off this new week. Generally the news was mixed, and moderate, but the bond market (and corresponding treasury yields) continues to retreat from its bullishness a month ago about additional Fed rate cuts this year, over continued inflation concerns, and the lack of definitively bad economic news.

The full impact of Helene and Milton will not be known for a long time, but the tone of this week's economic news compilation - the data for which was from before both of those storms - could certainly gyrate in the wake of those hurricanes. I hope everyone is safe, unharmed, and for those directly impacted in the southeast, undeterred about forward progress, despite what must feel like overwhelming work to do to clean up and rebuild, not just property, but lives. America has long been a place where we endure and rebound, usually emerging stronger and better than before, and I hope that will be the case again in the wake of that destruction. See below for the economic news of the week.

Here is all the latest economic news, distilled down for quick Monday morning coffee time reading. Rate cutting from the Fed of course on the top of the list, and most of what follows cascades from there. The real impacts, of course, are yet to be seen.