Operating at the Intersection of Technology and the Capital Markets
Tag: CRE
Here is hoping that the Federal Reserve allows the Office segment of the CRE market to crash. The Office sector overbuilt circa 2011 through last year as rates were low and deep-pocketed investors were flush with cash. I recall the skyline changing across cities such as Washington D.C/ Northern VA, Boston, New York, San Francisco … Continue reading CRE Office Property Value Reset
Thursday at 4:30pm ET we will get an updated view of the Fed's Balance Sheet after last week's record Treasury runoff ($49.7 billion). There is more tightening to come not only from the Fed (despite its bank bailout), but from commercial banks. As commercial banks tighten lending standards, they shrink the money supply. The bad … Continue reading More Tightening & Pain To Come
The Fed is already doing back door Quantitative Easing (QE) as a result of weakness in the Banking sector. What if CRE defaults were to accelerate? With high Office vacancy rates and $3.6 Trillion in CRE debt outstanding, there ought to be plenty more defaults in 2023. Earlier this month Blackstone defaulted on $562 million … Continue reading CRE Debt To Break The Fed?
Given that Tech layoffs have ramped higher each quarter since Q3 2021, I don't see how Tech is an investor safe haven. Q1 2023 is the worst quarter yet in terms of the number of employees laid off and it could get far worse from here as this credit crisis will be more severe than … Continue reading Tech Is No Safe Haven
Short-term Treasuries look attractive. The 1-month T-Bill offers a 4.67% yield. Beats cash and beats holding an equity index fund or ETF. I'm always a fan of owning Quality companies at an attractive price. However, I don't value equities as most investors do - I don't bucket stocks into "Value" "GARP" and "Growth" buckets. I … Continue reading Short-Term Paper, Quality Names and Gold
2023 is shaping up to be a tough year for the CRE and Housing markets as interest rates remain elevated. When I think of the pension funds that own CMBS debt I shudder. Pension funds that invested in alternative asset classes over the past 20 years will have to mark down their books for the … Continue reading 2023 Won’t Be Pretty For CRE & Housing
Office vacancy rates have not recovered to pre-COVID levels and will likely go much higher as job losses mount and as companies work to reduce expenses. San Francisco and New York City have seen vacancy rates spike over the Q1 2020 - Q3 2022 period (see first table below), while many major metro areas have … Continue reading Office Vacancy Rates Are Going Higher
The grow-at-all-costs venture capital culture of the past 20-plus years ruins companies. How? Far too much focus is placed on revenue growth at the expense of sound operations and profitability. Too many venture-backed companies grow at a pace that far outstrips those companies' ability to scale operations in a manner that supports growth. The result … Continue reading VC Culture Ruins Companies
Director & Officer ("D&O") insurance premiums spiked and coverage narrowed last year as a result of COVID-19. As vaccinations are distributed COVID-related underwriting risk will begin to soften which will be reflected in lower premiums and broader coverage. All of this is to say do not expect every mid-to-large-sized company to be fully back to … Continue reading Back To The Office Will Look Different Compared To 2019
For our inaugural CEO Hall of Fame class we selected CEO Hall of Fame members largely based upon their contribution toward building their respective companies as well as creating long-term shareholder value. Our selection process included a variety of quantitative and qualitative elements including financial operating performance, total stock returns, longevity, innovation, corporate governance and … Continue reading The CEORater CEO Hall of Fame Class of 2020
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