DRED: Death and Real Estate Decisions

By Stan Sonenshine in Real Estate Investment Strategies

1 week ago

1 week ago 0 0 44

Most people view making decisions about death with dread. Therefore, the made-up acronym DRED to represent the topic of Death and Real Estate Decisions makes sense. No one likes to think about his own demise, but it is important to make smart decisions now, especially if you own real estate. Major Transfer of Wealth Impending With the impending retirement and eventual demise of the Baby Boomers, we will soon experience one of the largest transfers of wealth in history. The transfer of wealth from the Greatest Generation to their Baby Boomer children, while significant, was not that great. The earlier generation grew up during the Great Depression, followed by World War II, and thus lost significant time to build wealth. Baby Boomers, on the other hand, have known predominantly prosperous times with only short-term and relatively minor setbacks, thus resulting in considerably more wealth to transfer to their children. Who

Considering Investment Strategies Following COVID-19

The Only Thing We Have to Fear is Fear Itself

By Stan Sonenshine in Real Estate Investment Strategies

1 month ago

1 month ago 1 0 123

The Fog of Uncertainty As we emerge from this imposed economic catastrophe caused by the fear of COVID-19, we need to consider how we take advantage of the investment opportunities it will present. Investment strategies tend to be driven by people’s current perceptions. In times of distress, we assume it will last an exceptionally long time with a weak recovery. Yet in boom times, we feel like it will never end. To successfully navigate the choppy waters, you must keep your head and have a solid plan. It is good to start with what we know. What We Know or Can Reasonably Assume We are faced with a virus for which there is no cure or vaccine and might not ever be one. The public has been scared to death even though the number of cases (relative to total population) is extremely low and primarily confined to an identifiable “at-risk

Change Is New Constant As We Consider Coronavirus Impact

Coronavirus Impact: Change Will Be Our Constant

By Stan Sonenshine in Real Estate Cycle

2 months ago

2 months ago 0 0 142

To quote the Greek Philosopher Heraclitus, “Change is the only constant in life.” As we stare down the barrel of the coronavirus rifle, we must ask ourselves what will future changes be like. Which changes will be temporary? Which changes will be permanent? Impact of Coronavirus In my last two blogs, I’ve reviewed the impact of coronavirus on the restaurant industry as well as other commercial real estate sectors. Here, I contemplate the impact of the coronavirus on the economy, urbanization, healthcare and, perhaps most interesting, people and their habits. Impacts from major societal events do not show up for a while. For example, people had fewer children following the 2008 economic crisis because they felt financially insecure; however, we are just seeing this impact now in schools, as current graduating classes outsize current elementary school classes. That recession also profoundly affected the housing market; people became more inclined to

Coronavirus COVID-19 impacts all sectors of the commercial real estate industry

Coronavirus Pandemic Impacts Commercial Real Estate Sectors

By Stan Sonenshine in Real Estate Cycle

2 months ago

2 months ago 0 2 191

Unemployment is increasing rapidly, businesses are closing, shelter-in-place is the order of the day, and experts warn this could be the deadliest week we’ve seen yet. It feels like the Apocalypse. At the same time, the weather is beautiful, the trees turn green and flowers blossom—giving us hope. All Commercial Real Estate Sectors Somehow Impacted In my last blog, I focused on the hard-hit restaurant industry. In this blog, I look at other commercial real estate sectors—all experiencing the impact of the virus and the resulting business interruption. Hotels One of the Hardest Hit CBRE forecasts “hotel revenue to decline by an average of 37% for 2020, with properties in high tourist and convention business areas getting clobbered.” Hotels have been in expansion mode, in both number of units and brands. Marriott is a good example. With most hotels, however, Marriott does not own their properties. They merely operate the

Restaurants Hit Hard during the Coronavirus Pandemic

Restaurants Hit Hard Amid Coronavirus Pandemic

By Stan Sonenshine in Real Estate Cycle

3 months ago

3 months ago 0 2 175

You never see the lightning bolt that hits you. Coronavirus COVID-19 has taken us all by surprise and continues to baffle us with its strength and uncertainty. It’s difficult to write a post about the current climate because it changes daily, hourly even. Every day, we hear of communities requiring residents to shelter-in-place as more orders are announced, clarifying which businesses can operate and which must shutter their doors. Real Estate Recessions: Causes Real estate market recessions are NOT always the result of real-estate activities, such as overbuilding, loose underwriting or easy financing. Sure, there have been real estate recessions caused by these actions, but not always. Often there are non-real estate triggers—think of the mid-70’s oil embargo, the Iraq War, inflation in the 80’s and 9/11. These events usually expose underlying market weaknesses and cause the debt markets to lock up, resulting in sharp declines in real estate fundamentals.

