DeliverAlpha

[Jeremiah Shamess | Toronto Land & Building Sales @JShamess]

$9.4 Billion Day, a good news day, and my breakdown below:

Kingsett Capital & Choice REIT are buying First Capital REIT for $9.4 Billion

Why this is a strong indicator on where value is today?

1. First Capital was a strong proponent of urban income producing properties with secondary uses (ie. redevelopment or reconfiguration - think Liberty Village Metro grocery store).

- Extremely skilled at extracting value from lease turnover and finding new tenancies
- Knack for buying best located properties
- Human Capital

2. Kingsett is a vertically integrated lender developer, asset manager and REPE with high skillset on, enough to unlock any First Capital project in house.

- Very skilled in structured deals, finding the uncommon value piece in any asset class
- Strong operator asset management

3. Choice Properties REIT, highly specialized retail landlord and sister operator of Loblaws & Shoppers. Vertically integrated developer as well.

- Deep intelligence on consumer trends which will see value in how the shopper is buying before the data shows up

(think how can we buy under utilized retail properties and increase rents knowing consumer is spending more before it happens)

Overall this was very good indicator of a bottom for IPP in Canada CRE.

Public markets are more negative than the real world value of private markets, so Kingsett & Choice decided to move.

[DeliverAlpha @AlphaDeliver]

@mamboitaliano__ Stand strong and always do what is right and just. Not what is expedient 🙏 We really enjoy all your posts

[DeliverAlpha @AlphaDeliver]

@mamboitaliano__ 12/10 😋

[Sonali Basak @sonalibasak]

In all my travels covering the world’s top investors — most of them had a single practice each morning. And it’s really simple.

✔️ check equity futures

✔️ check the 10 year & 2 year

✔️ check how overnight markets performed

✔️ check in again for the close

Keeping it simple sometimes helps. Try to keep an eye on FX and oil markets. Maybe eye Bitcoin too. Howard Marks simply wrote down where the SPX ended each day during Covid on a lined notepad. It’s how he kept a close eye on the trends.

[Lazy Canadian Entrepreneur @JimChuong]

The reason the rich live better than the poor and middle class is because, at no point in their life, is their biggest asset their principal residence.

And the more unaffordable a principal residence becomes the more important it is to follow this rule.

[DeliverAlpha @AlphaDeliver]

@KobeissiLetter And all the Gulf states are sitting there, like donkies, with no retaliation towards Iran whatsoever? Iran actively trying to destroy everything Dubai has spent decades trying to become and they do nothing? Iran needs to understand they're making a lot of enemies

[DeliverAlpha @AlphaDeliver]

@JShamess Check the equity charts of FCR, REG, FRT, etc, etc.. Chugging along, quietly breaking out of their previous ranges...How much of this has to do with a current lack of new supply due to a previous crisis? Question is, does the same portend for another RE sub sector in the future?

[Lazy Canadian Entrepreneur @JimChuong]

Living in a $500k home with $2m invested: happiness.

Living in a $2m home with $500k invested: misery

[DeliverAlpha @AlphaDeliver]

@jimiuorio And how long before this gets reversed? ..
How many countries have kept their wealth taxes, for an extended period of time?

[DeliverAlpha @AlphaDeliver]

@GrowingUpItalia CAFFETIERA!!! 😉

[DeliverAlpha @AlphaDeliver]

@DividendGrowth This is absolutely wonderful 👌 Thanks for posting (as usual).

[DeliverAlpha @AlphaDeliver]

@KeithMcCullough Where's @RealJimChanos when you need him? 😂

[Diane Swonk @DianeSwonk]

Navigating a global trust deficit

Trust is quite literally the oil of the market machine. High levels of trust act as a lubricant, enabling even the simplest tractions to move forward with little costs. Low levels toss sand into the gears of the market machine.

An entire industry has emerged to measure it. The results are ugly. Trust is on a multi-decade downtrend. It is global and starts at the top. Our collective trust in our national governments and the media have deteriorated sharply. The result has left us collectively retreating into our own echo chambers, sowing the seeds of deeper divisions.

The economic consequences of an erosion in trust have been well studied:

1) Transaction costs spike. Every handshake that used to suffice now requires a legal team and a binding arbitration clause. That's friction, and friction slows growth. One can see this is the reshuffling of supply chains.

2) Investment horizons collapse. Capital flies to the safety of short-term treasuries & gold - assets you can see & touch. Investment in factories, R&D, and worker training dries up. The AI boom is papering over a deficit in investment elsewhere.

3) Low trust means higher transaction costs, less competition (people preferring local/familiar suppliers even at higher cost), and broken supply chains.

4) Central banks lose their inflation-fighting crediblity, which further stokes inflation. We tend to get the inflation we expect and consumers expect a lot more than they did before the pandemic.

5) Cash transactions accelerate, which means that affluent households do better than less affluent households. Afforabilty deteriorates, which further undermines trust. Inflation is a regressive tax.

6) Worker mobility drops. Only the affluent can afford to move for a job, which erodes the efficiency of the labor market along with an unwillingness to work in more diverse teams and chips away at productivity.

7) Economic growth becomes more concentrated in the hands of a few firms and households, which takes a toll on the potential for the economy grow over time.

8) Financial instability intensifies. One spark - another pandemic, a geopolitical shock, an AI-driven market dislocation - and we could see a destabilzing market correction.

9) Nationalism floureshes. Countries turn inward, which adds to friction in supply chains & trade. That adds to costs & ups the risk of cold & wars.

10) The erosion in trust starts out incremental, but builds. It is nonlinear in its effects.

There are offsets. Firms are doing more with less, although the boost to productivity growth associated with AI is more of firm specific than economy wide. Deregulation has accelerated, which lowers hurdles to doing business.

Deregulation is not the same as no regulation and electorates with trust deficits demand more regulation. The pendulum could swing. In the interim, break bread not ties. We are social creatures, which crave connection; that begins one conversation at a time.

[DeliverAlpha @AlphaDeliver]

@sciencegirl The Adams Family lives there

[DeliverAlpha @AlphaDeliver]

@unusual_whales The admin has abused its power and now has leaders scrambling to do business with anyone else, SPECIFICALLY to diversify their risks away from economic powers. This will inevitably have lasting unintended consequences. A world with less trust between democracies is more dangerous

[DeliverAlpha @AlphaDeliver]

@MPelletierCIO He doesn't know what Carney is doing? The PM isn't sitting around like a stooge waiting for his over Lords to dictate terms for his people. One should never rely on the kindness of others. This admin preys on the weak. Don't be weak

[DeliverAlpha @AlphaDeliver]

@SantiagoAuFund Looks like the view from a room at the Fairmont? Amazing city 😎 Enjoy

[DeliverAlpha @AlphaDeliver]

@annmarie Let's not minimize the impact of Mark Carney's speech in Davos. Other world leaders, who are decent people, that represent decent people and democracy, might begin to push back about constantly being maligned, as awful/stupid people....This episode will hopefully be short lived.

[DeliverAlpha @AlphaDeliver]

@business @lisaabramowicz1 They asked Nutlick if insulting people was a productive way to negotiate. So, naturally he answered by insulting Mark Carney 🤦 Incredible.

[DeliverAlpha @AlphaDeliver]

@DianeSwonk Beautifully detailed, concise post. Thank you... Although, I'm not sure you're allowed to say these things out loud 😂
Always look forward to your thoughts