BG2008
-
Posts
2,882 -
Joined
-
Last visited
-
Days Won
1
Content Type
Profiles
Forums
Events
Posts posted by BG2008
-
-
Not trying to be the smartest guy in the market was some of the best advice I ever received when it came to investing. You kind of want to be a jack of all traits but a master of none.
I think you want to be a jack of all trades but a journeyman of 2-3 niches. I happen to be a journeyman of RE niche, specialty chemicals, and distribution density of sorts.
-
Living in NYC is no different to living in a London, Paris, Milan, Sydney, Barcelona, etc.
If you are a young person and shopping for a mate, this is where you want to be .... but it's a limited term engagement (6-7 yrs at most). You are also a big chunk of the annual churn - once you've decided to settle down you're renting in the burbs, 'cause kids are expensive!
If most WFH and zoom all day - both the opportunities and the pool of potential mates in NYC just crashed.
F*** It!, live in the burbs, travel to NYC on the weekend, and just rent a room in the DT on saturday night. Hotels are hurting, deals are abundant, and you look 'smart'. Not paying inflated rents, no car to maintain, discretionary cashflow, yada, yada. Common practice.
6-7 years? Graduate at 24/25 with a masters/designation, if the family hasn't started by 30/31 it isn't going to.
Better get to it - 'cause the clock is ticking!
Does it come back? Sure, but anyone's guess as to when
Is it cheap? Compared to what, and is the comparative relevant
SD
I think you are describing the bridge and tunnel people, ugg second class citizen in the dating pool. Chicks don't dig!
NYC RE is one of those things that smart finance people can't wrap their head around. But my seemingly dumb parents and relatives with elementary education understands instinctively. Because they see ability to raise rent over time (okay not this year, but long term) and they ain't building more land in NYC. To really appreciate how good of a business it is, you have to kind of dumb yourself down and take off your "smart value investor hat." I mean this in a tongue and cheek way, but I am totally serious about it as well. Because my parents who dropped out of school at first and 5th grade understand these dynamics much better than I did. I told them about cap rates blah blah blah. Over 10 years, I realized that a lot of my personal wealth comes from the long term appreciation of owning RE in NYC.
-
^ Ok BG2008 - that settles it! I'm moving to NY and want to be your roommate!
Anytime Cubsfan. I'll give up the wife and kids to be your roomie!
My wife is literally sitting next to me while I typed this. Good thing she's got a good sense of humor.
-
^ Ok BG2008 - that settles it! I'm moving to NY and want to be your roommate!
Anytime Cubsfan. I'll give up the wife and kids to be your roomie!
-
Why don't people talk about biology? Why don't people talk about the fact that if you are 22-35, single, horny, and promising, you want to be in NYC to meet others just like you. If you are 25, Asian (East and South), and can code or build complex financial models or just trying to revolutionize the world, you want to be here. Your odds are slimmer in Wichita. If you are LGBTQ, this is a great place for you. If you want Dim Sum, this is the place for you (although capacity leaving the market temporarily). 50% of my thesis is that this is the deepest liquidity pool for dating. I will continue to bet on biology.
not to mention the pricing from a consumer standpoint is starting to get super attractive in my view:
https://streeteasy.com/building/360-east-57-street-new_york/10b
this apartment (well one a few floors up or down) was $5100 when i lived there in the early 2010's. it's now $4200. rent down 20% from almost 10 years ago, while salaries/all-in comp for elite fields is probably up 20% (or more in some instances, I'm honestly not as in tune with entry level comp for banking/consulting/tech)
the living room can be a 3rd bedroom, that's $1,400 / month average for 3 dudes to live in manhattan making like mid $100's 1st year out of college (finance/tech/whatever), or $2000/month for recently graduated big law types making $250K (you get your own bathroom and a full living room for having to deal with law school). i'm sure this apartment is not the cheapest/most expensive, i just picked this one because i have a great sense of comparability and know what it's like to actually live there (it's nice, doorman building, perfectly acceptable). it's not a hip spot, the neighborhood's kind of boring, but you're a walk away from the offices in midtown and a wasted cab ride away from lots of night life.
people make a lot more today than in the early 2010's, the disposable income of the yuppie crowd. rents down = massive increase in disposable income for playing and getting ahead in the greatest city in the world and that applies at all levels.
think how cheap its getting to share apartments in outer boroughs. sure that's bad for near term NOI, but it also creates an attractive pull. you can say "well ya but you could get a house or your own apartment for that in XXX", sure, but it's not in NYC.
rents are skyrocketing in the places people are leaving to. like in south Florida for example.
the NYC premium collapsing should help buffer the "exodus"
EDIT: for context, the 2BR I shared in the south immediately after my time in NYC is now $2000 up from $1500. So the spread went from $3,700/month to $2,200/month.
