Opening Comments
My son, Jack, (freshman in high school) played in a minor-league golf event on Monday. The minor league is primarily for pro golfers who are trying to make it, but have not qualified on the bigger tours. They have a “Training Division” which is primarily for club pros or recent college grads and amateurs who want to compete, but are not ready for the full mini-tour challenge. All groups played from the same tees of 6,800 yards. It was a cool, crisp day. Unfortunately we never got out to access the course prior to the round, so Jack was flying blind. Jack shot a 74 despite not making any putts of consequence. It was good enough for a T-2 in the Training Division, losing by 2 strokes. However, Brad Miller who won it all shot 63, and the person who came in 5th with a 68 played in the US Open last year. Good job Jack, but we have a ways to go to compete with the pros. Here is a recent slow motion swing from Jack.
I ordered a new desktop with the help of Gene, a reader/engineer who built it for me on line through Xidax. The company assembles the computers after you pick which components you want. My computer will cost $1,300 and has a lot of power and memory. Separately, I ordered two 32” 4k monitors which cost $400/each. Thanks Gene. Much of this process was over my head, but was pleasantly surprised at the prices and the speed of the computer relative to my 10 year old dinosaur.
Today’s piece brought back great memories and I also believe it is full of fantastic news events. Hope you enjoy. Remember, some email systems truncate the report and you need to hit the link for more to see everything. Big R/E section today.
Picture of the Day-What a Bet!
Big Boy Voice
Quick Bites
Markets/Goog+/FB-, January Markets Summary (Good Charts)
SPACs Losing Steam, Venture Deal Pressure
GDP Slowing? US Consumer Sentiment (Good Charts)
Former Congress Members Lobbying for China
Adult ADHD
Collegiate School Mascot-407 Page Report
Other Headlines
Virus/Vaccine
Data
Lockdowns Ineffective-Johns Hopkins-Interesting Article
BA.2 Sub-variant
Olympics Impacted
Lab Leak Cover Up
Vaccine 6 Months-5 Years Old
Real Estate
General Comments
Companies Relocating to Florida-Milken Conference
Ken Griffin
NYC
Ritz Carlton Condos-Pompano Beach?
Rent Inflation
Ron Perelman Sells Hamptons Tear down for $84.5mm
Picture of the Day-What a Bet
A lucky gambler bet $20 and correctly guessed the score of both games for the playoffs on Sunday. The reward was $579,000 on the $20 bet. I believe the playoff games over the past couple weeks have been the most exciting I can remember. It would have been even more exciting if I had made this bet. Last year’s Super Bowl had over 23mm people betting over $4bn on the game. I have read it is projected to be higher this year as on-line gambling has taking off.
Big Boy Voice
I was very fortunate professionally to have been given opportunities, surrounded myself with great teams and had many bosses who believed in me. However, achieving success early and looking young gave me a bit of a complex about my youthful appearance. At one point, I tried talcum powder in my hair over the weekend and determined I looked like an idiot and realized it would be blatantly obvious to my colleagues, so I washed it out. I recall going to an interview in 1996 and walking up to the person while they stared at me in disbelief. The guy said, “There is no way you are Eric Rosen.” I confirmed I was Eric and was there for an interview and his jaw hit the floor. It was a common theme that people questioned my youthful appearance. Unfortunately, those days are long gone.
I was promoted to Managing Director at 28 years old at Chase, prior to the JPM merger and it came with internal and external exposure to more senior people.
I presume is from the fall of 2001 when I visited my sister in Chicago. I would have been a few months prior to my 32nd birthday. People thought I looked 24, not 31 and gave me grief about it.
