Showing posts with label blog direction. Show all posts
Showing posts with label blog direction. Show all posts

Saturday, January 1, 2022

2021: What A Year

Ok, I’ll admit it…I wasn’t prepared for the impact that returning to work in person would have on my life and on TRET. Now, 2021 is coming to an end and I find myself yet again writing another end-of-the-year post in which I am apologizing for the recent inactivity on this awesome blog. This time, however, it’s a little different.

2021 marked 10 years since I published the first post on this blog. At the time I was real estate agent and teacher who was about to begin law school and was looking for ways to better understand real estate modeling and real estate finance. I hoped to create a community of like-minded people so that we could explore ways to better value real estate properties and mortgages and discuss the market. Ten years and many experiences later this blog has grown and transformed into a general forum on all things real estate and I am amazed at the direction it has taken. 2021 has been an amazing year for TRET, so let’s take a look at the year in review.

 The Market:

What a crazy year for real estate! 2021 started with an insane housing market in which demand greatly outpaced supply. The pandemic created so much pent-up demand that in some markets, average time on the market was less than two weeks. This state of affairs, was clearly a carry-over from the effects of the 2020 quarantine. As the year progressed, housing prices rose, however so did inflation, depressing any true wealth gains.

Inflation and pent-up demand places the housing market in a strange position, as inflation rises the cost of construction making an the housing supply unprofitable. On the other hand inflation reduces the real gains from selling property, which also makes selling property less desirable. The Fed’s response to this situation and the market in general will be to raise rates, which will lower demand, making acquisitions more expensive. This will lead to a market with inflated prices and high interest rates—a rare market in which buying is undesirable and selling is only mildly incentivized. For housing, 2022 is looking to be a slow year for housing as the market returns to normalcy. That said, the traditional approach to sales and acquisitions will likely be the most successful. CNN Business has a similar assessment of the market, but with a slightly different conclusion. Feel free to check out their article here.

Commercial real estate had a unique year as well, but for different reasons. The year began with depressed asset prices across all classes as businesses struggled to project their physical needs after the pandemic. Although asset values were down across the board, multifamily properties performed the best and proved to be the best way to the whether the storm. Then something even more interesting happened…seemingly out of the blue, institutional investors woke-up and began acquiring everything.

A surge of institutional acquisitions took place during the second and third quarters of 2021. Multifamily, retail and industrial properties started to surge. Office properties were being left behind, but many municipalities began to facilitate their conversion into multifamily properties in order facilitate even more activity in market. Then, just as quickly as it came, the wave was over. In retrospect, it is clear that the major players in the market were looking to move money into real estate to avoid the effects of inflation, but at the time, the frothy commercial market felt very much like a feeding frenzy.

The Podcast:

The 10th Anniversary of TRET saw the start of TRET: The Podcast. Although it certainly wasn’t an easy journey, recording the podcast episodes with my childhood friend and real estate extraordinaire, Conrad Bastien, Jr. was a lot of fun. TRET also branched into TRET Shorts, which were also a lot of fun to make. Expect more in future. The podcast was an opportunity to explore a number of topics in a manner that required even more depth and research than would be required by a blog post. Moreover, the chemistry created on that podcast cannot be duplicated. Please feel free to check out our episodes, which are posted here and on this blog.

The Growth:

This year has also seen TRET expand into the area of guest contributors. We were privileged to benefit from the perspectives of a number of guest authors, who allowed us to expand our content. I am personally thankful for the contributions as they served a motivation to keep TRET going.

So after a year like 2021, where do you go? The only answer is up. Look for more and better from TRET in addition to a migration to a new platform. TRET is growing, we’d love you all to be a part.


Tuesday, December 29, 2020

The End of 2020: Now What?

2020 has been a life-changing year for everyone, literally everyone. From the global pandemic, to the fluctuating economy, not to mention the seismic shift in the perception of "going to work," it is safe to say that the world is different place than it was 12 months ago. Now what?

Every year Bloomberg Business Week puts out its "Bloomberg 50"--a list of 50 individuals that have made their mark during the prior year. Although this year's list contains a number of impressive men and women who were able to quickly mobilize and make moving, positive contributions during this tumultuous year, it is notable that not one member of this list was mentioned for contributions to the real estate market. In fact, there are many executives on the list that are touted for reducing the size and/or the footprint of their companies, which in many instances includes real estate divestment. Furthermore, Blackrock, a private equity that is well know for its real estate investments, has made the list, not for real estate, but for its renegotiation of national debts in South America.

Wednesday, February 11, 2015

Why I Choose Real Estate

A number of times throughout my career, I have been asked a very poignant question—why real estate? Admittedly, other asset classes do carry a certain level of prestige, which is typically more associated with the asset’s mystique, yet I find that real estate can be as involved and complex as any other asset class. Although the mathematics for risk curves and certain derivative transactions may be more intricate than those used in a typical commercial real estate property acquisition, such transactions and risk analysis can be structured around real estate financing structures. In fact, the mathematical aspects of some of the more “complex” investment vehicles are not as esoteric as they seem and most can be understood, given enough time and exposure to them. The legal issues specific to each class of investment can also be considered complex, but not beyond the comprehension of most competent lawyers. Ultimately, the decision to prefer one asset class over another boils down to a matter of preference.

So, why do I so closely follow real estate? The reason is that underlying any real estate-related transaction is a relationship to a tangible hard asset. A tangible hard asset that has a value influenced by easily understood factors. Real estate markets for every property class are motivated by the economy, real estate demand and the market for the business that the property serves. The real estate market is also relatively stable and changes over the course of years, not months or weeks. Finally, real estate is one of the few assets that lends itself to owner-operation in a way that a company or payment stream may not.

Sunday, November 23, 2014

It's Good To Be Back

Hello Blog Audience,

It's been a while, but I believe it is time to renew this blog and begin posting again. Having finished law school and gained a greater appreciation for the legal aspects of real estate and real estate securities, I have much to write about the wonderful world of real estate and real estate finance. I continue to augment my quantitative knowledge of both real estate and securities, but have found it necessary to also be intimately familiar with the law that makes all of this analysis possible.

I recently looked back at my previous posts and saw how the discipline of blogging about a topic forced me to confront the limits of my knowledge and seek answers. In that sense, this blog was, and continues to be, as much about my quest to better understand real estate finance as it is an expression of my knowledge of the asset class. Having stated that personal realization, I look forward to the more robust nature of the content of this blog. Post will be more frequent and necessarily more succinct in nature. I cannot promise daily posts, but I can promise to "get back on the bicycle yet again." Now for the legal disclaimers.

This blog is for the purposes of information only. I make no representations as to the correctness of the information posted on this blog and any posted information must be verified independently. Nothing on this blog is intended to give legal advice, suggest legal advice or be construed as engaging in the practice of law in any way. All discussions of legal matters should be verified by competent council, licensed to practice in the jurisdiction in question. Any of the opinions posted by anyone on this blog are those of the poster alone and are not necessarily shared by me. Such opinions include, but are not limited to, those from readers, fellow bloggers, guest bloggers and/or any miscellaneous commentary posted, with or without my knowledge.

That was a mouthful. Happy reading and feel free to leave a comment.