Real Estate Observer

So Tangible

[Real Estate Observer @RE_Observer_1]

@realEstateTrent I think also easier to raise capital in your home market - LPs like the story. Which encourages sponsors to stretch for these deals.

[Real Estate Observer @RE_Observer_1]

@jayparsons I’ve been surprised at some of the suburban / secondary markets where condos have worked. Lot of wealthy boomers want to downsize into a managed building near their kids.

[Real Estate Observer @RE_Observer_1]

@CoyDavidsonCRE It’s extremely fun you should try it

[Real Estate Observer @RE_Observer_1]

@PinkPoloShorts “But what if I get a 25% IRR on a really big institutional deal” - every sponsor ever

[Real Estate Observer @RE_Observer_1]

@ChadGriffiths If this come to pass it won’t be the owner’s problem (developer + PE). It also won’t be the lender’s problem (debt fund). But it will be a huge problem for whoever is lending to that debt fund (regional bank).

[Real Estate Observer @RE_Observer_1]

@realEstateTrent Corporate attorney partners (and associates) are always tending to their clients. Vacation or not. No different than entrepreneurs

[Real Estate Observer @RE_Observer_1]

@patefortworth Yup middle tier is in trouble. Megafunds are investing in other funds more and more through secondary businesses, which are growing fast. But none are really making primary commitments - even they can’t raise $ for that

[Real Estate Observer @RE_Observer_1]

@patefortworth This is dated thinking. The mega funds (BX, Brookfield) are buying entire vertically integrated REITs and platforms, becoming vertically integrated themselves. But the next tier of funds ($1-2B) are too small for that and still have double promote - and cant raise $ because of it

[Real Estate Observer @RE_Observer_1]

@TheRealEstateG6 Looking at it on an NOI basis in scenario 1 but on a value (ie capped NOI) basis in scenario 2 is misleading. You can make your point without contorting the math Mr. God

[Real Estate Observer @RE_Observer_1]

@HighyieldHarry Some will survive as specialists with stagnant AUM, some will be acquired by bigger firms with more capital than deals, some will die. Happened to hedge funds over last 10 years and now happening to privates

[Real Estate Observer @RE_Observer_1]

@BarryRoland19 Control over leverage and exit. And some private owners can create real operational value in certain property types. But vast majority can’t.

[Real Estate Observer @RE_Observer_1]

@bobbyfijan Population inflows / favorable demographics + housing shortage pushed rents up…it wasn’t the unit changes. Everyone has a story of “getting underwritten rents without putting the $ in” - that’s proof imo

[Real Estate Observer @RE_Observer_1]

@resetbasis PE still being picky so have to have something unique. And class C distress is not unique right now…at all. Not supporting it just how it is.

[Real Estate Observer @RE_Observer_1]

@DailyREITBeat Think you’re conflating investment M&A (like the BX deal) with strategic M&A (Artemis / Bridge deals). Very different underlying drivers for these.

[Real Estate Observer @RE_Observer_1]

@PaulSkallas Maybe this isn’t a bad thing. Dunks, 3s, and home runs are fun!

[Real Estate Observer @RE_Observer_1]

@resetbasis I’d argue you could add 3-4 more Xs on here…

[Real Estate Observer @RE_Observer_1]

@LeylaKuni This math makes no sense. If you have 150 bps of positive leverage you stabilize at an 8% YoC your CoC should be in the double digits.

[Real Estate Observer @RE_Observer_1]

@bobbyfijan Case for modular is rough. Not cheaper, lenders hate it, adds risk on the build. Hard to see how it becomes widely accepted any time soon.

[Real Estate Observer @RE_Observer_1]

@TheRealEstateG6 67% LTC and 1.16x DSCR w/ 6% rate…who’s your lender??

[Real Estate Observer @RE_Observer_1]

@credealjunkie Incentives here are…terrible? If you buy for $100 and sell for $100 4 yrs later you pocket $20 (plus fee) and your LPs get $80 (20% loss). Cmon.