Given I looked young and sounded young, I felt the need to look and sound older. At the time (1997-2002), I had a couple dozen people who worked with me. We were a tight knit group and had a lot of fun with some crazy practical jokes. We worked hard and enjoyed a good laugh. Initially, I did not do it intentionally, but when my assistant let me know a big wig was on the phone (Jimmy Lee, Warren Buffett’s Head Trader-Mark Millard, Oaktree’s Head Trader-George Leiva, Ron Perelman, Jeff Maillet…), I answered the phone with a far deeper voice. Apparently, my voice dropped a couple octaves and my team would go crazy with laughter. We were on a trading desk; no secrets as it is open and tight quarters with people right next to you. What started happening is when the assistant would announce an important person on the phone for me, everyone would hear and the team would chant, BBV, BBV (Big Boy Voice, Big Boy Voice). Those chants made me take it down a few more octaves and I sounded like Barry White.
What started off as me doing something unintentional became a fun joke where I would show off my vocal range for the team and sound like Tiny Tim for some people and Darth Vader for others. That time in my career, from 1997-2004 were some of my favorite periods for work. I had a great and very close team. We worked hard, but enjoyed a laugh and loved to prank each other. Unfortunately, many of the pranks are not for a family show and would be punishable by death today, but sure made for some big laughs. Once I was promoted to run Credit Trading (far larger business), the group dynamic changed and took a far more serious tone.
Now, I am tired and broken and no longer feel the need to appear older than I am. I wear my hair far too long to appear younger. My beard is like Santa Claus, and with my ailments I feel older than my age. I have worn a suit one time in 4 years and that was to a funeral. I am longing for the good old days where I was doing my hardest to look and sound older. Maybe I go Wayne Newton and get a little work done to bring back the look from 1997.
In a comical coincidence, yesterday, I moderated a markets discussion with a few experts from the equity (Peter Selman-Former head of equities from GS), credit (Steve Shenfeld-President of Mid Ocean) and venture (Jason Schuman-Primary Venture Partners) markets for the investing/networking group, 3i. One of the panelists, Jason, looked incredibly young and I made a comment about his youthful appearance. He is 30 years old and looks like he is 16. I was laughing, but kind of sad that I was the old guy, and he was the former version of me. This is the one hour markets panel video for those interested. A wide array of topics and perspectives. You won’t question which one is mini-me when it comes to looking young.
Wild grey hair and beard. About 20 years between the pictures. No need for the BBV anymore.
The one hour video summary topics below:
2:20-Is this the start of something more meaningful to the downside?
4:35-Model Portfolio. Lots of good data in this section.
10:15-How do you recommend people invest today?
11:00-Credit Market views.
17:15-Venture-Are you valuing opportunities differently due to the tech sell off and where is the big opportunity?
21:55-Does private equity step in due to go privates on beaten up companies?
24:45-YUC-Young Unprofitable Companies.
25:20-Energy. What happens when out of favor sectors get hot?
28:30-Growth stocks-Opportunity?
30:34-How to allocate a dollar today (venture)?
33:15-Interesting exchange with a viewer who is a big name in venture (Fabrice Grinda).
40:00-Private to Public multiples and are you begin rewarded in the private markets?
44:15-Market neutral credit strategies.
45:30-Loan ETFs
47:00-Speed Round with a bunch of short answers.
53:00-$1.7 trillion BBB bill. Will it pass?
Quick Bites
After a choppy start to the year, stocks rose for a fourth straight day Wednesday, as Alphabet propelled gains in tech thanks to strong quarterly earnings. The S&P 500 rose 0.9% to 4,589. The Dow jumped 224 points, or 0.6%, to 35,629. The tech-heavy Nasdaq Composite climbed 0.5% to end the day at 14,418. Alphabet beat on the top and bottom lines for the fourth quarter. The stock jumped in extended trading after the report Tuesday. The company also announced a 20-for-1 stock split. I will finish this after the close. Wednesday, Pay Pal stock fell 24% on weak guidance and cited inflation and 4.5mm “illegitimate accounts.” Also of note, after the close Wednesday, Meta (FKA Facebook) tanked over 22% on missed earnings and cited that challenges are ahead in the first quarter. Inflation, supply chain disruptions at advertisers and users shifting to products that “monetize at lower rates” are among the key issues the company faces. Revenue in the first quarter will be between $27 billion and $29 billion, while analysts were looking for that number to top $30 billion. The link is an interesting read about what lead to the disappointment and weak guidance. A couple big misses citing inflation is interesting from my perspective. Spotify has been in the news over Joe Rogan and musicians pulling off the service. Shares fell 9% after hours Wednesday after falling 6% during the trading day. Despite beating on top and bottom line, 1st Q guidance and the weaker tech market after Meta earnings brought the shares lower.
