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There is NOT a lot of upside in real estate right now. There is actually a significant amount of disequilibrium. Once the delinquencies start to gain momentum, the US consumer will not be in a good place. This has implications for banks, homebuilders, and a lot of MBS securities. And the worst is yet to come. #bearish #reallybearishbro #doyouevenbearbro
Taking the Growth versus Value Trade in Equities and applying to Real Estate
Growth think logistics / last mile / data centres / life sciences / dark kitchens (traditional alternatives)
Value think Hotels / Care Homes / Flagship Retail
For Bond comparisons think - Residential (Multi-Family / Build to Rent) and Offices with long dated leases to strong covenants
For structural decline think - Retail / Shopping Malls / Secondary tired offices
And just like with @Raoul Pal 's thesis - those sectors with tailwinds have access to cheap and liquid sources of debt, those with headwinds conversely are seeing the 'taps' turned off.
Direct Real Estate is slow to re-price but fund flows and the eventual repricing is a great bell-weather for the real economy and the intersection with the financial markets.
Look to the leading Real Estate PE Funds and where they are deploying their capital - firms like Blackstone call the markets right a lot more often than not... and when they have conviction they go in hard.
BNL just went public at a down round of about 20% from when it was private. Over the life of their REIT they have collected a very impressive percentage of rent. Internally managed NNN REIT with a variety of property types spread out all over the US. Might be worth a look
At the end of the interview, Mike and Jim Talk about analysts not being trained too well by the older gen.
Mike even asked:
Is there anywhere else that people could turn if they wanted to gain access to some of your materials or insights?
to which Jim said "no not really".
However, Jim used to teach a course at Yale called " Financial Fraid Throughout History" he must have forgotten or there is another Jim Chanos that looks just like him that walked around the Yale Campus. 🤷♂️
Here is the course overview pdf with all the required reading of that course per class session. Lots of the material is just one google search away so no need to have yale library access or other.
Have fun!
