The TreppWire Podcast: A Commercial Real Estate Show 338. Timeless CRE Lessons: Market Cycles, Interest Rate Timing, Iconic Deal Failures, & Office Distress
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Jul 2, 2025 Explore fascinating insights on the cyclical nature of commercial real estate, highlighting the importance of the 'grandmother's money' rule for risk management. Discover how FOMO influences market decisions and the effects of today's interest rate disruptions. Delve into high-profile deal failures, like the $5.4 billion Peter Cooper Stuyvesant Village case, while examining rising office delinquencies and the forecasting of maturity defaults. Gain timeless lessons that apply to both newcomers and seasoned investors navigating this evolving landscape.
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Grandmother's Money Rule
- Manage other people's money as if it were your grandmother's money to avoid excessive risk.
- This mindset helps rein in aggressive instincts and promotes conservative investment decisions.
Markets Always Cycle and Rhyme
- Markets are cyclical and disruptions differ but often produce similar outcomes.
- Success comes from spotting local opportunities even when macro trends are unfavorable.
Leverage Risks and COVID Shock
- Leverage cuts both ways: over-leveraging leads to severe losses if values drop.
- COVID was an unpredictable shock that revealed overly optimistic underwriting in office real estate.