Info

Commercial Real Estate Pro Network

Commercial Real Estate Professionals who work with Investors, Buyers and Sellers of Commercial Real Estate. We discuss todays opportunities, problems & solutions in Commercial Real Estate.
RSS Feed Subscribe in Apple Podcasts
Commercial Real Estate Pro Network
2024
March
February
January


2023
December
November
October
September
August
July
June
May
April
March
February
January


2022
December
November
October
September
August
July
June
May
April
March
February
January


2021
December
November
October
September
August
July
June
May
April
March
February
January


2020
December
November
October
September
August
July
June
May
April
March
February
January


2019
December
November
October
September
August
July
June
May
April
March
February
January


2018
December
November
October
September
August
July
June
May
April
March
February
January


2017
December
November
October
September
August
July
June
May
April
March
February
January


2016
December
November
October
September
August
July
May
April
March
February
January


2015
October
September
August
July
June
May
April
March
February
January


Categories

All Episodes
Archives
Categories
Now displaying: Category: Real Estate
Aug 9, 2022

J Darrin Gross:

I’d like to ask you, Kurt Uhlir, What is the biggest risk?

 

Kurt Uhlir 

The big key is risk in my personal business. And I think in most people's businesses, actually, what am I wrong about today? And I like I don't know what I'm wrong about in my business today. But I can guarantee I'm wrong about at least three fundamental things. And I say that from too many decades is already working and not enough hours sleeping, realizing. Like I know one thing and feeling right and feeling wrong feels exactly the same until you realize your wily coyote out over the ledge and you realize in that moment, I've been wrong about a fundamental belief in my business for the last three months, three years, and something's come out wrong. And so I do a lot to in my personal life or my business life there to try to de risk that by putting people around me that have full transparency into what I'm doing and the decisions and my thought process in business. Some cases, those are paid mentors and coaches, other times or masterminds where people that are in similar, often non competitive businesses that are trying to accomplish the same growth trajectory, tried the same things, and fully exposed, hey, here's why. Here's how I'm making this approach. And be very give other people permission to speak into cordite. I think this is what you're missing. Comana that times where it's like, you realize, oh, God, I've been putting in a lot of resources, millions of dollars in some cases. And I realize I've been fundamentally wrong, and I just lost it all, man. And we've been really nice to somebody could have given me that insight beforehand. So I've, I've been in that wrong situation too many times. But I've also saved millions of dollars, by having close people in those relationships, point out things to me that I really thought I was right about, until they started pushing me on it. And I realized through kind of that discovery, now, there's much more riskier than I think, and I need to change path before I write that next check.

Aug 4, 2022

Today, my guest is Julie Blank. Julie serves as the chief operating officer at new standard equities, where she leads the firm's corporate multifamily operations, Investor Relations and asset management.

Aug 2, 2022

J Darrin Gross:

I'd like to ask you Julie Blank, what is the biggest risk?

 

Julie Blank:

Well, a couple of months ago, my answer might have been different than now that you know, the market has been changing so drastically with the I think with the speed and magnitude of the interest rate increases, it has, you know, spooked investors, it's you know, put some weight in the cell of borrowing. But there's still a lot of capital out in the market. You know, investors want to do deals, they, they need to place capital. So deals still get done. But I think the the risk that we're looking at now is being able to continue to do deals, but looking at the severe impact that the interest rates will have on your cash flow. You know, especially for us what we do, we're value add, so our, you know, our cash on cash is, you know, already a little low, we're more about, you know, when we when we dispose of the asset. So when you are in a area that we are and interest rates are increasing, we have to really step back and really scrub the underwriting be a little bit more conservative, educate our investors, you know, some investors have stopped investing, some have become a little bit more cautious, rightfully so. And then, you know, we have other investors that are still going, Hey, let's figure out how to make it work. So it's really just being able to realize that the market is changing now, and that it might continue to be that way for the next, you know, couple of years, not only on the acquisition bid on our existing deals, like I mentioned earlier, in our conversation is, you know, some of our deals, we have floating rate so it's being able to step back and forecast and look at what the risk might be, how do we overcome the risk and be more proactive right now. So I think a lot of it's going to come down to just kind of protecting cash flow and being able to underwrite new deals, and realize that we're not going to get to the, you know, 1819 20% returns that we were able to underwrite, you know, a few years back and be be satisfied that we might get 11 or 12%, which is still really good as a return and that you know, apartment investment is still the top You know, real estate investment type. And we've been in difficult cycles before in real estate, and we've survived. So yes, there's a risk, we're not going to be stupid, we're optimistic, we're cautiously optimistic. But we also know that real estate is still a good investment in apartments in particular, especially the asset class we're in, we're B class. So we're right in the sweet spot that the markets are gonna are doing well, the economy's doing well C's go to B's, when the economy starts to not go so well, the A's go to B's. So we were we're a bit protected as far as the as you know, occupancy and rents and stuff. But I think we still have to realize that there, there's going to be some risk and some hits on our cash flow because of the interest rate increase, but I think it will, won't make us stop doing deals, we just have to be a little bit more cautious and, and work with our investors much closer. So that we you know, have a better understanding of where we are and where where it's going to go. I don't have a crystal ball. I wish I did. But it's hard to say things are have moved so fast, that I think just taking a step back and looking at things closers is something we need to do. But at this point where we're continuing to operate business, as usual, with continued focus on being aggressive, as much as we can with rents, which is going to help overcome the, a little bit of the interest rate increase in the inflation, and continuing to work in our technology platforms to get all the information we can to make good decisions. That's where we are.

