@Vinny_Daniel0@BreakingCRE@rhunterh This idea definitely works in concept when it comes to allocating marginal dollars to real estate (e.g. choosing to put new dollars in REITs when theyโre cheaper, and priv RE when thatโs cheaper) but actually reallocating money according to NAV premiums a much different endeavor
@unnamedleftist Sucks to say but I think itโs the other way around. What canโt be sustained are energy bills heading higher than rents in Europe. Putin is fighting an economic war in Europe, rather than a combat war in Ukraine.
@RE_Ari18@moseskagan Cap rates are markets pricing risk AND growth, not just risk
By definition cap rate is r - g where r is discount rate (risk) and g is long term growth rate
@RansomReed67@NayelySpring910@Seanmostrander@ScottSeiss In ANY market which is as supply constrained as housing in the US, if demand goes up, prices must also go up.
If you remove the limitations to creating more supply, then youโre argument starts to make a lot of sense. But the fact of the matter is that those limitations do exist
@RansomReed67@NayelySpring910@Seanmostrander@ScottSeiss Yea but how does Amazon increase in size and profitability? Thereโs two ways - sell more supply, or raise prices.
MASSIVE limitations to increasing housing supply, and therefore increasing demand will necessitate higher rents
Those higher rents cause the house to appreciate