Negative Leverage

As long as rates stabilize, I still see opportunity in T1 urban infill markets. Land prices will come down a bit, you'll need to rely on entitlement risk some more, but we've had three deals fall through because we couldn't find capital, so the lack of new starts means contractors are going to get nervous and pricing is going to come down. On a project that just broke ground we had two electricians walk from their bids because they had other work, which I find crazy because in 12 months they're going to be dead in the water, it'll be too late for this project but we'll squeeze them the next time around.

The most in-demand cities still need dramatically more housing, I think we'll see more YIMBY progress and upzoning in traditionally difficult markets which will unlock previously untenable land. Yes, this moment things are looking rough and we're in hunker down mode, but it doesn't need to get to three years out before opportunity comes around again. High interest rates alone won't discourage development, did no one develop real estate before 2001? It's the *rising* interest rate environment that's making it tough to forecast and plan ahead. Once the Fed stabilizes their hikes I think capital will come back out of the woodwork.