+1 to both -- if you're a young and single person, you will almost certainly be back in NYC in a few years regardless of whether you can do your work from Des Moines -- because then you would have to live in Des Moines.
thepupil inspired me to take a look at my old apartment in NYC. https://bit.ly/2IMTBJ8
The gross rent is maybe two hundred bucks north of where it was when I moved to NYC in 2007. As a 24 year old newly minted lawyer, I was more than happy to apply part of my $160k salary (now $190k for anyone starting NYC Biglaw) to a nice crib. Y'all are crazy if you think people won't want to live in NYC again.
Merkhet and Pupil,
You guys lived in way too fancy digs for me. I was living on 9th Ave between 55th and 56th or maybe 54th and 55th. It was a fourth floor walk up (European floors, so it was really 5th). The place was a dump. It was a long rectangular one bedroom where the bedroom is on one side and the living room is on the other side. I was first subletting from a gay guy who taught ballet. Then rent got too expensive for him. I moved back to Queens. Then I talked to the landlord and he let me rent the whole apartment. I then sublet the place and posted an ad on Craigslist. 30 people showed up all ready to give me first month rent. It was literally a reality show. This was a shit apartment on 9th Ave and 50s in Hell's Kitchen near a row of restaurants. But the rent was $1,900 and we can split it between 2 people and it functions like 2 separate studios on 2 opposite ends. I first rented it to a female Cornell grad and I quickly realize I was becoming her relationship therapist and she quickly wanted out of the deal. I was annoyed because I passed on an Apple tech guy in his late 30s because I wanted to live with someone younger. I probably could've gotten it rented in 2 weeks. But I was working IB hours and I had the girl's deposit. So I took my time and ran another open house. 30 people showed up again. People who work in the theater district, girls who were going to the Alvin Alley dance studios, finance people, and generally people making $50-100k who need a cheap place that was convenient. I worked on 7th Ave and could just walk over to work without getting on any subways. I used to ride my road bike in Central Park in the morning or go up the west side highway and go over the GW bridge to Jersey on the weekends. I would carry my road bike up 5 flights of stairs while strapped to my bike shoes which is probably not smart. Everyone wanted to sublet. I winded up subletting to an African American man in his mid 20s who was working at a middle office job at JP Morgan. So, in my short time, I had a gay Asian American roommate who taught ballet, an Asian American woman who couldn't get over her ex, and an African American man as roommate in a matter or 2 years.
How bad was the place. Paint was falling off the ceiling. The tub needs a mat or it didn't drain well. The place was old. The doors to my bedroom didn't go all the way up or down. My roommates' ceiling was falling off. But did it matter? A few things stood out. I once somehow bought home 3 different girls in one week. I peaked that week. I also once convince a girl living in Delaware to board an Amtrak train to come to Penn Station at 7PM. So she got ready at 7PM and arrived in NYC at midnight and we went out and had a great time. My apartment was gross and she knew. But she was coming to go out in New York city where you can stay out till 4AM. My African American roommate would have random "strange" that he picks up at bars. I would get up at 3am to use the bathroom and some late 30s woman would be stumbling out of his room to catch a cab back. It was kind of hilarious. He was a large tall man with a bit of a stutter. But he got ripped in 6 months. Freakish genetics and he always had a smile. So he went from looking like a friendly overweight dude to someone who was tall, dark, and handsome as Adele would say in her SNL skit. That dude got so much action, it was crazy.
My red haired Irish friend and I went out and will get a dozen drinks in us and we will bar hop to 4-5 different places. My friends from HS was in the city. They were always throwing a party from time to time. My college friends were all in the city. I can't imagine being anywhere else.
Yeah, New York City sucks for now. But I am willing to bet that 24 years old want to get laid or AT LEAST GET WASTED AND HAVE a SHOT.
So I was paying $900 and making $75k base with $25k bonus in a middle market IB before my whole group was gutted in early 2009.
Ahhhh.... to be 24 again! What a life!
But 75/25? Seriously? I thought you worked at Citi.
