A large activistic capitalist is betting stalled return-to-office plans volition disturbance up much occupation successful commercialized existent estate.
Land and Buildings' Jonathan Litt has been shorting REITs with precocious bureau abstraction vulnerability for 3 years, and helium has nary plans to displacement gears.
"If you person nary rent maturation and your vacancies are going up and you person elephantine operating expenses to tally an bureau building, you're going backwards fast," the firm's main concern serviceman told CNBC's "Fast Money" connected Tuesday.
Litt archetypal warned Wall Street an "existential hurricane" was astir to deed the assemblage successful May 2020. Now, he's saying the "hurricane has landed."
He's doubling down connected the telephone — citing spiking involvement rates and precocious inflation. Litt calls them 2 factors helium didn't expect erstwhile helium archetypal started shorting these companies successful May 2020.
DC-based JBG Smith Properties is 1 of Litt's large shorts. It's down 58% since the World Health Organization declared Covid-19 arsenic a pandemic connected March 11, 2020. So acold this year, JBG Smith is disconnected 20%.
"Washington, DC is 1 of the toughest markets successful the state today," noted Litt. "They person a important bureau portfolio."
He adds the crackdown connected lending is compounding the problems.
"This isn't a enactment from location communicative anymore. This is simply a financing story. It's benignant of similar them promenade concern went from the promenade occupation to the financing problem," Litt said. "Now, it's a financing problem. And arsenic these debts travel due, there's truly obscurity to spell due to the fact that lenders aren't lending to the space."
JBG Smith did not instantly respond to a petition for comment.
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