Jim Reid from DB puts out good daily research and I cite it from time to time. On Tuesday, he had a solid January summary of markets with a couple good charts.
S&P 500 -5.26% (-11.40% at the intra-day lows on 24th). NASDAQ -8.98% (-16.30% at lows). Euro Stoxx 600 -3.81% (-6.82% at lows). All in price terms. Full document link below has total returns.
10yr US treasuries +26.7bps (+39.1bps intra-day on 19th).
2yr US Treasuries +44.6bp (+49.2bps on 28th).
Fed hikes for 2022 up from 2.96 to 4.94 (5.06 high on last day of month).
10yr Bunds +18.8bps (closed month at the highs).
Brent Crude (+17.3%) and WTI (+17.2%) both seeing their strongest gains in 11 months. Former above $90 for first time since 2014.
Dollar was strongest G10 FX (+0.9% gain) after +6.4% in 2021. 18-month highs on 28th.
CDS: EU XO +40bps (+51bps at 28th wides). EU IG +11.1bps (+13.7bps at wides).
CDS: HY CDS +46.5bps (+57.5bps at 28th wides). US IG +10.5bps (+14.9bps at wides)
Bitcoin (-17.0%) fell for third month, joined by XRP (-26.5%), Ethereum (-27.3%) and Litecoin (-25.3%).
Covid: Up from 9.2m weekly global cases to 23.1m in January. Weekly global fatalities up from 44.1k to 66.6k. However, peak weekly number in pandemic before Omicron was a relatively low c.6m weekly cases but over 100k (confirmed) fatalities.
The oversaturated SPAC market is continuing to get crushed in the new year as speculative stocks with little earnings fall further out of favor in the face of rising rates, while a growing number of deals were abandoned in the tough environment. Companies that went public via blank-check deals have been among those worst affected by January’s tech-driven sell-off. Meanwhile, faced with unfavorable market conditions, many sponsors have been forced to scrap their proposed deals, sometimes even before the SPACs got listed. “The SPAC bubble is bursting,” said Chris Senyek, senior equity research analyst at Wolfe Research. “SPAC shares are extremely volatile due to their speculative nature.”
Great WSJ article on the volatile market impact on venture deals. The recent stock rout is rattling the multitrillion-dollar market for startups after a long run of record investments, nosebleed valuations and rapid-fire deal-making. Venture capitalists say a significant reset in investment behavior is beginning to take hold that is poised to reduce initial public offerings, leave some companies short of funding and crimp valuations. Investors say several large startup backers are cutting back their investments, curtailing a flow that sprayed at full blast for most of the pandemic, particularly for older, more mature startups. And venture firms say they are advising their companies to prepare to conserve cash in a tougher funding environment. Tiger Global Management, one of the most prolific startup investors of the last two years, in recent weeks has been renegotiating investments that had been under discussion for numerous companies, reducing the valuations, people familiar with the deals said. Venture capitalists say other investors are doing the same.
This CNBC article suggests the economy will be slowing down quickly. I do believe inflation will slow and it is more of a 2021 story. But I am not sure that the economy comes to a screeching halt as suggested. Spurred by a massive inventory rebuild and a consumers flush with cash, the U.S. economy last year grew at its fastest pace since 1984. Don’t expect a repeat performance in 2022. In fact, the year is starting with little growth signs at all as the late-year spread of omicron coupled with the ebbing tailwind of fiscal stimulus has economists across Wall Street knocking down their forecasts for gross domestic product. Combine that with a Federal Reserve that has pivoted from the easiest policy in its history to hawkish inflation-fighters, and the picture has sudden changed substantially. The Atlanta Fed’s GDPNow gauge is currently tracking a first-quarter GDP gain of just 0.1%.