I was in the group that did deals from $20mm to $1bn. The IBD boys downtown made all the loot. Their going rate that year was $65k plus about $100-110k. My base was higher, but my upside on the bonus was much lower. Part of it was because my group was full of politics and drama without the deal closing ability of the IBD. But I learned so much by studying what not to do during that time. I was getting 2-5 phone calls from desperate developers every week back then. I guess I pass on a lot of opportunity today because I saw so many ways that you blow up in RE. But the structure was my MD and 2 analysts. My MD let me handle a lot of the incoming calls. So I was functioning more like an idiotic VP with no experience. What a way to drink from the fire hose!
I had to learn how to live on a budget on $100k. Not like Merkhet and Pupil. Those guys were the ballers stealing girls from me. Life was kind of like "How I met your mother." or at least I like to pretend it was like that. But we didn't have as much free time.
-
Why don't people talk about biology? Why don't people talk about the fact that if you are 22-35, single, horny, and promising, you want to be in NYC to meet others just like you. If you are 25, Asian (East and South), and can code or build complex financial models or just trying to revolutionize the world, you want to be here. Your odds are slimmer in Wichita. If you are LGBTQ, this is a great place for you. If you want Dim Sum, this is the place for you (although capacity leaving the market temporarily). 50% of my thesis is that this is the deepest liquidity pool for dating. I will continue to bet on biology.
not to mention the pricing from a consumer standpoint is starting to get super attractive in my view:
https://streeteasy.com/building/360-east-57-street-new_york/10b
this apartment (well one a few floors up or down) was $5100 when i lived there in the early 2010's. it's now $4200. rent down 20% from almost 10 years ago, while salaries/all-in comp for elite fields is probably up 20% (or more in some instances, I'm honestly not as in tune with entry level comp for banking/consulting/tech)
the living room can be a 3rd bedroom, that's $1,400 / month average for 3 dudes to live in manhattan making like mid $100's 1st year out of college (finance/tech/whatever), or $2000/month for recently graduated big law types making $250K (you get your own bathroom and a full living room for having to deal with law school). i'm sure this apartment is not the cheapest/most expensive, i just picked this one because i have a great sense of comparability and know what it's like to actually live there (it's nice, doorman building, perfectly acceptable). it's not a hip spot, the neighborhood's kind of boring, but you're a walk away from the offices in midtown and a wasted cab ride away from lots of night life.
people make a lot more today than in the early 2010's, the disposable income of the yuppie crowd. rents down = massive increase in disposable income for playing and getting ahead in the greatest city in the world and that applies at all levels.
think how cheap its getting to share apartments in outer boroughs. sure that's bad for near term NOI, but it also creates an attractive pull. you can say "well ya but you could get a house or your own apartment for that in XXX", sure, but it's not in NYC.
rents are skyrocketing in the places people are leaving to. like in south Florida for example.
the NYC premium collapsing should help buffer the "exodus"
EDIT: for context, the 2BR I shared in the south immediately after my time in NYC is now $2000 up from $1500. So the spread went from $3,700/month to $2,200/month.
+1 to both -- if you're a young and single person, you will almost certainly be back in NYC in a few years regardless of whether you can do your work from Des Moines -- because then you would have to live in Des Moines.
thepupil inspired me to take a look at my old apartment in NYC. https://bit.ly/2IMTBJ8
The gross rent is maybe two hundred bucks north of where it was when I moved to NYC in 2007. As a 24 year old newly minted lawyer, I was more than happy to apply part of my $160k salary (now $190k for anyone starting NYC Biglaw) to a nice crib. Y'all are crazy if you think people won't want to live in NYC again.
