Read on Twitter
"You will see a faster recovery, I think, than most people believe".
The best synopsis of COVID's impact on CRE & a look into 2021: the @theFORTpodcast with @SpencerGLevy.
Here's what you need to know
The best synopsis of COVID's impact on CRE & a look into 2021: the @theFORTpodcast with @SpencerGLevy.
Here's what you need to know
1/ Macro Level
Another $1T on the way from Uncle Sam
+
Pent up demand
+
Vaccine roll out
=
Faster recovery than most believe
Another $1T on the way from Uncle Sam
+
Pent up demand
+
Vaccine roll out
=
Faster recovery than most believe
2/ Micro Level
Office & Multi were tremendously oversold.
The hardest hit sectors will bounce back the fastest.
People make irrational decisions in the heat of the moment.
Vaccine rollout will bring us back to normal.
Office & Multi were tremendously oversold.
The hardest hit sectors will bounce back the fastest.
People make irrational decisions in the heat of the moment.
Vaccine rollout will bring us back to normal.
3/ Future of Office Space
Will be a want, not a need going forward.
Big $$$ thinks office is coming back strong.
However, office leasing is still way down and will continue to be until further price discovery.
Will be a want, not a need going forward.
Big $$$ thinks office is coming back strong.
However, office leasing is still way down and will continue to be until further price discovery.
4/ Future of Retail
Grocery anchored centers aren't going anywhere.
"Four wall" big box will heat up.
These stores will evolve into the hybrid future of retail:
• Retailer
• Distribution
• Services (Think GeekSquad)
Grocery anchored centers aren't going anywhere.
"Four wall" big box will heat up.
These stores will evolve into the hybrid future of retail:
• Retailer
• Distribution
• Services (Think GeekSquad)
5/ Regional Malls
Most are toast! Must adapt or die.
Two main paths to survival:
• Industrial distribution
• Hybrid mini cities: true live, work, play urban suburban environments.
Most are toast! Must adapt or die.
Two main paths to survival:
• Industrial distribution
• Hybrid mini cities: true live, work, play urban suburban environments.
6/ Distressed Properties
What distressed properties?
Too much cheap $$$ (and new at that) chasing distressed deals.
Lenders looking to foreclose will be met by unsympathetic bankruptcy courts after the year that was 2020.
What distressed properties?
Too much cheap $$$ (and new at that) chasing distressed deals.
Lenders looking to foreclose will be met by unsympathetic bankruptcy courts after the year that was 2020.
7/ On Flee From Big Cities
Back up the truck! They will be back.
Comes down to unparalleled:
• Talent
• Abundance of opportunity
• Live, Work, Play
• Great infrastructure
• Capital is already there
Cost of doing biz there is high, but offset by unmatched talent pool.
Back up the truck! They will be back.
Comes down to unparalleled:
• Talent
• Abundance of opportunity
• Live, Work, Play
• Great infrastructure
• Capital is already there
Cost of doing biz there is high, but offset by unmatched talent pool.
8/ Overlooked Markets
Follow the infrastructure $$$.
He loves:
• Nashville
• Kansas City
• Tampa
• Orlando
Must have tons of direct flights to attract big league commerce.
Follow the infrastructure $$$.
He loves:
• Nashville
• Kansas City
• Tampa
• Orlando
Must have tons of direct flights to attract big league commerce.
9/ Technology
AI/Automated analyst-type work is coming & will disrupt.
Last-mile transportation (scooters, self driving cars, etc.) will expand the value of traditional CRE constrained by location.
AI/Automated analyst-type work is coming & will disrupt.
Last-mile transportation (scooters, self driving cars, etc.) will expand the value of traditional CRE constrained by location.
10/ Evolution of CRE
CRE is no longer a "box of bonds".
The operational intensity of CRE has never been higher.
In part explains the cap rate compression of traditionally riskier assets such as hotels as investors hunt for yield.
CRE is no longer a "box of bonds".
The operational intensity of CRE has never been higher.
In part explains the cap rate compression of traditionally riskier assets such as hotels as investors hunt for yield.
11/ 2021 Outlook
Pain will go away after vaccine rollout.
Capital markets are slowly healing.
Office leasing volume to return in ~July once everyone's back in the office.
Things will slowly pickup in first half of 2021, then materially ramp up in second.
Pain will go away after vaccine rollout.
Capital markets are slowly healing.
Office leasing volume to return in ~July once everyone's back in the office.
Things will slowly pickup in first half of 2021, then materially ramp up in second.
12/ Listen to the full episode.
If you enjoyed this thread, you'll love the full episode.
Listen to the full episode with @fortworthchris and @SpencerGLevy here: https://open.spotify.com/episode/48QcHaNcwgaY4wTZwtCUNa?si=JDFiRRqvTCCpNsKDx-8vRg
If you enjoyed this thread, you'll love the full episode.
Listen to the full episode with @fortworthchris and @SpencerGLevy here: https://open.spotify.com/episode/48QcHaNcwgaY4wTZwtCUNa?si=JDFiRRqvTCCpNsKDx-8vRg
13/ Fun fact, I saw @SpencerGLevy speak at the 2018 @BergstromCenter Trends & Strategies Conference.
It was nothing short of a Tim Cook new iPhone launch.
I still have my notes from his fantastic presentation.
It was nothing short of a Tim Cook new iPhone launch.
I still have my notes from his fantastic presentation.
