Real Estate Economics and Finance
March 6th, 2010 — Investing, Real Estate
I noticed that a few people were landing on this website based on some variation of the following search: “What questions should I ask when investing in a real estate project?”
Here is the brief answer: Can your team successfully implement your investment strategy? To be more accurate though, we must define a few of the aspects your “project”. Continue reading →
February 3rd, 2010 — Investing, Real Estate
The IBM office park built in Westchester, NY during the 1980s is nearly empty. The team members from one particular IBM work group have never even met before… at least in person. Online, they meet everyday.
This isn’t some idealistic vision of a future work place, it’s modern day reality at one of America’s largest corporations. In the PBS Frontline documentary, Digital Nation, Francoise LeGoues, the VP of Innovation at IBM, estimates the savings from holding online meetings amounted to $1mm last year. The online world, Second Life, serves as a virtual office space for various working groups at IBM where they hold daily “sit downs”, gather to discuss strategy and map out the team’s mission ahead.
January 1st, 2010 — Investing, Real Estate
A worthy anecdote from the front lines of distressed real estate deal making by Joshua Kahr at Kahr Real Estate. He discusses the importance of relationships and deal structure in a successful transaction:
[...] if a deal could be structured in a way in which a bank could receive more today for a defaulted note or an asset than they would otherwise receive by the investor by bringing in bank as a partial owner in the purchasing entity, this might help to better align the goals of the investor and the bank. In addition, the lender will often finance the new vehicle as a way to boost the overall sales price and mitigate taking a loss today. This process can be beneficial to both parties, because it allows the investors to reduce the equity commitment while providing the bank with a higher price today on paper. In addition to providing some percentage of the equity, a deal could be structured in which the investor must achieve a targeted rate of return prior to a bank receiving any part of its equity back.
A happy and healthy new year to you!
January 19th, 2009 — Economics, Investing
Advice to President Obama:
.”..we’re going to unclog the arteries. My banking experts have analyzed each of your balance sheets. You will tell us if we’re right. Those of you who are insolvent, we will nationalize and shut down. We will auction off your viable assets and will hold the toxic ones in a government reconstruction fund and sell them later when the market rebounds. Those of you who are weak will be merged. And those of you who are strong will receive added capital for your balance sheets, after you write down all your remaining toxic waste. I am not going to continue rewarding the losers and dimwits amongst you with handouts.”, Thomas Friedman wrote on Sunday.
With another $350 billion to spend, Barack Obama has a critical decision to make. In this mess of an economy, who is the best allocator of capital (how can we get the most bang for our buck)? There are three broad options:
October 14th, 2008 — Investing
Most investors are rational; like most politicians are honest. So, if you fancy yourself one of the rational crowd, shouldn’t you be raking in the returns right now.
“The problem with being smart, is waiting for the rest of the world to catch up with you.” – Jeff Macke (Fast Money on CNBC)
