Location Strategy Chartbook 071324

The U.S. is "no longer an overheated economy" with a job market that has cooled from its pandemic-era extremes and in many ways is back where it was before the health crisis, Fed Chair Jerome Powell said in remarks to Congress that suggested the case for interest rate cuts is becoming stronger.

"We are well aware that we now face two-sided risks," and can no longer focus solely on inflation, Powell told the Senate Banking Committee on Tuesday. "The labor market appears to be fully back in balance."

The job-hopping frenzy of the pandemic years has given way to what some economists are calling the "big stay." The lower quits rate comes alongside a white-collar job slowdown and shriveling pay for new hires

Japan holds one of the world's biggest dollar reserves & US Treasuries. The yen's currency value is at a nearly 38-year low.

Many analysts say Tokyo is getting ready to redirect some of the government-controlled dollars back into yen assets, a decision that could ripple through global financial markets, given the sums involved

1/2 of the $1.5B fund is in foreign assets, mostly in dollars per the WSJ

Hedge funds are piling into electricity trading. They expect power prices to stay volatile as demand for power rises, renewables grow in importance, and ageing grid infrastructure struggles to cope.

Behind the boom are two trends: the rise of energy-intensive artificial intelligence and of electrification due to the energy transition. The International Energy Agency projects that AI’s energy usage will rise 10-fold over the next two years.

The net charge-off rate at $100 billion-plus asset banks for non-owner-occupied CRE lending exceeded 1.1% in the first quarter, which was about a percentage point or more above smaller categories of banks, according to S&P Global Market Intelligence’s figures—though the rate was down more than a quarter point from the previous quarter.

With a $100B investment arsenal , the Mormon church has amassed one of the most significant RE portfolios in the country: per a ‘22 watchdog investigation, it controlled more than 1.7M acres valued at least $16B, everything from office towers to megamalls to residential skyscrapers. Its ambitions extend well outside its home state of Utah: recent head-turners in Florida include a $174M industrial megadeal in Miami-Dade and a 315-unit rental in Plantation for $133M ($420K/door).

Total Houston industrial sales during first half of year falls to 8 year low. High borrowing costs and recent supply wave are to blame

A total of about 800,000 people moved out of large urban counties last year, or twice the pre-pandemic rate, EIG said. Moves out of the city have combined with lower birth rates to drag down the number of young children in big urban counties. Birth rates there have fallen at twice the rate of those in rural areas over the past decade or so, EIG found.

Nationwide, 58% of all US counties saw a decline in their under-5 populations, EIG said.

Apartments being built look the same, from similar floorplans to design palate. The location as result becomes the heavy differentiator - is it enough to compel a renter to pick a higher rent, or do apartments have to compete heavily on price only?

Sample of Houston MSA rentals built after 2020 advertised on Zillow