What should we be buying?

Long time lurker. Run a small family office with just shy of $1b aum mostly in value add multifamily but also have some exposure in other asset classes. It feels like nothing is penciling and its time to target something new or change our criteria and focus given every deal we see we are competing with 1031 buyers or dealing with unrealistic sellers. What would you do with $100m? Basis plays below replacement cost?  Pref equity? 

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You want to know what honestly is the best thing to do. Take that $100M and drop in the S&P 500 and call it a day. No Im being serious. Unless you're underwriting cap rate compression or huge rent bumps, nothing will work right now. Speaking of replacement cost, my old mentor said "Replacement cost only makes sense in markets where someone is willing to replace it." Otherwise if replacement cost is your thing, I got some buildings in Gary, Indiana that are amazing values. 

Sellers dont want to sell. Why should they? If they did, they'd end up in your shoes running around trying to find something. 

 

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