This is a good WSJ article on consumer sentiment with many great charts. Consumer perception of current economic conditions in December was almost even with April 2020 levels, when sentiment bottomed out following the first major restrictions to control the coronavirus pandemic. While Americans’ feelings about their personal finances slid through much of 2021, concerns about buying conditions—amid continuing worries about inflation—fell drastically for much of the year. Household income has declined from spikes that occurred as the government distributed pandemic-related stimulus. Still, many Americans have seen wages and benefits increase, as the economy rebounded from earlier disruptions from the pandemic.
A reader sent me this article. I rarely use Breitbart as a source, but found the topic concerning enough to share as it calls out many politicians from both sides. Many lawmakers cash in after leaving office by becoming lobbyists for corporations and other special interests. But one would hope that they would not become advocates for America’s primary economic and political adversary — communist China — by lobbying for outcomes that run counter to the United States’ long-term interests. However, Schweizer’s book, Red-Handed: How American Elites Get Rich Helping China Win, reveals that many former congressional leaders, committee chairman, and rank-and-file members are lobbying for Chinese intelligence and military-linked companies. The following 23 former members of Congress — the majority of whom are Republicans — have lobbied for Chinese military or intelligence-linked companies. The article does not make us look so good in my eyes. They list the politicians and give details of the work they are doing. In the end of the day, the saying, “Follow the money” seems to be appropriate yet again.
I can tell you that having ADHD is something which is not incredibly easy to deal with at all times. I sure can climb the walls and being constantly injured does not help matters. This article on CNBC is entitled, “Adults with untreated ADHD ‘lose jobs more frequently,’ says NYU psychiatrist: Here’s what you need to know.” Given how pervasive ADHD is in adults, I thought the link would be interesting and informative. Millions of adults are undiagnosed and it is the second most neuropsychiatric disorder after depression. Adults with untreated ADHD are more likely to have a lower educational attainment, earn less money in the job, change jobs or lose jobs more frequently.
I believe Collegiate is one of the best schools in NYC. I have been impressed with the dozens of young men I have met who attended the prestigious school (all boys). However, just like many others, the wokeness has gone too far in my opinion. Manhattan’s elite Collegiate School set up a special task force and spent three years debating its “Dutchman’’ mascot and motto — then issued a 400-page report that’s a lesson in wokeness-run-amok, critics say. The Herculean effort at PC reform led the $60,000-a-year Upper West Side school to not only drastically alter its playful, winking mascot image — but also toss “God” from its motto and even “A.D.” from its seal, deeming both potentially offensive. “A lot of folks think the whole thing was just ridiculous overkill,” a parent told The Post. “Four hundred pages? For a mascot? A motto?” To me, it seems like far too many resources (17 person task force) were spent on this topic. I wonder how much money and time was spent on a school mascot. Would it not have been better served to write a 2 page report and give scholarship money to those in need instead? How many people can afford $60k/year? Welcome to the new world. I just wonder what the tipping point is when people realize the absurdity of the path we are heading. The school purposely covered the face as to not offend anyone about race.
Other Headlines
Just a ‘handful of weeks’ left to strike nuclear deal with Iran, official says
Majority of Americans want Biden to consider 'all possible nominees' for Supreme Court vacancy: POLL
Just over three-quarters of Americans (76%) want Biden to consider "all possible nominees." Just 23% want him to automatically follow through on his history-making commitment that the White House seems keen on seeing through. Personally, I am for having a slate of different people (men, women, Black, White, Hispanic…) and the best person should be brought for confirmation. Clearly an overwhelming majority of Americans agrees.
Trump advisers drafted more than one executive order to seize voting machines, sources tell CNN
Neither of the voting machine stories read well.
