If one's portfolio is overweighted in a specific asset class two dominant strategies are needed:
1. Cost value strategy - i.e. buying more of said asset at discounted prices. Of course, time-cost is the bigger concern here. Consequently, the question that begs, per potential appreciation in property values is "is distributed work" a passing phenomena or are we at the center or a truly 4th transformational change with economic production: farm to factory to office and now home or anywhere? Base on our analytics we believe that by 2030 only 20% of workers from large enterprises will be working in large corporate building in cities. Furthermore, the % of fully distributed and decentralized startup and scaleup are adopting- at increasing levels a 100% distributed model. Accordingly, developers and owners adept at accomadating shift in use .i.e dual live/work etc models will do better.
2. The REIT Hedge:
Alternatively, capital markets need a REIT hedge instrument to mitigate against adverse price movements. Having done 15 years of site selection and corporate expansion advisory work for over 60 F 500 firms globally, we realize that direct players in the commercial property markets and CFOs who lease them need a tradable product at captures the price movement (+-) in the performance of the city itself. So while commercial real-estate + REIT prices go up or down, many other assets (public goods/policy design) directly affect the values of livable, workable (economic), sustainable (climate assets ) and governable (financial) assets of the city. Imagine all the features discussed about Detroit's performance - captured through a decentralized priced algorithm on its performance, and real estate operators and investors can purchase that instrument, generate yields (capital gains) or hedge to offset losses, what a joy it will be? We're working on it: www.zagada.com - Cheers -Phil
If one's portfolio is overweighted in a specific asset class two dominant strategies are needed:
1. Cost value strategy - i.e. buying more of said asset at discounted prices. Of course, time-cost is the bigger concern here. Consequently, the question that begs, per potential appreciation in property values is "is distributed work" a passing phenomena or are we at the center or a truly 4th transformational change with economic production: farm to factory to office and now home or anywhere? Base on our analytics we believe that by 2030 only 20% of workers from large enterprises will be working in large corporate building in cities. Furthermore, the % of fully distributed and decentralized startup and scaleup are adopting- at increasing levels a 100% distributed model. Accordingly, developers and owners adept at accomadating shift in use .i.e dual live/work etc models will do better.
2. The REIT Hedge:
Alternatively, capital markets need a REIT hedge instrument to mitigate against adverse price movements. Having done 15 years of site selection and corporate expansion advisory work for over 60 F 500 firms globally, we realize that direct players in the commercial property markets and CFOs who lease them need a tradable product at captures the price movement (+-) in the performance of the city itself. So while commercial real-estate + REIT prices go up or down, many other assets (public goods/policy design) directly affect the values of livable, workable (economic), sustainable (climate assets ) and governable (financial) assets of the city. Imagine all the features discussed about Detroit's performance - captured through a decentralized priced algorithm on its performance, and real estate operators and investors can purchase that instrument, generate yields (capital gains) or hedge to offset losses, what a joy it will be? We're working on it: www.zagada.com - Cheers -Phil
Strong optimistic take! And indeed that Draft vibe was unmatched.
Phil, what is your current opinion on the state of the market?
Lots of risk, lots of dispersion, lots of opportunity.