Jul 28, 2022

Today, my guest is Kyle Tushaus. Kyle is a partner with Pine Ridge capital. He has a background working for family offices under a sponsorship model focused on acquisition.

Jul 26, 2022

Darrin Gross:

I'd like to ask you, Kyle Tushaus, what is the biggest risk?

 

Kyle Tushaus  

I think, right now everybody's kind of afraid of inflation, which is an interesting business environment to be in for real estate, because everybody kind of gravitates towards this industry is a safe haven. I think you can kind of take that a step further and think if I'm going to de risk myself from inflation, and I'll say inflation, I don't think is actually the risk of getting at its eventually I think there's a risk that I think a lot of people are not thinking about some are but I haven't seen any media headlines about it. But within real estate, right, you might say okay, well what's my what's my best inflation hedge within an inflation hedge? Right. And that would be a property that I can mark to market more often, right? So the reason why consumer durables doesn't do well, and inflation is because I can wait 10 years to buy my next car or washing machine. But bread and butter, I'm gonna buy that more often. And so that price can keep going up every time I transact. So how can I mimic that in real estate and well, the properties that get marked to market more often would be better and inflation environment. So hotels get marked to market every single morning. So it should be the best inflation hedge, but you've got the dual side of that sword, it says it's also discretionary spending. So be very careful on that front. But then, so maybe I'm okay with every year, say in multifamily. You know, the, the triple net 25 year lease would probably be the worst, depending on how that lease got written. So there's obviously a spectrum even within the inflation hedge that is our industry of commercial real estate. But the thing I haven't heard enough people talking about, and the thing that scares me the most and influences a lot of how we're going into these, these, this first phase of deals is that the labor risk that is kind of bubbling under the surface where you see a lot of these value add deals, I mean, people have been ever since 2008, value add has been kinda like the everybody, everybody and their cousin is getting into this idea of renovating a property and popping the value of it. But I think there's going to be a massive moving target into how well you control those costs. And so for like an interesting data points since about the early 70s. Productivity, or I'm sorry, compensation has gone up 115%, since the early 70s, which sounds great hiring 10 or 15% increase in compensation. And that's for non supervising roles. So the roles, the jobs that are actually doing the thing.

 

While productivity of the same jobs has gone up almost 250% During that same time, so there's this massive difference in the throughput that's being provided by somebody in our job versus what they're getting out of it. And I look at the landscape of people now for the first time in four years even know what inflation is. Our socio socio economic landscape is not great, there's a lot of political strife. And I feel like that gap is probably going to get closed to some degree. And so I see a big risk factor in those business models that are going to be very reliant upon labor as an input, because I think we're about to see a compression of that gap. And I think rightfully so, I mean, you look at some of the numbers, and it's just, I might be a little jaded, I came out of, I came out of school, after the Oh, eight collapse. And so I don't, I don't really have the, I don't have that much of an experience through that run up. But, you know, you look at what was accomplishable with, say, your bass degree, or even no degree 3040 years ago versus now and how much you know, someone's having to work to get the same throughput in terms of quality of life. I don't see it continuing status quo for much, much longer, maybe, you know, we kick the can a little bit longer, but I don't see people being willing to do it. And the great resignation might be sorted a first little cue of it. But yeah, I think I think what's about to follow inflation is and we talked about energy prices going up housing prices going up, when labor prices keep going up. And right now it's the remote workers that are driving, you know, the leverage in those negotiations, it'll eventually get to all labor. And if your investment thesis is heavily dependent upon labor, I would think of some ways to lock that in ways that we mitigate that, right? If I if I see a value add deal. It's got to be in a market where I've already got a pretty good relationship with the GC. And I can go to them and say, Do you want to be part of the GDP tranche? And so with that, I can say, you're now going to have equity incentive, not just, you know, hourly rate, or markup incentive. So, you know, let's put together a budget of do not to exceed and you control that cost, but you're also in our cap stack. Now, you know, outside of that, I would be very worried about taking that GC risk, because I hear horror stories of colleagues having guys walked off the job for $2 more an hour. And, you know, it kind of sucks when you've already pulled the debt on the deal. And you got, you know, this bridge loan kind of clock ticking away at you, but then you look at the data and you're kind of like, well, I don't necessarily disagree with it. I mean, someone offered me more you probably do the same thing. And so I think it's something that needs to be taken into consideration when you're when you're underwriting because I do think that's the next big wave to follow in this. disinflation run up.