Merkhet and Pupil,
You guys lived in way too fancy digs for me. I was living on 9th Ave between 55th and 56th or maybe 54th and 55th. It was a fourth floor walk up (European floors, so it was really 5th). The place was a dump. It was a long rectangular one bedroom where the bedroom is on one side and the living room is on the other side. I was first subletting from a gay guy who taught ballet. Then rent got too expensive for him. I moved back to Queens. Then I talked to the landlord and he let me rent the whole apartment. I then sublet the place and posted an ad on Craigslist. 30 people showed up all ready to give me first month rent. It was literally a reality show. This was a shit apartment on 9th Ave and 50s in Hell's Kitchen near a row of restaurants. But the rent was $1,900 and we can split it between 2 people and it functions like 2 separate studios on 2 opposite ends. I first rented it to a female Cornell grad and I quickly realize I was becoming her relationship therapist and she quickly wanted out of the deal. I was annoyed because I passed on an Apple tech guy in his late 30s because I wanted to live with someone younger. I probably could've gotten it rented in 2 weeks. But I was working IB hours and I had the girl's deposit. So I took my time and ran another open house. 30 people showed up again. People who work in the theater district, girls who were going to the Alvin Alley dance studios, finance people, and generally people making $50-100k who need a cheap place that was convenient. I worked on 7th Ave and could just walk over to work without getting on any subways. I used to ride my road bike in Central Park in the morning or go up the west side highway and go over the GW bridge to Jersey on the weekends. I would carry my road bike up 5 flights of stairs while strapped to my bike shoes which is probably not smart. Everyone wanted to sublet. I winded up subletting to an African American man in his mid 20s who was working at a middle office job at JP Morgan. So, in my short time, I had a gay Asian American roommate who taught ballet, an Asian American woman who couldn't get over her ex, and an African American man as roommate in a matter or 2 years.
How bad was the place. Paint was falling off the ceiling. The tub needs a mat or it didn't drain well. The place was old. The doors to my bedroom didn't go all the way up or down. My roommates' ceiling was falling off. But did it matter? A few things stood out. I once somehow bought home 3 different girls in one week. I peaked that week. I also once convince a girl living in Delaware to board an Amtrak train to come to Penn Station at 7PM. So she got ready at 7PM and arrived in NYC at midnight and we went out and had a great time. My apartment was gross and she knew. But she was coming to go out in New York city where you can stay out till 4AM. My African American roommate would have random "strange" that he picks up at bars. I would get up at 3am to use the bathroom and some late 30s woman would be stumbling out of his room to catch a cab back. It was kind of hilarious. He was a large tall man with a bit of a stutter. But he got ripped in 6 months. Freakish genetics and he always had a smile. So he went from looking like a friendly overweight dude to someone who was tall, dark, and handsome as Adele would say in her SNL skit. That dude got so much action, it was crazy.
My red haired Irish friend and I went out and will get a dozen drinks in us and we will bar hop to 4-5 different places. My friends from HS was in the city. They were always throwing a party from time to time. My college friends were all in the city. I can't imagine being anywhere else.
Yeah, New York City sucks for now. But I am willing to bet that 24 years old want to get laid or AT LEAST GET WASTED AND HAVE a SHOT.
So I was paying $900 and making $75k base with $25k bonus in a middle market IB before my whole group was gutted in early 2009.
Ahhhh.... to be 24 again! What a life!
But 75/25? Seriously? I thought you worked at Citi.
I was in the group that did deals from $20mm to $1bn. The IBD boys downtown made all the loot. Their going rate that year was $65k plus about $100-110k. My base was higher, but my upside on the bonus was much lower. Part of it was because my group was full of politics and drama without the deal closing ability of the IBD. But I learned so much by studying what not to do during that time. I was getting 2-5 phone calls from desperate developers every week back then. I guess I pass on a lot of opportunity today because I saw so many ways that you blow up in RE. But the structure was my MD and 2 analysts. My MD let me handle a lot of the incoming calls. So I was functioning more like an idiotic VP with no experience. What a way to drink from the fire hose!
-
Why don't people talk about biology? Why don't people talk about the fact that if you are 22-35, single, horny, and promising, you want to be in NYC to meet others just like you. If you are 25, Asian (East and South), and can code or build complex financial models or just trying to revolutionize the world, you want to be here. Your odds are slimmer in Wichita. If you are LGBTQ, this is a great place for you. If you want Dim Sum, this is the place for you (although capacity leaving the market temporarily). 50% of my thesis is that this is the deepest liquidity pool for dating. I will continue to bet on biology.
not to mention the pricing from a consumer standpoint is starting to get super attractive in my view:
https://streeteasy.com/building/360-east-57-street-new_york/10b
this apartment (well one a few floors up or down) was $5100 when i lived there in the early 2010's. it's now $4200. rent down 20% from almost 10 years ago, while salaries/all-in comp for elite fields is probably up 20% (or more in some instances, I'm honestly not as in tune with entry level comp for banking/consulting/tech)
the living room can be a 3rd bedroom, that's $1,400 / month average for 3 dudes to live in manhattan making like mid $100's 1st year out of college (finance/tech/whatever), or $2000/month for recently graduated big law types making $250K (you get your own bathroom and a full living room for having to deal with law school). i'm sure this apartment is not the cheapest/most expensive, i just picked this one because i have a great sense of comparability and know what it's like to actually live there (it's nice, doorman building, perfectly acceptable). it's not a hip spot, the neighborhood's kind of boring, but you're a walk away from the offices in midtown and a wasted cab ride away from lots of night life.
