Slate just published a new thought piece on the evolution of the grocery store. It starts with the first “self-service” Piggly Wiggly in Memphis (an innovative approach at that time) and ends with the important functions that grocery stores serve today and will likely serve in the future.
The shopping experience has become increasingly omnichannel (i.e. online & in-store), which means that grocery stores are in the midst of transforming from simple retail stores to hybrid retail and last-mile distribution hubs. (Related post here.)
All of this is central to how we think about this real estate asset class and we are to happy share it publicly in this new thought piece. Slate plans to publish more of these and so, if you’re interested, I would encourage you to subscribe at the bottom of the page.
Full disclosure: I am personally long Slate Grocery REIT.
Since the summer, I have been using the lunch line at Jimmy the Greek (in First Canadian Place) as a crude measure for the reopening of the CBD in downtown Toronto. It is partially a joke. Those of you who know me will know I am a fan of Jimmy the Greek (and large filling lunches in general). But at the same time, it is a probably a fairly decent (but again crude) proxy for the utilization rate of the offices that sit above and around Jimmy. Pre-COVID the lunch lines were always long and there was usually nowhere to sit. In the spring of this year, I was often the only person there, single-handedly keeping Jimmy alive. But things picked up throughout the summer months and there was a significant spike this week, following Labor Day (see above tweet). This was the spike that many/most of us were predicting and it showed through in the Jimmy the Greek Reopening Index.
We have been working with Vanderbrand for many years. They are the creative agency behind both Junction House and One Delisle. We love the work that they do. It’s beautiful, and they have always managed to get our vision behind each project.
In the case of Junction House, we wanted something clean and simple that at the same time responded to the creative edginess of the Junction neighborhood.
And in the case of One Delisle, we wanted something elevated but that wasn’t traditional or typical. One Delisle is all about pioneering architecture and the brand needed to reflect that (we ended up creating our own typeface that will be carried through into the completed building).
If you’re interested in learning more, Vanderbrand has just updated their website to include a full “case study” on One Delisle. You can check that out over here. Below are a few of my favorite images.
I jus pre-ordered a copy of Edward Glaeser and David Cutler’s new book called, Survival of the City: Living and Thriving in an Age of Isolation. (I’m usually a hard copy kind of guy, but I decided to try this one out on Kindle / my iPad). The official release date is September 7, 2021, so if you’re reading this post in your inbox, the book is now available online.
I’m not familiar with the writing of David Cutler (he’s a public health expert), but I am a follower of Edward Glaeser and have written about his work on a number of occasions. Glaeser’s last book, Triumph of the City, was a kind of celebration of the wonders of urbanism. After reading it, you couldn’t help but feel that cities are our best chance at creating healthy, sustainable, and wealthy communities.
But in listening to Glaeser throughout this pandemic I have noticed that his commentary on the future of cities hasn’t been filled with unbridled optimism. You get the sense from him that cities are at a crossroads. This is not to say that city life will not persist, because it will. Cities are powerfully resilient. But not all cities are created equal. Some will continue to flourish in this new economy, but others will not.
This is one of the arguments that they make in this new book and I’m looking forward to reading it once it lands in my Kindle app.
With seemingly so much happening in the world these days — everything from COVID to climate change — it is perhaps easy to feel a little discouraged about the current state of affairs. But I am an optimist. And as I mentioned on Twitter a few weeks ago, I haven’t been this excited about the future of tech and the internet in a long time.
I believe in the resiliency of cities and, as I have been arguing on this blog all throughout COVID, I think the claims about the demise of our cities have been greatly exaggerated. In fact, I think this pandemic has forced us rethink a lot of things about our urban environments, including how we allocate and use our public spaces (think patios). Some of these changes have been for the better and they’re not going to go away.
I think the benefits of working in close proximity to others are too great to have everyone working remotely. Yes, we have learned that decentralization is possible. But there’s an overwhelming amount of research telling us that we’re all more innovative and productive when we cluster together in cities and in offices.
I have been back in the office almost 100% of the time since it has been possible to do that. And I am much happier and more productive as a result. There’s also research suggesting that there are psychological benefits to a reasonable commute. It creates a break in our day, allows us to detach from our work, and gives us time to process stuff in our mind.
