Worldwide, There Is Too Much
A weekend topic on an assortment of bubble related articles, starting with Successful Farming. “According to Ag Funder’s Agrifood Tech Investing Report: Mid-Year Review 2017, start-ups focused on farm-management software, sensing, and IoT were the most numerous, with 46 raising $213 million in funding. With so many vying for your attention, it’s no surprise fatigue may be setting in. The reality, says Rob Trice, founder of Mixing Bowl, is that this growing bubble of ag tech companies will eventually burst and only a few will actually be successful. While accelerators and incubators are popping up to help resolve issues like funding and viability, Trice is concerned at the trends he believes are taking shape.”
“‘Fifteen years ago, there were fewer than 10 incubators and only one accelerator in the U.S.,’ he says. ‘Today, there are over 1,400 combined. This overabundance of incubators and accelerators is creating an overabundance of start-ups. I am also starting to see some start-ups living incubator to incubator, which makes me wonder why it didn’t successfully incubate the first time.’ His other concern is that these competitions are becoming entertainment. ‘I call it the Shark Tank effect,’ says Trice. ‘One competition had start-ups make presentations to funders while they jumped out of an airplane. I don’t want to see start-up funding become a sport.’”
From the Door County Pulse. “In Wisconsin, it’s hard to imagine a world in which there is too much cheese. But too much of everything farms produce has placed those producers in one of the toughest times since the Farm Crisis of the 1980s. The depression has widespread impacts, particularly for ongoing conservation efforts. ‘There’s a deep and terrifying concern,’ Don Niles, owner of Dairy Dreams in Kewaunee County, said calmly.”
“Niles and other farmers deal mostly in dairy products, which are experiencing sustained price depression after enjoying historic highs just four years ago. But cash crop farmers, particularly those who grow corn, soybeans and wheat, are not out of the weeds on prices either. After similar highs just a few years ago, those commodities have kept flat for a few years at levels that don’t give farmers any room for error or expenses. ‘Worldwide, there is too much,’ Niles said of agricultural commodities.”
“Oversupply, the culprit in the low prices, is happening for a myriad of reasons. In 2016, the U.S. government bought $20 million worth of excess cheese that no one else wanted to buy to help hold up depressed dairy prices. It also may have helped a bit, but it didn’t stop farmers from continuing to produce. For eight straight years, the United States has set a new record for milk production. Stockpiles of crops are also at an all-time high. The amount of surplus wheat, corn and soybeans sitting in grain bins across the world waiting to go to market has hit a record for each of the past three years, according to the United States Department of Agriculture.”
“According to the U.S. Department of Agriculture, net farm income has been cut in half since 2013 with four straight years of decline. The department anticipates farm incomes to decline again in 2018.”
From Community Impact in Texas. “The plethora of new Plano restaurants that have opened in the last year have brought with them a variety of tantalizing foods for area residents to try—and difficult choices for some existing restaurant owners. City records show the number of food establishments in Plano grew by 8 percent in 2017 alone. According to city records, the total number of Plano food establishments in 2017 saw a 22 percent increase when compared to 2013, with northwest Plano contributing to that total.”
“‘There’s a tremendous saturation of restaurants within [northwest Plano],’ said Andy Rittler, the executive director of the Greater Dallas Restaurant Association. ‘Normally I don’t see that there’s a restaurant bubble. In this case, it seems that there are a lot of restaurants that are opening up in a short amount of time, and it presents a lot of challenges for those that are already existing.’”
The Houston Chroncle in Texas. “Hurricane Harvey was a boon to Houston-area hoteliers who had been struggling to fill rooms during the oil downturn. Seven months after the storm, however, the Harvey hotel bump is largely over. At the Almeda Inn, all 32 rooms were packed with displaced residents in the months after the hurricane. Now, the south Houston motel is down to three rooms of impacted families. ‘We had a couple of months of good business, but it’s slowed down,’ general manager Vinod Bhakta said. ‘People left one by one. If they find a different place, people move.’”
“Before Harvey, Houston had the weakest hotel market among 25 major metros nationally with an average occupancy rate of 62 percent. Danny Patel, who with his son owns the Plainfield Inn in the Sharpstown area, said displaced residents once claimed as many as 40 rooms in the 114-room motel. That number has since dwindled to two rooms, he said. ‘It helped us pay bills and our property taxes,’ Patel said of the Harvey hotel bump. ‘Now, we have to survive somehow.’”
The Connecticut Post. “The demand for office space is changing, and local communities are struggling to keep up. In Trumbull, as officials look for ways to keep the town economy vibrant, addressing the glut of office space remains a top goal. Across Fairfield County, the office market continues to struggle with high vacancy rates. Still, Trumbull represents an extreme — according to a 2017 office space market analysis by Cushman & Wakefield, the town’s 44 percent vacancy rate is highest in the region.”
“When buildings can’t be filled, there is increasing interest in putting its land to better use, as is the case with the former Canon USA building at 100 Oakview Drive. The three-story, 79,000-square-foot space was purchased in January for $4.5 million and is slated to be demolished to make way for a 202-unit residential development. Officials said this transition meets a growing need for housing.”
“‘That was a fallow site,’ said economic development director Rina Bakalar. ‘It was an old model of an office building. It was not going to be used that way. … That has been a catalyst for most of that area so we have a lot more interest in that area.’”
The Pacific Standard on Massachusetts. “Chu Huang has lived in the Boston Chinatown her whole life. In the last few years, the 29-year-old has noticed a change: more people with luggage and backpacks waiting on the doorsteps of apartment buildings to be let in or picked up. She suspects the people laden with bags are travelers renting Airbnb units. Their presence may be muted, but the effects are deeply felt in the neighborhood.”
“‘People think of Airbnb as friendly, like you go stay in somebody’s home,’ says Lydia Lowe, the executive director of the Chinatown Community Land Trust. ‘But it’s become a huge industry that’s actually eating up a lot of the housing in the city. These were people’s homes before. Tenants have been evicted for this purpose.’”
“Today, high-rise towers named One Greenway and Radian tout amenities such as yoga studios and pet care. Studio apartments can rent for as much as $2,800 a month in a neighborhood where 24 percent of families live below the poverty line. Off the top of her head, Chen can think of seven buildings that have been emptied of long-term residents by landlords and turned into de facto hotels through short-term rentals. Even units in the new luxury buildings are being rented out as Airbnbs.”
“‘I see a lot of them being listed as well. We basically have been building housing that people don’t need,’ Chen says.”
