The revolution in commuting is only beginning to take flight — as in drones that takeoff and land vertically. AutoFlight, a Chinese firm, is working on getting its electrically powered air taxi approved by Europe’s air-safety regulators. That is but one of 200 such projects around the world that attracted $5.1 billion in investment during 2021. The idea: drones capable of vertical takeoffs and landing will be well suited to operate passenger services across large urban areas, such as flying people between airports and city centers. Airbus and Boeing have joined the fray with investment dollars, as has Google co-founder Larry Page. (McKinsey, The Economist)
New active ingredient for pharmaceuticals: Zipline, a drone operator, will begin delivering prescription medicines to patients’ homes in a suburb of Charlotte, N.C., this year, helping usher in the long-anticipated era of routine drone drops. Battery-operated drones could satisfy demand for “instant delivery” (i.e., within 15 minutes), while easing traffic congestion. Drones routinely deliver medicine, food and sundries today in places such as Africa, Australia and Finland, but the revolution has been playing out in slow motion in the United States while the FAA works on rules to govern drone safety in increasingly crowded skies. (Axios)
U.S. powerplay: The standoff between the United States and Russia over Ukraine has “energy” written all over it. Europe still depends heavily on Russian natural gas imports. But during the past month, for the first time ever, U.S. exports of liquefied natural gas to Europe exceeded Russia’s pipeline deliveries, according to Daniel Yergin, a leading authority on energy and geopolitics, and author of The Prize, a Pulitzer Prize-winning book on the subject. Writing in The Wall Street Journal, Yergin noted that the United States is again the world’s top oil producer — almost 20 percent above the other two largest producers, Saudi Arabia and Russia — and the world’s top natural-gas producer.
Life sciences on growth spurt: Investment in U.S. life sciences real estate increased by 62 percent during 2021, with further growth of at least 10 percent expected in 2022. Investment in life sciences real estate, comprised of lab and R&D properties, reached $21.4 billion in 2021, a 62 percent increase over 2020. Investment in the sector has grown by 111 percent since 2018. (CBRE)
Where the chips are down: Semiconductor companies are preparing to make major investments in their research and development facilities to meet growing demand as the global chip shortage persists. The world’s largest contract chipmaker, TSMC, has committed to investing $100 billion over three years to ramp up production of its silicon wafers. The Taiwanese chip giant is building a $12 billion fabrication plant in Phoenix and another in Japan to increase capacity. Intel, a TSMC rival, announced this past year that it plans to spend $20 billion on two new semiconductor plants in Arizona. (CNBC)
Build to rent: 2021 saw the completion of 6,740 new homes in build-to-rent communities, the highest yearly total on record. The future looks even more robust, with an estimated 14,000 built-to-rent homes currently under construction in the United States to be delivered this year. The metro area with the most single-family rentals is Phoenix with 6,420 homes. (RENTCafe)
Record stake in real estate: Global commercial real estate investment reached a record annual total of $1.3 trillion in 2021, up by 55 percent from 2020, and 21 percent from 2019. (CBRE)
Crypto crime: The dollar amount collected through cryptocurrency-based crime hit a record high in 2021, as the volume of cryptocurrency transactions overall grew into tens of trillions of dollars. However, the volume of illicit activities remains a small share of the total cryptocurrency transactions volume. (Chainalysis, WSJ)
Playing with fire: Employees who report being “burned out” are 63 percent more likely to take a sick day, and nearly three times as likely to be actively seeking a different job. (Gallup Organization)
The SPAC bubble bursting: The oversaturated SPAC market is continuing to get crushed. Companies that went public via blank-check deals have been among those worst affected by January’s tech-driven sell-off. Meanwhile, faced with unfavorable market conditions, many sponsors have been forced to scrap their proposed deals, sometimes even before the SPACs got listed. The proprietary CNBC SPAC Post Deal Index, comprised of SPACs that have completed their mergers and taken their target companies public, tumbled 23 percent in January. (CNBC, Wolfe Research)
Mike Consol (m.consol@irei.com) is editor of Real Assets Adviser. Follow him on Twitter (@mikeconsol) and LinkedIn (linkedIn.com/in/mikeconsol) to read his latest postings.