people make a lot more today than in the early 2010's, the disposable income of the yuppie crowd. rents down = massive increase in disposable income for playing and getting ahead in the greatest city in the world and that applies at all levels.
think how cheap its getting to share apartments in outer boroughs. sure that's bad for near term NOI, but it also creates an attractive pull. you can say "well ya but you could get a house or your own apartment for that in XXX", sure, but it's not in NYC.
rents are skyrocketing in the places people are leaving to. like in south Florida for example.
the NYC premium collapsing should help buffer the "exodus"
EDIT: for context, the 2BR I shared in the south immediately after my time in NYC is now $2000 up from $1500. So the spread went from $3,700/month to $2,200/month.
+1 to both -- if you're a young and single person, you will almost certainly be back in NYC in a few years regardless of whether you can do your work from Des Moines -- because then you would have to live in Des Moines.
thepupil inspired me to take a look at my old apartment in NYC. https://bit.ly/2IMTBJ8
The gross rent is maybe two hundred bucks north of where it was when I moved to NYC in 2007. As a 24 year old newly minted lawyer, I was more than happy to apply part of my $160k salary (now $190k for anyone starting NYC Biglaw) to a nice crib. Y'all are crazy if you think people won't want to live in NYC again.
Merkhet and Pupil,
You guys lived in way too fancy digs for me. I was living on 9th Ave between 55th and 56th or maybe 54th and 55th. It was a fourth floor walk up (European floors, so it was really 5th). The place was a dump. It was a long rectangular one bedroom where the bedroom is on one side and the living room is on the other side. I was first subletting from a gay guy who taught ballet. Then rent got too expensive for him. I moved back to Queens. Then I talked to the landlord and he let me rent the whole apartment. I then sublet the place and posted an ad on Craigslist. 30 people showed up all ready to give me first month rent. It was literally a reality show. This was a shit apartment on 9th Ave and 50s in Hell's Kitchen near a row of restaurants. But the rent was $1,900 and we can split it between 2 people and it functions like 2 separate studios on 2 opposite ends. I first rented it to a female Cornell grad and I quickly realize I was becoming her relationship therapist and she quickly wanted out of the deal. I was annoyed because I passed on an Apple tech guy in his late 30s because I wanted to live with someone younger. I probably could've gotten it rented in 2 weeks. But I was working IB hours and I had the girl's deposit. So I took my time and ran another open house. 30 people showed up again. People who work in the theater district, girls who were going to the Alvin Alley dance studios, finance people, and generally people making $50-100k who need a cheap place that was convenient. I worked on 7th Ave and could just walk over to work without getting on any subways. I used to ride my road bike in Central Park in the morning or go up the west side highway and go over the GW bridge to Jersey on the weekends. I would carry my road bike up 5 flights of stairs while strapped to my bike shoes which is probably not smart. Everyone wanted to sublet. I winded up subletting to an African American man in his mid 20s who was working at a middle office job at JP Morgan. So, in my short time, I had a gay Asian American roommate who taught ballet, an Asian American woman who couldn't get over her ex, and an African American man as roommate in a matter or 2 years.
How bad was the place. Paint was falling off the ceiling. The tub needs a mat or it didn't drain well. The place was old. The doors to my bedroom didn't go all the way up or down. My roommates' ceiling was falling off. But did it matter? A few things stood out. I once somehow bought home 3 different girls in one week. I peaked that week. I also once convince a girl living in Delaware to board an Amtrak train to come to Penn Station at 7PM. So she got ready at 7PM and arrived in NYC at midnight and we went out and had a great time. My apartment was gross and she knew. But she was coming to go out in New York city where you can stay out till 4AM. My African American roommate would have random "strange" that he picks up at bars. I would get up at 3am to use the bathroom and some late 30s woman would be stumbling out of his room to catch a cab back. It was kind of hilarious. He was a large tall man with a bit of a stutter. But he got ripped in 6 months. Freakish genetics and he always had a smile. So he went from looking like a friendly overweight dude to someone who was tall, dark, and handsome as Adele would say in her SNL skit. That dude got so much action, it was crazy.
