Quote from @Raj Vora:
This is a really great point and explanation @Paul Azad thanks for commenting! You're right, lots of depressed rental rates right now and I see cranes everywhere so that supply will likely hit in the next 12-18 months. I think getting my ducks (management/ financing) in a row and seeking out a discounted MF deal makes a lot of sense. Do you have any thoughts on the office market? I read your other posts on BP and your analysis always seems very well thought out and informed so just curious.
Haha didn't know that about Henry of Occam!
don't know much about office other than from a Macro-perspective, i've never invested in office CRE, but seems like the panic from "work from home" may be a touch overblown. Office in CBD, central business districts, are getting hammered, while office in sub-urbs not so much. Yet all office seems under price pressure, especially with rising 10yr and cap rates. I think REITs that specialize in non-CBD office are being tarnished w same brush so good deals to be had at good values. I like ARE, alexandria real estate equities, they focus on sub-urban office for life sciences labs/medical, which is something that has to be staffed in person, not from home in your underwear :), they are down 50% in 2 yrs like all the other office REITs, and by valuation have not been this cheap since 2008, but once the panic about "work from home" subsides, their value should rise back up to its historic rate. An even better option is WPC - WP Carey, which is a diversified REIt, they have been aggressively divesting all their office properties and will soon be a principally Retail REIT, but they are still priced low with other Office ones.
I usually focus on syndicated ownership of multi-tenant triple net retail, 'Cause people be Shoppin!, and screw Amazon. There has been under construction in this space since GFC in 2008-09, so now big lack of supply, and we have multiple offers on spaces and able to increase rental rates 10-11% on new leases, plus we write in CPI step-ups to hedge inflation.
Find a narrow area, then focus on improving your expertise/knowledge and you will have an informational edge that will pay huge dividends long term because unlike most people you will know what the true value of an asset is and can calmly pull the trigger when others are scared and can calmly not pull the trigger when others blinded by greed. Good luck
