Right now, interest rates – and inflation – have been tame for so long that I wonder if we are not really considering a possible imminent outcome, which is that due to all the government spending, inflation goes kind of crazy to the upside. If so, have you considered what would happen to your investments in real estate? Would it hurt your existing deals by reducing the value of what you own? Would it cause defaults on indebtedness? Would your borrowers not be able to make their payments? Would your tenants not be able to pay their rent? Are there CPI hurdles in the documentation that would harm your investments? Would other negative outcomes ensue? To be clear, I am NOT predicting that that will happen. Trying to think ahead, I know I don’t know whether there will be inflation coming, but I am wondering if maybe we are just too used to ridiculously low-interest rates. I mean, the ten-year T-Bill getting near 2% “feels” kind of high, doesn’t it?Read more
As the Chairman of Duval & Stachenfeld – a law firm in mid-town NYC known as The Pure Play in Real Estate Law – I am inviting you to join The Real Estate Philosopher®. This will consist of my thoughts and also thoughts of friends and colleagues.
It will not be published in any traditional media – it will go only to friends of our firm. The purpose here is very simple – to put forth thoughts in the real estate world that are different, provocative, and challenging of accepted wisdom. Hopefully, nothing said here will be mainstream thinking.
You may be wondering how I am qualified to write on these topics since I am “just” a lawyer. However, I have an unusual place in the real estate world. As the Chairman of The Pure Play in Real Estate Law (one of the largest real estate law practices in NYC), I interact with an incredible number of real estate players. This ranges from small real estate shops with nothing but a gleam in their eyes, to some of the largest real estate institutions in the world, and everything in between. This gives me a unique and global perspective and allows me to act as an amateur philosopher in the real estate world. This has always been my hobby and it is what I love doing.
a.k.a The Real Estate Philosopher®
Alas, I am not as famous as Seinfeld (at least not yet), but we said the same things about NYC only a few months ago, and it is starting to look like we have a solid point. To start out by being just a bit of an apologetic humbug, I will note that I have been writing non-stop about the strength and power of NYC as the place to invest in – and lend on – real estate...Read more
Hello, real estate friends. Welcome to 2021. I am guessing you might feel a sense of relief that 2020 is over with. COVID is still circulating and as awful as ever – and actually worse than ever - but at the same time, 2021 looms up ahead of us with the hope of better times to come. Here are my thoughts as a mixture of trends I am seeing plus some predictions for this year:Read more
Retail to many is a location where the retailer takes products from a producer of the products, puts them on a shelf, marks them up 50%, and customers come in and buy them at the higher price. The retailer gets the markup (less its costs). I would call that business "Old Retail." But then there is a completely different kind of Retail, a location where the owner of a brand, or something that people need or desire, has a competitive advantage. The most obvious is an Apple Store, but there are many more, and you know it when you see it since it was packed with customers (before COVID) and will be again (after COVID). Technically this kind of business is also Retail, isn't it? But it is hardly struggling. I have coined the phrase, which you have seen in my prior writings, "Power Niche" to describe businesses that derive their competitive strength from a niche that they have ownership of. I would call this business "Power Niche Retail."Read more
My belief was that in a general sense, a country like ours with its entrepreneurial spirit and Democratic form of government would do what it always does when things go wrong and allow the “creative destruction” of capitalism to cause the rebirth of new businesses as quickly as other businesses died off. And that has surely happened – I loved this article, by way of example: Is It Insane to Start a Business During Coronavirus? Millions of Americans Don’t Think So.Read more
“The office is dead,” say the headlines all over the place. Seriously? That is what I am hearing. Since clients and others keep asking me what I think about this, I will weigh in. I have a few thoughts to start with: The office is not dead The office is not dead The office is not deadRead more
Perhaps my biggest defect as a predictor of the future is that at heart, I am sometimes too optimistic. Maybe it is my natural contrarian instinct not to fall prey to the media’s irrepressible spirit to seek out and promulgate the most depressing and negative news possible. So here I go again. As a philosopher, I will do my best to be strictly analytical, albeit with a slight optimism bias……Read more