My red haired Irish friend and I went out and will get a dozen drinks in us and we will bar hop to 4-5 different places. My friends from HS was in the city. They were always throwing a party from time to time. My college friends were all in the city. I can't imagine being anywhere else.
Yeah, New York City sucks for now. But I am willing to bet that 24 years old want to get laid or AT LEAST GET WASTED AND HAVE a SHOT.
So I was paying $900 and making $75k base with $25k bonus in a middle market IB before my whole group was gutted in early 2009.
-
Who knew people prefer larger living quarters when they can't go out much, and smaller ones when they can go out a lot?
Life is trade-offs, I guess.
So you mean to tell me that if there was a virus that is very contagious and it make people want to leave densely populated cities with high rent, I am supposed to be shocked at that kind of rationale behavior by the upper middle to rich class?
Wow, I would've never thought of that. 2008/2009 was scary as well. People tried to jack my tenants. Every 7-10 years, you have to experience some pain in real estate. It's just life. This is round 2 for me with 2008/2009 being more scary in general but NYC holding up better. This round is more specific for NYC. Back in 2008/2009, I was pretty bearish about NYC because all the revenue and profit center that drove that boom was so tied to mortgage packaging. That was totally going to go away.
covid is precipitating trends that are not friendly to NYC. the biggest in my mind is the risk that "front office" as well as "back office" of the securities/finance industry will leave NYC. the latter has already mostly happened. covid is encouraging the former. if NYC loses much of the financial sector, then it will be shot to hell
NYC lost the Madison Avenue advertising businesses, (think Mad Man), and it was once the fashion capital of US with its garment district, and the media center of the US with all big 3 broadcasters. Finance is obviously hugely important to NYC today, but there are fundamental forces that give NYC its regenerative capacity. Geography, for one, makes immigration benefit NY more than elsewhere in the US, and so are the transportation infrastructure, education institutions, etc. There's reason why finance was centered around NY in the first place.
That said, it's going to be on a down hill for a while, especially with characters like AOC having influence over decisions surrounding Amazon HQ2. It'll take a while, but it's more about how it's run that will determine its future than just finance.
Why don't people talk about biology? Why don't people talk about the fact that if you are 22-35, single, horny, and promising, you want to be in NYC to meet others just like you. If you are 25, Asian (East and South), and can code or build complex financial models or just trying to revolutionize the world, you want to be here. Your odds are slimmer in Wichita. If you are LGBTQ, this is a great place for you. If you want Dim Sum, this is the place for you (although capacity leaving the market temporarily). 50% of my thesis is that this is the deepest liquidity pool for dating. I will continue to bet on biology.
-
Who knew people prefer larger living quarters when they can't go out much, and smaller ones when they can go out a lot?
Life is trade-offs, I guess.
So you mean to tell me that if there was a virus that is very contagious and it make people want to leave densely populated cities with high rent, I am supposed to be shocked at that kind of rationale behavior by the upper middle to rich class?
Wow, I would've never thought of that. 2008/2009 was scary as well. People tried to jack my tenants. Every 7-10 years, you have to experience some pain in real estate. It's just life. This is round 2 for me with 2008/2009 being more scary in general but NYC holding up better. This round is more specific for NYC. Back in 2008/2009, I was pretty bearish about NYC because all the revenue and profit center that drove that boom was so tied to mortgage packaging. That was totally going to go away.
covid is precipitating trends that are not friendly to NYC. the biggest in my mind is the risk that "front office" as well as "back office" of the securities/finance industry will leave NYC. the latter has already mostly happened. covid is encouraging the former. if NYC loses much of the financial sector, then it will be shot to hell
I don't have a lot of numbers or stats to back up. I guess I am one of those HODL NYC people. FB signed the Farley building while simultaneously laying out a plan to have 50% of the work force remote in 10 years. My interpretation is that FB and the other big tech companies realize that NYC will likely be the best source for the 22-35 talent. It wasn't that long ago when corporations were complaining that they can't compete on hiring in the suburbs.
New normal probably looks like "35+ married with kids moves to the burbs earlier" because companies are willing to accommodate work from home or at least partially. This provides a place for the younger 22-35 single and ready to mingle to flood into the city. There were concerns a while ago that NYC was getting unaffordable and the young blood were priced out. I think this is a great reset. Those young'uns want to be near where the ACTION is which includes career prospect and mates. Living in NYC never made sense for the parents helping out their kids etc. But it is glorious for the kids.
