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us real estate developers are slowing down and that is a noteworthy signal

these are property developers that lead major office space construction projects. reasons include:

• economic uncertainty

• soaring interest rates (less willingness to pour capital into these projects)

• workers are returning to offices slower than expected

earnings calls are also telling us the same thing

• VNO 0.00 (vornado realty): "there’s increasing uncertainty in the world and tenants are acting accordingly" (q3 '22 earnings call; nov-01)

• KRC 0.00 (kilroy realty): "there are times to buy, times to sell, times to develop and times such as now to be patient” (q3 ‘22 earnings call; oct-26)

some key statistics:

• the current office vacancy rate stands at 12.5%, up from 9.6% in ‘19 and the highest since ‘11, per costar

• 37% of the space under development remains available (aka, not yet signed / secured)

  • the figure is more than double the rate in ‘19 and approaching the record 39% in ’08, per costar

• ~210m square feet of sublease space is currently available, according to costar, a record high since ‘05

VNO 0.00 (vornado realty trust), KRC 0.00 (kilroy realty), BAM 0.00 (brookfield asset management)

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💡 something im thinking about

in case you haven’t seen these string of tweets from sbf himself… (click image)

that's all, folks 🐒

as always, i’m no financial advisor! (i’m no substitute for professional financial services)