Jul 21, 2022

Today, my guest is Tom Dunkel. Tom has a background in corporate finance, and over 25 years of real estate and investment experience. Tom brings extensive experience to Belrose storage group, taking the company from a startup to a world class organization. And in just a minute, we're going to speak with Tom about self storage syndications.

Jul 19, 2022

J Darrin Gross

I'd like to ask you, Tom Dunkel, what is the BIGGEST RISK?

 

Tom Dunkell  36:38  

Like lots of business owners out there daring and we have a number of different different risks that we're faced with on a daily weekly annual basis. In the, like, in storage, as I, as I mentioned earlier, we're avoiding development projects, because we just see a lot of risk in those right now with with supply chain issues, labor issues, material cost issues, and it's just not really in the DNA of our company. So we're avoiding that one entirely. On the facilities that we do buy, we minimize risk by not over leveraging by being conservative with our projections. And of course, we use insurance to make sure that the physical plant is properly insured. But as far as our biggest risks our business there, and I would say, it's really, it's really me, it's really me and our leadership team. The business can only grow and go so far as we're able to take it. So we have to be the best that we can be we have to be we have to be educated and smart and and hire the right people and bring in the right partners. Because if any of those things get out of out of whack, you know, we're not going to reach our potential and that's what we're we're here to do or reach our potential and provide value to our investors. So we're always looking for ways to improve ourselves and improve our business. As I mentioned earlier, we do have core values, we do have a purpose. And so we use those as our guideposts every day in our decision making. But you know, we're always looking for better ways to do business to take care of our investors and just be good good members of our of our business community.

 

Jul 14, 2022

Today, my guest is Neal Bawa, Neal is a technologist who is universally known as in real estate circles as the mad scientist of multifamily. Besides one of the most in demand speakers in commercial real estate, Neal is also a data guru process freak and announced an outsourcing expert. Neal treats his $1 billion multifamily portfolio as an ongoing experiment in efficiency and optimization. And in just a minute, we're gonna speak with Neal about real estate, disruptive trends tokenization and property or prop tech.

Jul 12, 2022
Neal Bawa, what is the biggest risk,   Neal Bawa  

The biggest risk to the commercial real estate market. So I'll stay away from single family. The biggest risk to commercial real estate family is that the jobs back in 2014, made it very easy to raise money raise have syndicators raise money. And what has happened today is syndicators have become such a massive percentage of the overall multifamily market, that they are inflating the market far, far beyond its fundamentals, not just beyond its fundamental fundamentals, but far far beyond, because their ability to raise money has accelerated far beyond, and far quicker than the property's ability to raise rents. And so that has created a situation where there's a very, very aggressive, all ships raising effect, that is making these properties go far beyond their fundamentals. And that is a very risky situation. We're all in it. I'm in it, even though I'm doing new construction, I'm still in it. And so it's something that we have to really watch very, very closely. I do not believe that it's possible for this bubble to deflate, it has to burst. And so I'm, I'm just being very cautiously watching this to see if there's any evidence of it bursting. And it probably isn't ready to burst yet simply because rents are rising so fast. So to me, the point at which the bubble could burst is, you know, the Feds raising interest rates very, very quickly, they have to do their job because inflation is under control, which means and the Fed is only once out of 10 times succeeded in engineering a soft landing, which means that there's only a 10% chance that we'll have a soft landing, this time, there's a 90% chance we'll end up in a recession. So when that happens, rents could fall. And that I think is the point of greatest risk for the commercial multifamily market that has been flooded by syndicators including myself since 2014. So we've had eight years of crowdfunding and the syndicator flood, we have not seen the bubble bursts, all bubbles by their nature must first. I don't believe in bubbles deflating. It happens sometimes I don't think this one will deflate. So I'm curious to see what happens when rents drop a bit in a recession. And luckily, they don't tend to go down a lot in recessions. Sometimes they won't even go down at all in recessions, right? So most US recessions, rents haven't decline. But if they do start declining, I'm, I wonder what happens to the industry at that point.

Jul 7, 2022

Today, my guest is Nobu Iguchi. Nobu is the co founder and Managing Partner of Agya Ventures, prior to Agya, Nobu worked at Bridgewater Associates as a senior investment professional. And he holds a BS in chemistry from Yale and his MBA from Harvard Business School. And in just a minute, we're going to speak with Nobu about the Creator Content Economy, and how it can help real estate investors.

1 « Previous 15 16 17 18 19 20 21 Next » 72