Michael Phillips

Maybe it’s just noise

[Niall Ferguson @nfergus]

This seems like the correct rebuttal. https://t.co/BiLpS6qLdh

[Jim Harte @Msccamp]

Thread
1/9
2025 Loci Capital Champions League is over. Thanks Tampa Bay Rowdies-led by club President Ryan Helfrick-for hosting a grand occasion in downtown St. Petersburg at Al Lang Stadium. First class!
Girls: Newsome 7, Eastlake 1.
Boys: Palm Harbor 3, Jesuit 2.
@scuffedpod

[Michael Phillips @LC_aucoin]

@kbpwil What an emotional and excellent game! Congrats to PHU!

[Michael Phillips @LC_aucoin]

@DallasAptGP This is correct, but may overstate the role of debt funds. Banks are behaving the same way as they have reduced pressure from regulators to mark their books / clean their books vs the GFC and RTC mass default events.

[Michael Phillips @LC_aucoin]

@xwanyex Sure but the Manhattan Institute’s message is the message of every good parent to their child. It is the message of vibrant civilizations and the evolution of successful societies. It is the best message, because it is the truth. The truth can be hard to accept.

[Michael Phillips @LC_aucoin]

posted by accident a little early. Back to the second, making it us vs them seems to beg a fight - a statement made to provoke a feeling of being screwed by the bottom 20%. Provoke anger. Maybe, I'm misreading you here. On the third, we are all needy during our lifetime and at risk of being needy from uninsured /uninsurable circumstances. We are all also part of families with people who are in the bottom 20%. Contributing to the bottom 20% is a pay it forward / pay it back program that seems logged in the altruistic component of our DNA.

I'm trying to think of what part of the bottom 20% isn't subject to context and time. I thought maybe violence, but that is still mostly committed by young men. I haven't been in a fight since my teens. And when I play pick-up sports now, I think fouling/hacking is
tantamount to assault.

[Michael Phillips @LC_aucoin]

Possibly because it's just the 80/20 rule looking at the bottom. Possibly because the framing is exclusionary - we versus the bottom quintile - and seemingly merely provocative. Possibly because it ignores the obvious contextual and temporal fluidity of the 80/20 rule. On the first, you flipped the pareto 80/20 rule to focus on the worst performers vs the usual focus on how progress comes from the top 20%. I guess that's interesting. On the second, your framing ignores that all people are in the bottom 20% for some time of life and in some component

[Michael Phillips @LC_aucoin]

@jayparsons Here's Grok's longer response. I'm still learning how to put Grok in a tweet.

https://t.co/oy1iyFTerN

[Michael Phillips @LC_aucoin]

@jayparsons @grok @grok
Why did investors "get burned" investing in NY rent stabilized housing over the last 10 years?

[Michael Phillips @LC_aucoin]

This was because the gov changed the laws reducing both predictable rent growth and the return on value-add cap-ex to negative / zero. This law will likely lead to massive deferred maintenance as the years pass. It is sad.

@grok Why did investors "get burned" investing in NY rent stabilized housing over the last 10 years.

[Michael Phillips @LC_aucoin]

@P_Linneman Inflation print today on shelter looks quite promising

[Peter Linneman @P_Linneman]

We will be joining Willy Walker for the finest hour in commercial real estate on Wednesday, April 16th at 12:30pm EDT. This time we will be discussing tariffs, the Trump administration, inflation rates, and much more. Click the link to register:
https://t.co/UqZiPC3DaT

[Leyla @LeylaKuni]

2/❗️The biggest risk in private placement is counter-party risk.

I know GPs who have seemingly favorable terms and yet still take LPs on a ride.

Inversely, I know GPs who bend over backwards to fix things that went wrong, even if they aren’t obligated to do so by the LPA.

[Matti Viren @viren_matti]

@JohnHCochrane BtW, how does the old story where Paul Volcker/FED killed inflation match with the recent data from Argentina (graph from Reuters):

[MoFutbol 🎙️⚽️ @Mo_futbol]

@Msccamp as a mentor and ⚽️ OG is a true blessing! 🙌✨ , Thank you @STLchampsleague

[StripMallGuy @realEstateTrent]

Really interesting quote from Blackstone’s Jon Gray:

“The big driver of inflation in the data is shelter costs, and the reality we see in our portfolio is much lower than the 4.6% that the government’s (reporting), with a lag. And that’ll help pull things down. Should ultimately give the fed some air cover to lower rates over time”

Let’s go !

[Michael Phillips @LC_aucoin]

@realEstateTrent think you may be conflating interest rate change effects on discount rates (cap rates) with inflation. They offset each other. Numerator (NOi) up so denominator (cap rates) up.

First, Inflation is baked into rents (contractual rent bumps) and eventually mark to market. Note how with higher inflation we are now negotiating for larger rent bumps. So NOI up due to inflation. That is the point of the meme.

Second, Real estate rent growth is a combination of inflation due to currency devaluation and change in local supply/demand. As investors we want the latter not the former, as this accretes real value growth. But - as you point out- if it is the former it’s not real growth, so…

Third, interest rates rise reactively to higher inflation (currency devaluation type) resulting in higher cap rates and offsetting NoI gain.

The end result would be higher nominal value but zero change in real value.

That is Unless the change in interest rates increases or decreases the real rate (inflation adjusted). If rates increase less than inflation, then value is up in real dollars. If rates increase more than inflation, value is down in real dollars. The last 24 months have been an increase in real rates, which has hurt our balance sheets in real dollars.

[Michael Phillips @LC_aucoin]

We’ve built 20 so far. With our partner @BSpottswood. Mostly in the FL Keys. I agree with Taylor’s assessment. Nonetheless, this is a topic of debate for us. We don’t follow this advice exactly. The reason is most buyers of str properties are second home buyers. We believe these buyers still want options/elements consistent with potential long term living for their personal use.

[Jay Parsons @jayparsons]

Let's dissect a column in today's @WSJ headlined, "The U.S. Has More Fancy Apartments Than It Is Able to Fill," followed by a sub-headline saying developers "have built a glut of high-end properties instead of badly needed affordable housing."

Is it that simple? Let's jump in.