Willing to go long NYC. There are still bargains.
In the ZIRP, the 6% dividend yield is KING (or likely to double).
-
I've personally sold all my NYC focused REITs and purchased a boutique hotel in Belgrade, as it's the future.
https://nypost.com/2020/11/17/serbia-is-a-new-unlikely-oasis-for-nyc-residents-fleeing-the-city/
How much NYC office do you still own? This is what makes a market.
low teens % of portfolio and dropping.
What was it at peak and how do you typically size?
-
Who knew people prefer larger living quarters when they can't go out much, and smaller ones when they can go out a lot?
Life is trade-offs, I guess.
So you mean to tell me that if there was a virus that is very contagious and it make people want to leave densely populated cities with high rent, I am supposed to be shocked at that kind of rationale behavior by the upper middle to rich class?
Wow, I would've never thought of that. 2008/2009 was scary as well. People tried to jack my tenants. Every 7-10 years, you have to experience some pain in real estate. It's just life. This is round 2 for me with 2008/2009 being more scary in general but NYC holding up better. This round is more specific for NYC. Back in 2008/2009, I was pretty bearish about NYC because all the revenue and profit center that drove that boom was so tied to mortgage packaging. That was totally going to go away.
-
I've personally sold all my NYC focused REITs and purchased a boutique hotel in Belgrade, as it's the future.
https://nypost.com/2020/11/17/serbia-is-a-new-unlikely-oasis-for-nyc-residents-fleeing-the-city/
How much NYC office do you still own? This is what makes a market.
-
I got a sizable bet that people will return. My balls are on the line. These articles are never easy to process. But you don't really get paid for buying at a 3.5% cap rate of a "blue sky" NOI.
-
NYC office was a great candidate. But it seems like market likes them now.
-
You're not really getting at the problems with wealth inequality, you are referencing the benefits of having opportunity. Some argue that having opportunity is way more important than the resulting inequality. Some argue the negative impact of inequality (eg people with $ billions getting richer and richer while others struggle to make ends meet) needs to be balanced with the greater needs of society as a whole.
There's no right or wrong answer and it will lead to arguments. Anecdotally, I have friends here who came over from Sweden (one of the early founders in Pinterest) who felt he had to leave Sweden because there is a belief that it is wrong to put your head up from the crowd (be you smart, ambitious, lucky etc) or it will get chopped off (taxes, regulations, limits etc). He loves it here. His wife wants desperately to go back because she likes it that everyone is pretty equal back in Sweden and there's no continuously trying to outdo your neighbors.
Your view will often depends upon your level of ambition and anyone on this board probably has more than average.
There is a restaurant in Denmark called Noma by Rene Redzepi who David Chang has interviewed a few time. It is super interesting in the culinary world to try to be a Michelin quality restaurant in a country where people emphasize equality and not trying to outdo each other. I read an article a while back that talks about the French education system where they believe in equality of outcomes so much that the gifted and talented children wind up having a ton of behavioral issues. Imagine if you have an IQ of 150 and you are forced to do algebra in 10th grade! These kids exhibits suicidal and anti-social behaviors because there is nothing to intellectually stimulate their mind. Now, intellectually douchery is a real thing and I despise it. But to not give people the resources to pursue learning at an accelerated pace is just absolutely ridiculous.
-
Ive been adding a few VIX calls the past few days, but expect it to be money written off. The biggest difference to me, is that last time Ackman kept his mouth shut. This time he's being promotional about it. If think we can infer what he's trying to do.
I am a little dense, please explain Greg? See you on the GRIF in half an hour?
-
I think this has more to do with the degree to which corporate credit has tightened and asymmetry than anything.
CDX IG is at 50 bps. Meaning one can pay 50 bps / year for 5 year to buy default insurance on a basket of 125 investment grade credits.
Pre-covid this number was 40 bps. The risk in investment grade credit has increased by more than 10 bps. The lowest they've been in 10 years is 45 bps.
During the march sell-off this blew out to 160 bp. Ackman's hedges were on US and European investment grade credit primarily, on $70 billion of notional. this time around it's "less than 1/3" the size. Let's say it's $20 billion.
So he's probably paying about $100mm / year to get short $20 billion of investment grade credit. If spreads widened to 100 (for context they widened to 93 in december 2018 on general fears of rising rates/end of QE), he'd make ~2.5 points on the notional or $500mm.
This is in the context of a ~$11 billion of AUM.
