The Real Estate Espresso Podcast

On today's show we are talking about the Buy On The Line Strategy ---------- Host: Victor Menasce email: podcast@victorjm.com

In September of 2019, I published an episode on the podcast entitled “Why Wework doesn’t work.” This week Wework filed for Chapter 11 bankruptcy protection in NJ. The bankruptcy filing affects the main company, and over 400 subsidiary entities that also simultaneously filed for bankruptcy. The landscape is littered with companies that have made long term obligations and have only secured short term sources of revenue to cover those long term obligations. Wework signed long term leases, many with payment guarantees that stretched years into the future. The only way out of those leases was would be to force a reorganization in a bankruptcy proceeding. The company’s balance sheet shows about 16B in assets and $18B in debts.  -------------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are looking at the energy transition away from fossil fuels. This is not real estate per-se. But it is a macro economic factor that affects our economy very deeply, even though most members of the population are completely oblivious. With global geopolitical tensions rising, understanding energy sources is critical to understanding what is happening in the economy. Energy is the economy. For every unit of economic output, there is an equivalent unit of energy consumed somewhere in the world.  You might be wondering why the price of gasoline is falling at the same time that the price of diesel is rising. On today’s show we’re going to answer that question.  ----------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show, we are talking about the importance of offering a discount without lowering your price. There is so much emphasis on sale price that the value of inventory is strongly linked to the most recent comparable sales. From the perspective of the end customer, affordability is a function of the total sale price and more importantly, the monthly carrying cost associated with that purchase. When you visit a car dealership and the dealer is offering that shiny new vehicle with a 1.9% interest rate don’t be fooled by thinking you’re getting a discount. The dealer is charging you thousands more for that vehicle in order to give you that 1.9% interest rate. They actually tell you what it costs for that financing when they say, take $5000 off the sticker price or 1.9% financing.  Most people understand the game when we’re talking about buying a new car. These techniques are not typically associated with real estate. ------------- Host: Victor Menasce email: podcast@victorjm.com

Clayton Young is an elite distance runner. He is currently ranked among a handful ot top runners in the US and top 50 in the world. On today's show we are talking about the mindset and habits that are required to do anything at a high level, whether it's in sport or in business. To connect with Clayton you can email him at claytonyoung88 at gmail.com. You can also follow him on social media with the handle _clayton_young_ --------------- Host: Victor Menasce email: podcast@victorjm.com

Chris Long is based in Central Florida where he builds and operates Longyards facilities across the US and Canada. On today's show we are talking about the market characteristics of industrial outdoor storage and what customers are asking for. To connect with Chris, visit longyards.com ------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are talking about translating vision into execution. There are many companies that have an impressive company tag line. But when you ask employees and stakeholders about it, there is usually an awkward pause. What comes after that is often a disjointed statement. At our development company, we spent a lot of time thinking and refining what our business is about. We are real estate developers. All developers have a calculator that works pretty much the same. In order to generate a profit, you need income to be higher than expenses. You want to build the best product for the lowest possible cost. All of the usual things that maximize profit. For many developers, that means squeezing the subcontractors.  When I tour newly completed projects in the market, I’m stunned at how poorly things are built. I’m astounded at the low quality of finishes. But most of all, these brand new apartments in supposedly luxury buildings are truly awful. I see living rooms with columns that make the space virtually impossible to furnish. I see bedrooms that are so small you can’t fit anything but a bed and a single night table. You’re thinking of hosting friends for dinner? Maybe have dinner in a restaurant because there isn’t really a space to entertain. That’s what I see when I look at many brand new projects. So back to our company vision.  We thought long and hard. Our company exists to build communities that people feel compelled to call home.  So what does that really mean? How does that translate into what we actually do? Does it mean sacrificing profitability?  This vision is more than just a vision, I consider it a guiding principle.  ---------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are talking about signs of stress in the construction industry.  It’s no secret that many developers have put projects on hold as a result of higher interest rates.  When we talk about counter party risk, that term conjures up an image for the GFC that started in 2008. This is the result of an asset being held by one party constituting a liability for another party. If the liability can’t be met, then the asset on the books may not be properly valued and may need to be written down. We saw the cascade of dominos across the entire banking system. The Federal Reserve recognized the linkages between different counterparties and has attempted to alter the structure of the banking system by encouraging banks to borrow from the Fed, or by putting excess reserves on deposit with the Fed. That way if the Fed is the counterparty in most cases, the systemic risk to the banking system would be reduced. Sounds good in theory.  On today’s show we are going to look at another form of counterparty risk that is rarely considered. It was brought to our attention in the past few days. Our own due diligence processes are being strengthened as a result of what we have learned.  --------- Host: Victor Menasce email: podcast@victorjm.com

Brené Brown, renowned for her research on vulnerability, courage, and empathy, delves into the heart of leadership in her book "Dare to Lead." In this captivating and insightful read, Brown explores the intersection of vulnerability and leadership, offering a refreshing perspective on what it means to be a daring and effective leader. Brene Brown is someone who I’ve been following for years. Her work on the emotions that drive behaviour has been groundbreaking. I would describe her work as being in the shadows, in involving topics that are rarely discussed in the context of leadership. At the core of this is shame. Leaders are just people and people often grapple with shame at their imperfections.   --------------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are talking about what is driving the economy.  There was a time when I thought the fear over communism taking hold in the west was overblown. Yes, communism had taken hold in China, the Soviet Union, and Eastern Europe. But we saw how that turned out. Communism is a recipe for economic stagnation. I have visited parts of Eastern Europe, the Ukraine, and mainland China. I’ve seen the remnants of communist economic policies and how it killed innovation and entrepreneurship. I’ve seen the drab grey concrete buildings with virtually no interior finishes. These cement caverns feel more like a war bunker than a home.  People who rail about communism are out of touch. Don’t they know that the Berlin Wall fell in 1989? Don’t they know that China opened up their economy to more free market forces? Have they not visited Shanghai and seen the advances that free market forces have brought to China?  We don’t need to worry about government dominating the economy here in North America. After all, we hear that consumer spending influences 70% of GDP. That statistic is quoted regularly.  So when you look at all layers of government, government spending in the US stood at 38% of GDP. In Canada, government spending at all levels is at 41% of GDP.  Communist China reports they are at 31% of GDP for all levels of government. Russia is at 36% of GDP.  Exactly what is communism? ----------- Host: Victor Menasce email: podcast@victorjm.com