Home Depot's Bernie Marcus Philanthropy in Atlanta, like the GA Aquarium, has multiplier effect

Philanthropy in Atlanta: The Multiplier Effect

By Stan Sonenshine in Atlanta Philanthropy

4 months ago

4 months ago 0 0 152

We are accustomed to seeing headlines about big philanthropic donations or seeing billionaire’s names on buildings, but do you ever stop to think about the massive multiplier effect these philanthropic donations have? On everything from job growth to real estate worth to quality of life? In Atlanta, we have a multitude of big givers—from Home Depot’s Bernie Marcus and Arthur Blank to the Coca-Cola-affiliated Robert W. Woodruff Foundation to CNN’s Ted Turner. Let’s take a deep dive into how philanthropic giving impacts Atlanta, focusing specifically on Bernie Marcus. Growth of The Home Depot The Home Depot got its start with two entrepreneurs and two Atlanta stores, one in Doraville and one in Decatur, in former Treasure Island locations. Marcus and Blank grew that humble beginning to 2,200+ stores, simultaneously profiting from the DIY craze and revolutionizing the industry. The growth of Home Depot in Atlanta significantly impacted Atlanta. First, think

Job Seekers: Resume, Internship, Job Fair

Job Seekers: Make Yourself Stand Out

By Stan Sonenshine in Mentoring

4 months ago

4 months ago 0 0 185

For many, a new year means a new start in their personal or professional lives—whether it’s hitting the gym, abstaining from alcohol or seeking a new job. Whatever resolution or aspiration you set, you need a commitment and a plan to succeed. This is exactly what I tell my mentees entering the work force: Not only do you need a plan; you need to make yourself stand out. But how do you do that? Create a solid resume, prepare for and attend job fairs, seek relevant internships and market yourself with confidence. Atlanta’s Job Growth in 2020 The forecasts are in, and the good news is you can secure a desirable job in the ATL. Despite positive numbers, this is not easy. According to a recent Bisnow article, “Metro Atlanta’s rocketing job growth has slowed in recent years, from more than 4% in 2014 to 1.5% in August [2019].” But

CRE Bubble? Not If, But When

By Stan Sonenshine in Real Estate Cycle

6 months ago

6 months ago 0 0 266

Recent NREI article “Low U.S. Interest Rates Are Fueling a Bubble in Commercial Real Estate” claims it is not a matter of if the CRE bubble will pop, but when it will pop. I wholeheartedly agree with author Jay Rollins’ assessment and strategy. We’ve already seen investor push back on properties purchased post-2015 that are now back on the market. The current owners paid too much, thinking prices would increase, but in my opinion, the market has flattened—with further appreciation less likely than price deflation. The spreads between real estate yields and other financial instruments are historically low, and like Rollins, I have to believe that interest rates will increase sooner rather than later. I certainly don’t see them decreasing. The best opportunity for upside today is in new development, which has considerably more risk than buying existing assets. Historically, developers get caught by recession and rising interest rates. This time will be

CRE 2020: What to Expect

By Stan Sonenshine in Real Estate Development

6 months ago

6 months ago 0 0 233

A recent NREI slideshow “Breaking Down CBRE’s 2020 Market Outlook” reviewed economic development, tax rate cuts, CRE investment, cap rates and market trends, among other topics, when considering what’s in store for 2020. In general, I agree with CBRE’s assessment that a slowdown in absorption will occur in all sectors as supply continues to grow. We are gradually moving to the confluence of oversupply and slow down. When that becomes problematic and to what extent it creates opportunities or problems is hard to predict. I started thinking about this a few months back in “Development Market Phase: How Long Will It Last?” As expected, the impact on individual sectors will be uneven. In my opinion, retail faces the greatest degree of uncertainty due to online shopping and shifting consumer buying habits. I can’t believe that the multi-family sector doesn’t have significant overhang already, and office will be negatively impacted by the WeWork pullback.

City Centers Create Sense of Community

By Stan Sonenshine in Atlanta's edge cities

6 months ago

6 months ago 0 0 262

Atlanta’s edge cities are developing City Centers to create a sense of community, and it’s working. Since the holiday season is in full swing, it feels appropriate to continue the discussion about community I started in my last blog “The Importance of Community Engagement.” I suggested that leaning into our communities through service and events helps us feel more engaged. But I don’t believe that just happens. It is the addition of City Centers—intentional placemaking at its finest—that elevates the community’s sense of belonging. City Centers Help You Belong In a time when negativity, divisiveness and complaining feel ubiquitous, encouraging a sense of community offers people a positive feeling. While “sense of community” itself is difficult to quantify, it is absolutely a constructive and powerful force for a community’s overall health. Prime Example: Downtown Alpharetta The re-imagining of downtown Alpharetta is just one example of a city determined to craft

DRED: Death and Real Estate Decisions

The Only Thing We Have to Fear is Fear Itself

Coronavirus Impact: Change Will Be Our Constant

Coronavirus Pandemic Impacts Commercial Real Estate Sectors

Restaurants Hit Hard Amid Coronavirus Pandemic

Philanthropy in Atlanta: The Multiplier Effect

Job Seekers: Make Yourself Stand Out

CRE Bubble? Not If, But When

CRE 2020: What to Expect

City Centers Create Sense of Community

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