Weekly Observations 1/27/2025

Dive into Real Estate Observer to enhance investment strategies as we build our real estate portfolios and learn from industry professionals around the country. All of my most recent articles can be found here.

RECENT ARTICLES 📰

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PODCAST TAKEAWAYS 🎙️

Last week, we covered the first half of the podcast with Peter Linneman and Willy Walker here.

Here are some key takeaways from Dr. Linneman, along with a few interesting stats from the second half. My thoughts are in bold.

Dr. Linneman also addresses the impact of California's wildfires, which are expected to result in $50 billion in total losses, with $30 billion of that being insured losses.

He points out that global climate-related losses have risen from an average of $92 billion annually over the past decade to $142 billion last year. He predicts that the wildfires might create a "what the hell happened" moment for California, potentially sparking significant changes in the state. Let’s hope that’s the case.

When it comes to real estate investment, Dr. Linneman views multifamily properties as a solid "stay rich" investment, while office is a good "get rich" opportunity. He suggests that current issues in the office sector—like NOI challenges and capital shortages—will eventually resolve, and capital will flow back into this market. He also views data centers as a "get poor" investment due to the tendency for overbuilding, even when demand is high. Since the podcast aired, Trump has announced Stargate, a $500 billion initiative to build data centers to support AI growth. It'll be interesting to see how, when, or if this takes shape.

I completely agree on the office market. I'm not sure how Class C office buildings will recover, and I think repurposing them is likely the best route. As for Class B+ and Class A, I can definitely see strong potential for value recovery. Hopefully, multifamily properties are still a "get rich" investment—I’m still working on getting there myself! And I’ll admit, I don’t have the ‘cahunas’ (or the knowledge) to dive into office space investing 😃 

HELPFUL SOCIAL MEDIA 📺

INTERESTING REAL ESTATE 🏠💼

Ever wanted to stay at a former missile base bunker? You can in New Mexico!

While the missile silo itself plunges 186 feet underground, the living space is located on the upper level, above ground. This renovated launch-control center provides comfortable accommodations for two guests, complete with kitchen essentials and a grill for outdoor cooking. The bunker also offers Wi-Fi and cell service, ensuring that guests can stay connected while experiencing this unique historical site.

Journey back in time and delve into the depths of Cold War history with a stay at this former missile base bunker outside Roswell, New Mexico. This subterranean relic, once a symbol of national defense, has been transformed into a unique and intriguing Airbnb that offers a glimpse into the cold war era. 

Read More Here.

WEEKLY TO-DO LIST ✔️

Listen 🎧: The Most Insightful Hour in CRE Part 20 with Dr. Peter Linneman — Discussed the outcome of his 2024 forecast, interest rates, the Fed’s recent actions and what they signal for 2025, cap rates, how political shifts will influence the economy and CRE asset classes, the LA fires and the impact they’ll have on insurance costs, predictions for the year ahead, and much more.

Happy Investing!