Trey Wheeler

Founder, MultiScreen • Author, The Multifamily Download • Daily Real Estate Content

[Trey Wheeler @TreyWheeler]

Sunday thought:

WHERE you are is not WHO you are.

[Trey Wheeler @TreyWheeler]

Read the full version in this week's TMD 089, including the macro backdrop: https://t.co/iJsnOtKA9S

[Trey Wheeler @TreyWheeler]

The Fed is hiking again, on the heels of the 2022-23 cycle.

AI capex is soaking up the bond market, CPI is still above 2%, and the bid-ask gap in multifamily will probably get wider before it closes.

A lot of folks in the Multifamily sector are facing the same choice right now:

Persist or pivot.

It feels like a precarious moment for multifamily and CRE broadly.

Some people argue the hikes are themselves inflationary (Richard Werner has written about this for years, and Bill Ackman raised a version of it this week).

Agree with the Fed or not, it's the reality we have to operate in.

The part I'm watching closest is the bond market.

It's absorbing AI capex financing at a scale it's never seen, while fiscal policy gets scrutinized ahead of the midterms.

If that keeps pushing yields up, it runs into CRE capital flows, then cap rates, then values. A lot of owners are going to feel real pain before a healthy transaction market comes back.

What helps me in moments like this is perspective.

Neither good times nor bad times last forever, and how we respond to the market in front of us is what ends up defining us.

I've made this persist vs pivot calls many times in my career.

I started in multifamily investment sales three months before COVID shut everything down and closed just one deal in 2020.

I persisted, and 2021 and 2022 were far better.

Then, in May 2022 I could see the Fed's rate hikes were about to stall seller volume in my markets, so I pivoted to the principal side of the business.

Neither answer was right by default.

Each came from an honest look at where I was, where I wanted to go, and how the road from here to there could unfold.

That's the evaluation worth doing right now, and only you can do it for yourself.

If you're feeling stuck or defeated by this market, DM me and I’ll do my best to help however I can.

[Trey Wheeler @TreyWheeler]

My full breakdown of the August Yardi data, plus what I think the Fed does this week in my recent edition of "The Multifamily Download" newsletter.

Read it here: https://t.co/ZbEUppyb5t

[Trey Wheeler @TreyWheeler]

Baltimore lost 2.5% of its jobs and rents are up 1.1%.

Austin added 1.2% and rents are down 2.8%.

Jobs aren't setting rents right now. What is:

[THREAD]

[Trey Wheeler @TreyWheeler]

Yardi still forecasts Austin at -3.9% rent growth by year end, Phoenix -2.8%, Denver -2.4%.

San Francisco +3.9%. New York +3.7%. Chicago +3.1%.

Supply peaking and rents recovering are two different events. The gap between them is where deals get mispriced.

[Trey Wheeler @TreyWheeler]

Uncertainty is not something to be feared or avoided. In fact, it’s often the opposite. Uncertainty has a way of bringing us clarity regarding what we want, why we want it, and what we’re willing to do about it. Do the inner work to go from uncertainty to clarity. It’s worth it.

[Trey Wheeler @TreyWheeler]

Life is not linear. Peaks and valleys, setbacks and comebacks, and the only common denominator is YOU. Remember, you must take you with you everywhere you go. So become the BEST YOU that you can. You got it?

[Trey Wheeler @TreyWheeler]

In Multifamily, cap rates and values are determined using the NOI. Use this free cap rate calculator to find the unlevered yield (I.e cap rate) that the property generates at any given price.

https://t.co/UwyozhCSB5

[Trey Wheeler @TreyWheeler]

Full write-up in this week's TMD 086, on the future of work and what it does to Multifamily org charts:

https://t.co/fPbfMWWKd4

[Trey Wheeler @TreyWheeler]

Second piece: creator-led companies are pulling away from silent-CEO companies.

A CEO who makes the calls, works across verticals, and publishes publicly has full context. Full context means fast, high conviction decisions. Siloed firms can't match that speed.

7/9

[Trey Wheeler @TreyWheeler]

I built https://t.co/FdJryOiHIQ for this reason. Underwrite more deals, send more LOIs, get numbers to investors faster.

The software was never the point. Touching more of the business myself instead of hiring around the gaps was the point.

8/9

[Trey Wheeler @TreyWheeler]

Fewer people per operating company, and each one a skilled generalist instead of a niched specialist.

The analyst who lives in spreadsheets goes first. The head of capital formation who golfs all week goes next. The metric becomes revenue per employee.

6/9

[Trey Wheeler @TreyWheeler]

Efficiency is more output from the same or fewer inputs.

Optimization is doing more of what's already efficient so the gains compound.

Run both at once and you get a loop. That loop is what reshapes multifamily operating companies.

5/9

[Trey Wheeler @TreyWheeler]

The ChatGPT moment was under four years ago. Jensen Huang is already calling OpenAI's Astra the arrival of AGI.

I doubt that ends in mass unemployment and UBI. I think it ends in an efficiency and optimization game.

4/9