The tide is going out, and we're about to find out who's been swimming naked. There have been some very significant things going down in financial markets of late. I'm not calling a crash and I'm not claiming I know the timing. I'm definitely not saying stop looking at deals. What I'm saying is that early warning signs are flashing and it is time to think very carefully about what our goals are, and to not over-extend ourselves. Here's Why:

• The dollar is up this year vs. major currencies at the same time the Fed is tightening.
• The Fed, while having raised rates marginally, is just now taking things back into positive REAL interest rate territory.
• We all know how tight deals are now, valuations can't support much higher interest rates.
• Unemployment is extremely low. While many cite this as a positive, what it means from an economic perspective is that there is no slack in the labor market to fuel growth and wage pressure will increase.
• With wages increasing and borrowing costs increasing while profits are peaking, there will be significant pressure on corporations to cut costs and cut back on capital spending. Cutting costs = reducing head count.
• Corporations are drastically over-leveraged. Covenant lite loans are rampant and credit quality is worse than people think, shadowed by historically low borrowing costs. Look at what is happening to GE for a good example of what is to come.
• Local, State, and Federal Governments are drastically over-leveraged. Cutting spending is the least likely outcome, followed by taxing, then borrowing/inflating. Trying to borrow into rising interest rates risks a true crisis in government debt and the potential for serious inflation as the Fed monetizes the debt at the Federal level.
• The stock market, which has seen recent valuations in-line with the most extreme bubbles in history, is now showing serious signs of deterioration.
• Credit spreads have been silly-low for a long time and are now starting to widen.
• Cracks are forming in the high end real estate markets - Seattle, San Fran, New York. These markets tend to lead corrections.
• A large proportion of RE Sponsors, along with fund managers on Wall St. have literally never faced a down market in their careers, at least as the strategic head of a fund/organization. 
• This economic expansion is the second longest on record. Granted, my economics degree is pretty worthless but still, I'm pretty sure the economy is cyclical.

I believe that the next several years will be drastically different from the past decade. There's no indication that a very abrupt and deep correction is imminent - this could play out over many, many years. But asset management and property management will be where the value is created or preserved, value-add may become more of a defensive measure, and so-so investors and sponsors will no longer get bailed out by compressing cap rates and extreme rent growth. We will begin to see who the truly strong real estate professionals are, and who has been swimming naked. I've been extremely frustrated with my failure to acquire good deals in my market and size range. I think that is about to change.
What I guess I'm saying is: keep me in mind in 2019 and 2020 if you've got a deal going sideways. I'll be buying :).