Recapping the past decade and insights into the next one

What were the biggest takeaways since 2010 in the real estate industry? the rise of co-working?
most radical changes such as technology? the rise of industrial and death of retail?

and what would you bet will occur in the next decade?

 

This, equating to the dramatic decrease of yield spread for everything from debt constant vs. cap-rate, stabilized YoC vs. disposition cap-rate, and going-in cap-rate vs. stabilized cap-rate. I think those buyers which purchased true core deals 3-5 years ago with an endless hold strategy will end up doing far better from an absolute return standpoint than the value-add space right now despite the drastically higher risk as they start refinancing at ridiculously low rates.

 

I would say the Death of the Cycle.

I'm wrong but it might take a while to prove it. The increased sophistication of real estate investors/lenders has muted CAP Rate volititly. With low rates/yeilds, the establishment of Real Estate as a sector, and the bondogles of capital in investors hands right now, there isn't a good reason for CAP rate volititly. Furthermore with the gaurd rails on banks, lenders aren't throwing gas on the fire which has ultimaley led to slow and steady growth "cycle."

I have yet to see a project break ground that l thought what the hell are they thinking. All the dum money in RE got cleaned out in the GR and now its full of Pension funds looking for 5% yields.

“Capitalism: God’s way of determining who is smart and who is poor.” Ron Swanson
 
RE Pirate:
I would say the Death of the Cycle.

I'm wrong but it might take a while to prove it. The increased sophistication of real estate investors/lenders has muted CAP Rate volititly. With low rates/yeilds, the establishment of Real Estate as a sector, and the bondogles of capital in investors hands right now, there isn't a good reason for CAP rate volititly. Furthermore with the gaurd rails on banks, lenders aren't throwing gas on the fire which has ultimaley led to slow and steady growth "cycle."

I have yet to see a project break ground that l thought what the hell are they thinking. All the dum money in RE got cleaned out in the GR and now its full of Pension funds looking for 5% yields.

Where the hell are you located? I'm in NYC and every other deal I see I think "what the hell are they thinking?" And then I remember that the Sponsors are going to syndicate out all their equity, take a fat fee, and maybe a little of back-end upside. So I guess it's LP money which seems crazy.

And anyone who starts talking about "the death of the cycle" is the first person to take it up the ass when times change. Shit always hits the fan. Always. As long as humans are irrational (aka human), there will always be fuckups and those fuckups will always cascade.

 

I noticed more racial diversity and more women in commercial real estate over the past decade; it’s creeping up the ranks. Granted I live in SF so there is more diversity in general. I believe the diversity of capital sources into US real estate is also a factor in the diversification of the workforce. Whereas capital might have come from NYC mainly now it comes from many more places; the impacts the allocators which impacts the operators, etc. Also the “institutionalization” of the industry leading to hiring the most qualified person on paper vs nepotism, for more firms.

Have compassion as well as ambition and you’ll go far in life. Check out my blog at MemoryVideo.com
 

On-campus business school (Undergraduate or Grad) interest in real estate careers has not hit the peak I saw in 2007; just from my observations in the Bay Area. A lot of competing opportunities.

I believe as an economy and industry we rely on a growing population. I’m interested in how immigration will be impacted. Domestic migration patterns will be something to watch. Deflation will be bad if that occurs. Moderate inflation is good.

Have compassion as well as ambition and you’ll go far in life. Check out my blog at MemoryVideo.com
 
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