Gavin Newsom's claim about wearing mask at NFC championship contradicted by Rams 'fan cam'
Remember, Newsom was in hot water for dining in Napa without a mask. He forces his constituents to wear them, but he does not comply. Do what I say, not what I do.
This is a scary story. Teaching people how to build bombs and booby trapping your home to hurt law enforcement must be dealt with severe punishment.
77% tested at Baltimore High school read at elementary level, some at kindergarten level
Talk about a system failing the children.
Teachers Are Quitting, and Companies Are Hot to Hire Them
Businesses eager to fill jobs are offering former educators better pay and more autonomy. The WSJ article suggests over 1.3mm teacher resignations since 2020.
Roughly 47 million people quit their job last year
I was shocked at the number of people who quit, but to be fair, 42mm quit in 2019, another number I thought was high.
Older job seekers face a record-high roadblock: Age discrimination
Poll: 88% of Portland voters say quality of life is declining
I wonder why things are so bad in Portland. Maybe policies matter and allowing chaos is not good for the overwhelming majority of the residents.
'The Jew is the devil' — Neo-Nazis rally in Florida
"The Jew is the devil" and "Jews rape children and drink their blood" were among slogans chanted at a rally in Orlando held by the National Socialist Movement.
Florida Gov. Ron DeSantis condemns Nazi rally in Orange County
DeSantis should have condemned the rally sooner. There have been some concerning Anti-Semitic incidents recently. We should be far less tolerant about hate of any kind. What is wrong with people?
Whoopi Goldberg sparks outrage after saying on 'The View' that 'the Holocaust isn't about race'
"Well, this is White people doing it to White people, so y'all gonna fight amongst yourselves," Goldberg said, referring to the Holocaust. I don’t see people cancelling Whooppi for her comments. The Holocaust was about the Germans being racially superior and they believed the Jews and others were a threat to the German racial community. Whoppi later apologized and said ‘I stand corrected.’ ABC finally suspended her for 2 weeks. In my opinion, she should have been fired. Hard for me to believe that anyone with the last name, Goldberg, could be so out of touch with reality. Interesting article about how Caryn Johnson changed her name to Whooppi.
Brian Flores sues NFL, Giants, Dolphins, Broncos claiming racism in hiring process
This is a crazy text exchange between Bill Belichick and Brian Flores. Ooops. Mistaken identity. Additionally, there are rumors that the owner of the Dolphin paid Flores to lose in 2019.
CNN President Jeff Zucker Resigns, Citing Relationship With Colleague
CNN has had a ton of misconduct issues and it turns out the President has his own. I do not believe Zucker is married today, but having an affair with a subordinate in 2022 ain’t good. This story about the affair questions how long it has been going on and was from Katie Couric.
USA Swimming announces new policies for transgender women in elite competition
Looks like a step in the right direction.
UCLA department cancels in-person classes after apparent mass shooting threat
The threat was for a former UCLA lecturer.
Joe Rogan apologizes to Spotify and musicians amid boycott over his podcast
Podcaster Joe Rogan admitted late Sunday that he could do more when it comes to informing his listeners. Rogan was under great pressure as major musicians boycotted Spotify over his comments and misinformation.
Alice, the first all-electric passenger airplane, prepares to fly
What Are the World's Super Rich Spending Money On? Superyacht Sales Surge
877 Superyachts were sold in 2021, a jump of 77%.
Virus/Vaccine
Cases continued to fall as they were -42% from the prior two week period and have followed other countries such as the UK and South Africa. Hospitalizations were -11% and have escalated the decline from last week. However, deaths remain sticky at +30% at 2,558/day. If it follows other curves, deaths should start falling shortly.
