What's Happening Now
Somewhat lost in the shuffle of the stock market news, election news and COVID-19 counts, the US GDP blasted through expectations and clocked a 33.1% annualized growth rate in Q3, the highest quarterly growth our economy has experienced by roughly 2X. Now, take that with a pretty big grain of salt given that anything compared to the abyss that was Q2 is going to look massive. It’s a great sign of a quick bounce back from the toughest of troughs, but GDP is still down 3.5% over the end of year 2019 numbers, so we have some more room to get back to pre-COVID levels.
Another surprising stat we saw this week was in the NMCH Rent Payment Tracker that we’ve been watching since the beginning of this crisis. Rent payments through October 27th checked in at 94.6%, which is not only the highest since the beginning of the crisis, but also one of the tightest spreads we’ve seen relative to the same period in 2019, down roughly 120 basis points year over year.
Is CoStar vying to be the Amazon of real estate? My magic 8-ball says all signs point to “Yes”. We learned this week in the articles below they’ve both acquired Emporis to expand their data footprint globally, gaining access to their database of over 700,000 buildings in more than 100 countries, as well as engaged in talks of a takeover bid for CoreLogic. CoStar has brushed up against antitrust talks in some of their prior acquisition activity, so I have to assume their attorneys are brushing up their battlecards if the CoreLogic deal were to progress.
What To Watch
This close to the election, it’s hard to really watch much else right now. Hopefully if you’re reading this, you’ve either already done your civic duty to go out and vote or will plan to do so on Tuesday!
We’re continuing to monitor the health side of the crisis, and unfortunately, we’ve ramped up to a new crescendo of confirmed cases in the US, having hit more than 90,000 confirmed cases on the 29th. That’s up more than 20% over the prior peak in July, and the curve is on a very frighteningly upward trajectory. We knew this fall and winter would be rough, so hopefully we can all do our part to keep the spread of this virus in check.
With Halloween upon us, please do your best to stay safe out there! Wash those hands, wear a mask and keep your distance from those in high risk categories!
-Adam Hooper, CEO
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20192020Rent Payments Collected by May 27th94.8%93.3%Rent Payments Collected by June 27th94.7%94.2%Rent Payments Collected by July 27th95.3%93.3%Rent Payments Collected by August 27th94.0%92.1%Rent Payments Collected by September 27th93.7%92.2%Rent Payments Collected by October 27th95.9%94.6%*Data brought to you by NHMC Rent Payment Tracker
CurrentPrior Week Change10 Year Treasury0.879%+0.037%DOW26,501.60-1,833.97S&P 5003,269.96-195.43Unemployment Rate7.9%--Covid Cases - 7-Day Avg76,785+15,529*Metrics as of Friday, October 30
Listen as Jamie Woodwell, VP of Economics at Mortgage Bankers Association, provides a lender's perspective on the current market.
A surge in business and residential investment along with stronger consumer activity helped the economy after its worst-ever quarter in Q2.
Former malls and abandoned shopping-center sites are in the midst of a repurposing and one of those new uses is senior housing.
CoStar didn't disclose the acquisition price for its purchase of Emporis
CoreLogic Inc. is in discussions with CoStar Group Inc. and a consortium consisting of Warburg Pincus and GTCR about a potential takeover
Mathrani says company is on its way to profitability next year
At the same time, leasing activity over the past two quarters hit at a 30-year low, with only 385,000 square feet of leasing activity in the third quarter
*If you like this post, be sure to enroll in our free six week course on the fundamentals of commercial real estate investing — RealCrowd University.*