There is no alpha in real estate outside of development. None. It is a levered bet on interest rates.

JUST IN: A 95k sq ft office building in the heart of DT Denver is set to sell for $2.7M - an INSANE $28 per sq ft It last sold for $24.5M in 2018 - a staggering ~90% discount in 8 yrs Here's the crazy part: The building underwent major upgrades recently, w/ 5 of its 7 office floors already built out and move in ready And the property sits directly on Denver's iconic 16th Street corridor, which just underwent a $175M renovation Denver's office market is truly experiencing an apocalypse Stay tuned and follow for more updates on the office market meltdown

In connection with the initial close on our continuation vehicle, S2 completed a series of loan modifications and refinancings across 26 multifamily assets representing approximately $1.2 billion of loan balance. The transactions cover 8,223 units across seven markets. Of the 26 communities, 12 were subject to foreclosure proceedings that have been terminated in connection with the modifications.

The transactions include the modification of a 531-unit community in North Dallas. The modification waives existing defaults, including a maturity default, terminates a pending foreclosure posting, and extends the maturity to July 2031. It was completed in consideration of a principal paydown. The lawsuit filed against me personally in connection with that loan has been dismissed.

This was a long, complex process. I’m grateful to everyone involved for working with us toward a full portfolio resolution so we can turn our attention to execution on-site, in what remains a difficult environment for fundamentals. My biggest takeaway is simple: show up, work hard, and do the right thing every time. None of this happens unless our lenders and partners believe we’re the right stewards for these assets, and for that I’m grateful to a wonderful team.

Two real estate investors. Investor 1 Uses only his own money. Investor 2 Starts raising capital. Let’s look at the numbers. Year 1: Investor 1 Has $2M he’s comfortable investing. Buys deals at 25% down. $2M → controls $8M of real estate Investor 2 Also invests $2M of his own money But raises $8M from investors Total equity = $10M 25% down → controls $40M of real estate Same net worth. Same starting point. But one change. Investor 1 buys $8M of property. Investor 2 buys $40M of property. 5x more. Now fast forward 5 years. If both portfolios double… Investor 1 → $16M portfolio Investor 2 → $80M portfolio But here’s the part people miss. All the things that make real estate powerful compound with time: Cash flow Appreciation Loan paydown Rent growth Tax advantages When you control 5x more real estate, those benefits multiply too. That’s why the biggest real estate investors don’t just buy property. They raise capital.

One real estate lesson I learned in the aftermath of the GFC: Spent '09-'13, when prices were really low, doing increasingly complex renovations of small, old buildings (bc this was the only way to show investors forecast yields materially in excess of what the market was offering, without forecasting rent growth). In retrospect, what I should have done was take advantage of the low prices by just buying as many big, nice buildings as I could with reasonable leverage, then benefiting as rents and values rose.

Here come the REOs

A vast majority of execution mistakes in development point back to a lack of or slow decision-making. This ranges from capital formation to paint color selection. Not making decisions quickly is the most damaging thing anyone can do. For anyone grappling with a tough decision, please remember that deciding slowly is also a choice.

the real silver tsunami: SMBs making beaucoup $ off the money-pit mcmansions that empty nester boomers will never ever sell and will keep retrofitting for safety purposes as they get older and less able-bodied

$1.7B in condo sales, pre-construction. Woof. Brickell Key.