I moved this article up in this section for a reason. A new study from Johns Hopkins on how ineffective lockdowns were in stopping the spread of the virus. However, the lockdowns caused all kinds of other issues. Lockdowns in the U.S. and Europe had little or no impact in reducing deaths from COVID-19, according to a new analysis by researchers at Johns Hopkins University. The lockdowns during the early phase of the pandemic in 2020 reduced COVID-19 mortality by about 0.2%, said the broad review of multiple scientific studies. “We find no evidence that lockdowns, school closures, border closures, and limiting gatherings have had a noticeable effect on COVID-19 mortality,” the researchers wrote. But the research paper said lockdowns did have “devastating effects” on the economy and contributed to numerous social ills. “They have contributed to reducing economic activity, raising unemployment, reducing schooling, causing political unrest, contributing to domestic violence, and undermining liberal democracy,” the report said.
Danish scientists found the BA.2 subvariant, which has rapidly become dominant in Denmark, spread more easily across all groups regardless of sex, age, household size and vaccination status. However, only unvaccinated people demonstrated higher transmissibility of BA.2 compared to the BA.1 omicron strain, which could be due to their higher viral load. The probability for spreading within a household was 39% for BA.2 versus 29% for BA.1, the study found.
Athletes and team officials are testing positive for COVID-19 at much higher rates than other people arriving in China for the Beijing Olympics, organizers said Tuesday. Figures released by local organizers showed 11 positive tests for COVID-19 among 379 athletes and officials arriving Monday. They have been taken into isolation hotels to limit the spread of the infection and could miss their events. The positive test rate of 2.9% for athletes and officials compared to 0.66% for Olympic “stakeholders,” a group which includes workers and media, in the same period. There were 1,059 people in that category. Another Olympics being scarred by the pandemic, yet China never pays a price for the never ending destruction caused by it. Wars have been started for far less than nearly 6mm deaths and trillions in damages. Let’s not forget the physiological damages due to isolation, losing loved ones, masks, school disruptions and businesses lost. The FBI is urging Olympic athletes to leave personal cell phones at home and use burner phones over hacking concerns. Wow, the Chinese government sure seems like a great ally. Kill Americans, disrupt lives, cost trillions, steal, spy and hack. Maybe the next Olympic games should be held in Iran.
I have written countless times about my lab leak theory since the pandemic started. I have never wavered. Now, scientists globally are speaking out about being silenced when they raised concerns about the lab leak theory. In coming years, many lies and cover-ups about the pandemic will come out and it won’t be pretty. Some scientists have begun speaking out about efforts to silence researchers who raised concerns about the possibility that COVID-19 could have originated in a Chinese lab. "It shot from every direction from people who we now know were actually thinking exactly the same thing but have chosen to say the opposite, which is extraordinary," Australian Dr. Nikolai Petrovsky, a Flinders University Medicine professor, said of backlash he received for voicing concerns that the pandemic may have originated in a lab.
Pfizer and BioNTech plan to submit a request for emergency use authorization for their COVID-19 vaccine in children six months to 5 years old as soon as Tuesday, which could set the vaccine up to be approved for young children in the coming weeks, the Washington Post reports. The companies began a clinical trial last year to examine the effects of two doses of 3-microgram shots in children younger than 5.
Real Estate
I have written extensively about the migration to South Florida for all the obvious reasons. This South Florida Business Journal article outlines a bunch of firms who have offices down here now. It is free, but you need to sign up to see the article. Some named are Colony Capital, D1, Elliot, Moore Capital, Pine Bridge, Point 72, Virtu and many others. Coincidentally, Brad, a long-time reader and contributor sent me an article about Michael Milken holding a Milken Institute South Florida Dialogues conference on Friday. Like it or not, South Florida is attracting more powerful business leaders and is becoming relevant for more than its sunny skies and beautiful beaches.
Ken Griffin of Citadel fame bought yet another condo in Miami in Arte next to the Surf Club in the 90s on Collins. I don’t know the total spend between Palm Beach and Miami, but it has to be approaching $1bn once he does construction. I believe he spent almost $400mm on real estate which does not include construction costs in Palm Beach alone. In Miami, he has spent $150mm, amassing land on Star Island. He spent $16mm in 1000 Museum and spent $11mm in the Arte. I just don’t get these condo purchases. There is a rumor that he bought the PH in the new Surf Club, and it is believed it went for $60-70mm. He had a $60mm PH at Faena which he has since sold. When I come back, I want to be living like Ken Griffin. Actually, not really, even if I had his money, I would never buy this many homes. Remember, he spent approximately $240mm in NYC at 220 CPS, bought a big place in the Hamptons for $100mm (Calvin Klein’s estate) and a $122mm townhouse in London and has a $60mm PH in Chicago. All I think about is carrying costs and I get sick to my stomach.
