The Basics of Real Estate Investing | SALT Talks #176 | Summary and Q&A

TL;DR

Panel discussion on the future of real estate post-COVID-19, with insights on distressed buying opportunities, winners and losers in the market, and the impact of interest rates and inflation.

Key Insights

• 🎭 Loan sales have created opportunities for distressed buying in the debt market, particularly in non-performing loans and loan portfolios.
• 🛀 Secondary and growth markets within major cities are showing resilience and attracting attention from investors.
• 👪 The impact on different real estate sectors has varied, with hospitality and retail experiencing significant challenges, while multi-family and industrial sectors have fared better.
• 🥺 Uncertainty in the office sector has led to a slowdown in leasing activity, but the long-term effects are still uncertain.
• 👶 The housing shortage remains a major factor in favor of investing in multi-family and creating new residential properties.
• ☠️ Interest rates and inflation trends remain uncertain but are being considered in investment strategies, with expectations of a low interest rate environment and controlled inflation.

Transcript

hello everyone and welcome back to salt talks my name is john darcy i'm the managing director of salt which is a global thought leadership forum and networking platform at the intersection of finance technology and public policy salt talks are a digital interview series with leading investors creators and thinkers and our goal on these salt talks i... Read More

Questions & Answers

Q: Are there any distressed buying opportunities in the real estate market right now?

While there are some distressed opportunities arising from loan sales and non-performing loans, they have been limited so far. The full impact of COVID-19 on distress in the private real estate market is yet to be seen.

Q: How has COVID-19 affected different sectors of the real estate market?

The hospitality and retail sectors have been hit the hardest, while multi-family and industrial sectors have remained more resilient. The office sector has seen uncertainty and a slowdown in leasing activity.

Q: What are the key factors to consider when investing in real estate in the current market?

It is crucial to assess the experience of the fund manager or sponsor, their track record through different market cycles, and the capitalization of their investments. Additionally, attention should be given to leverage and financing structures.

Q: How long do you think it will take for cities like New York and San Francisco to fully recover from the impact of COVID-19?

Recovery for major cities heavily reliant on international migration may take around three to five years, depending on the resumption of international travel. Domestic migration patterns are also shifting, with increased interest in secondary and growth markets.

Summary & Key Takeaways

• Canyon Partners and Crow Holdings discuss the impact of COVID-19 on the real estate market and the opportunities it presents.

• Robin Potts highlights distressed buying opportunities in the debt market, with an emphasis on loan sales and the impact on asset values.

• Michael Levy focuses on the growth in e-commerce and the resulting increase in demand for industrial real estate, along with the trends in the office sector.