He's fighting the fed, but even if he's wrong he has permanent capital and the cost of carry is not huge at his current size.
As a PSH shareholder, I approve. I cannot put this on as I don't have ISDA's with banks lol. I would short IG at 50 bps if i could. I also think this is a good hedge to rising interest rates w/o the ZIRP/NIRP tail risk and with far better/empirically observed negative correlation to equities than shorting treasuries/rates. Corporate credit quality will deteriorate if the all-in cost of financing increases (see late 2018 widening).
he may even be shorting HY at 330. HY is at an all time low absolute yield (in the low 4% range) and very low absolute spreads given the default environment.
I continue to think investing in Ackman at a 30% discount is very attractive.
Pupil,
You give these analysis out for free? Have you consider a substack (whatever that is)?
-
A boat? ;D
There s a good saying, "if it drives, flies, floats, or fucks, rent it"... That said, I totally agree with rkbabang as a boat owner. Expensive, but totally worth it.
Apparently NBA, NFL, and MLB coaches will literally tell their athletes this. It is probably the best advice one can give in that position.
-
Pupil,
Great point. But wuss for trimming. JK
33% in urban RE to 30%.
2020 would have been better for me if I’d been more of a wuss and managed risk/concentration better. That’s why the name isn’t theMaster.
Gregmal, I sold all my JBGS today....then bought it all again...tax gain harvest, same with berkshire.
You didn't ask. But I am at 50% RE (urban and non-urban) and added today
-
Alexander's
Equity Residential
[if history is any guide, these are good buy signals.]
Yes, if there is a tax increase. ALX may pay a big special dividend to get ahead of the Biden tax increases.
-
I think that a no vaccine / no good therapeutics scenario was relatively low probability and that probability is no even lower. it's a fundamental positive for names dependent on life mean reversion vs a negative for current life extrapolation. the long term secular trends brought about by covid likely remain, but perhaps for less long or to a lesser degree. perhaps not.
I think to have owned anything involving human interaction (in my case urban apts/office) you kind of had to assume that there'd be a vaccine at some point (whether people are getting their shots in 6m or 12m or 24m was less important, at least to me). I don't think much has changed and would hypothesize the degree of these moves has more to do with positioning than fundamentals, but that's speculative.
i trimmed a little today in some of the more dramatic moves in urban real estate.
Pupil,
Great point. But wuss for trimming. JK
-
Good news, but it still sounds like the virus will be around for a while.
The Pfizer vaccine needs to be kept at -80c, has short shelf life, and requires 2 doses. Additionally it sounds like initial distribution is going to be split from Pfizers plants with vaccine produced in EU plants going to EU and USA produced vaccine going to US residents. With expectation of enough vaccine to vaccinate 600 million people total by the end of 2021 (1.2 billion doses). I am not sure if that includes the 100 million doses the US government already apparently has.
Seems like the winter is still going to be rough in USA giving the surging case numbers going into holiday season.
All true. If I learned something from the 2008/2009 episode is that equity is very forward looking. Perhaps, I'm speaking mostly from my RE exposure. RE is supposed to be a 100 year asset (for the right type), so 2020 and 2021 will be write offs. But if that office or apartment building will be good for the next 100 years with a 90% effective vaccine, it takes away a lot of the terminal value questions.
-
Initial reaction has been a pop of around 10% in energy, 10% in financials and 20-30% in travel related names and real estate. Obviously quite big moves but then again these sectors are still well below pre-COVID levels and had already sold off significantly from the summer when the initial re-opening/V shaped recovery fervour was taking steam and the market is so driven by momentum that there might be a much longer rally before the good news is fully priced in. Of course still some uncertainties re approvals/timing of the roll out. But perhaps there is an opportunity here.
Honestly, I'm just picking my own stocks. I was just thinking about buying something that had a 4x upside and now that it's up 20%, it's a 3x upside. But the outlook is much more clear. If you are buying stuff that are down 50% for the year that was cheap to start the year, I think it's still cheap after a 15-20% pop today. There is also the element of narratives changing. A 30 cent dollar with a narrative that takes away the structural risk becomes powerful.
-
I guess this kind of pisses all over Joe's big Covid Task Force agenda......was supposed to be a very big deal for him today.
Let's focus on making money here Greg. There are still lots of undervalued names. Just look at the whole Office REIT and Multi-Fam REIT thread
What are you buying today?
in General Discussion
Posted
Any specific reason on timing price etc? I generally agree.