In a related story, Jamie Gilinski, a billionaire Columbian, banker has been buying up properties in the uber elusive, Indian Creek market in Miami Beach. I believe he has amassed approximately 9 acres with his purchase of model, Adriana Lima’s 2 acre property for $40mm. She paid $9mm for it in 2009. Gilinski has spent over $73mm over 10 years building his Indian Creek estate. For perspective, Julio Iglesias is offering his 4 acre Indian Creek property at $100mm. I wonder what Gilinski’s estate is worth now?
In NYC, January was the strongest January for the luxury market ($4M+) since 2006, with 102 signed contracts. PH 51/52 at 151 East 58th Street is in contract last asking $36M for 9,000 square feet. It is Steve Cohen’s old apartment which at one time was asking $115mm.
There is a Ritz Carlton condo building is going up in Pompano Beach a few miles south of where I live. I do not find Pompano conducive for a Ritz, but it is more of a sign of the migration to the area and lack of land in more desirable locations. The median home price according to realtor.com for Pompano Beach is $325k. Personally, it would be hard for me to spend millions to live in Pompano. The Pompano Beach development will have 205 luxury condos across two buildings: a 32-story beachfront tower with 117 units, and another 14-story building on the Intracoastal Waterway with 88 units. The development will have a private marina, oceanfront beach club, sports courts and pool decks. Prices start at $1 million in the marina building and at about $3.5 million in the oceanfront building.
This Bloomberg article is about rents increasing across the country. Every landlord I speak with remains surprised by the market and how much rent the market will allow despite the chaos. One thing I surely got wrong was that I did not foresee a real estate market so strong when the pandemic was breaking. Outsize residential rent increases spreading from new leases to existing ones has been a distinct pattern in places like the Atlanta and Detroit metro areas, where rents rose in 2021 at the fastest pace in decades, according to Labor Department data, propelled in part by an influx of new arrivals fleeing higher-cost cities. In 2022, the pattern is set to become a nationwide phenomenon, as landlords recoup bargaining power they lost in the early part of the pandemic, when unemployment surged and governments responded by enacting eviction bans.
John, an avid reader and R/E investor, sent me this very comprehensive Colliers report on the national Multi-Family market. There are amazing charts and a ton of information on the market. Nationally, fundamentals are in fantastic shape. Now above 95%, occupancies have never been higher. Rents are also exploding, averaging double-digit growth over the past 12 months nationally, and concessions are burning off. For the past several quarters, investment sales volume has skewed toward multifamily, and this trend shows no signs of slowing down. In 2021, 44% of all investment sales dollars poured into this sector, well above historical norms. In addition, multifamily has captured a larger share of total investment in recent years. In 2021, the record-breaking multifamily volume of $335.3 billion was above that of office and industrial combined.
Last year, I wrote a lot about the strange asset sales of billionaire, Ron Perelman. After listing one of his Hamptons estates for $115mm, he sold it for $84.5mm, claiming he wants a “simpler life.” A 1971 teardown, the residence features 385 feet of oceanfront views and spans more than 11,400 square feet. Amenities include a pool and a tennis court with its own pavilion. The East Hampton home is just one of two homes in Long Island owned by Perelman. He still owns the Creeks — a 57-acre estate situated on Georgica Pond — which he is currently shopping around for a whopping $180 million, The Post previously reported. Nothing like spending $85mm on a teardown which takes two years or more to finish.
Thanks. He is getting close. Sponsored by Taylor made now. I think he has a shot at +3 in 18 months
Thanks Rob. Appreciate it!