I think things like digital fashion and augmented reality are going to have profound impact on the way we consume things. You could also argue that there’s a sustainability angle to more digital and less physical. And of course, I am excited about the transformations that I believe cryptocurrencies and blockchain technologies will continue to bring to many different industries (if not most).
This morning I was reading a Financial Times article about cryptocurrencies in the developing world. It it perhaps no surprise that many of these countries are providing to be early adopters. People are leapfrogging over to cryptocurrencies because their existing currencies and financial systems aren’t effective enough. That has lead to adoption and penetration that looks something like this according to FT:
There is, of course, many other things to be optimistic and excited about. But I’ll leave that for the comment section below. What are you excited about these days?
According to this RedFin data from 2019 — which looked at normalized sale prices and Walk Scores above 50 — it is about 23.5% or $77,668 for 16 major US metro areas. Again, this is 2019 data and so things may have changed a bit, especially with the whole COVID thing.
It also varies by metro area in this data set. The premium in Boston, for example, is almost 30%. Whereas the premium in Oakland is actually a slight discount (-1.3%). There are going to be local conditions that play a role.
But as a whole there is an economic trend here that makes intuitive sense to me. Though it’s not just a question of how pricey your home is. You also need to consider your transportation costs, the value of your time, and the health benefits of living in an environment that promotes consistent and moderate activity.
When you factor all of these things, maybe “premium” isn’t the right way to look at this.
Earlier this year, Enrico Moretti, who is a professor at UC Berkeley, published this research paper looking at the effect of high-tech clusters on productivity and innovation. (I am unclear if there is any relationship to the Italian brewing company Birra Moretti.)
One of the things he looks at in the paper is the decline of Kodak. Headquartered in Rochester, New York, Kodak famously missed the transition to digital photography. And so by the late 1990s, they were forced to start letting people go. The result was an almost 50% decline in the size of the entire “high-tech cluster” in Rochester.
But what Moretti goes on to test in his paper is the impact that this employment decline had on productivity and innovation outside of Kodak and outside of the photography sector (but within Rochester). And what he found was that between 1996 and 2007, the productivity of non-Kodak inventors dropped by about 20%!
This, of course, is one of the great features of cities. Even if you’re not working at some big company with lots of smart people, just being in the same city, on the same block, or within the same office building, can make you more productive. It turns out that business ecosystems are pretty interconnected. Spillovers are important.
For more on this topic, check out this recent Wired article by Viviane Callier. In it she makes the case that remote work is going to negatively impact productivity and innovation over the long run.
Years ago I wrote about a book that venture capitalist Albert Wenger was writing — in public I would add — called The World After Capital. The public bit is interesting. As he was writing the book over the last ten years or so, he did it in public and published drafts along the way. This allowed him to get feedback, learn things, and revise accordingly. He calls this a “knowledge loop” and it ties in nicely with some of the topics that he covers in the book.
The first focus of the book is on explaining that capital (which was a constraint of industrialization) is no longer scarce. This isn’t necessarily true everywhere, but he argues that it is true in the developed world. What is instead scarce today is attention. That is our defining constraint as we continue to move into the Knowledge Age. The second focus of his book is on how he thinks we should best respond to these changes, as well as to the limitations of capitalism.
I haven’t read the book yet (only scanned it), but it’s now in my queue. Normally my queue consists of a stack of partially read books next to my bed. But this one is digital only for the time being. If you’d like to read a digital copy (there’s a downloadable PDF), go here. Apparently there will also be a hard copy available sometime later this year or early next year.
Here’s some recent data from RENTCafe looking at the supply of new multifamily rental apartments in the US. About 334,000 rental units are expected to be completed and occupied this year, which is a decline from the 2018 peak of 357,000 units, though still a relatively high number. This year is expected to be the fifth consecutive year where supply is greater than 330,000 units. Below you can also see how this breaks down across the largest MSAs (metropolitan statistical areas).
For this study, RENTCafe looked at new apartment construction data for buildings with 50 or more units (so no smaller infill projects). It covers 109 US metro areas. To determine whether a building is likely to be completed in 2021, they looked at confirmed certificate of occupancies and also used some sort of fancy algorithm to predict the likelihood that an under construction project will get one before the year is out.