• 657 days Will The ECB Continue To Hike Rates?
  • 658 days Forbes: Aramco Remains Largest Company In The Middle East
  • 659 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,059 days Could Crypto Overtake Traditional Investment?
  • 1,064 days Americans Still Quitting Jobs At Record Pace
  • 1,066 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,069 days Is The Dollar Too Strong?
  • 1,069 days Big Tech Disappoints Investors on Earnings Calls
  • 1,070 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,072 days China Is Quietly Trying To Distance Itself From Russia
  • 1,072 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,076 days Crypto Investors Won Big In 2021
  • 1,076 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,077 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,079 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,080 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,083 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,084 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,084 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,086 days Are NFTs About To Take Over Gaming?
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

  1. Home
  2. Markets
  3. Other

I Am Still Developing My REIT Thesis

Thus, the first of the two reports for subscribers will probably be pushed off until next week. We had a problem sourcing market rents for some of the properties in the REIT's portfolios and I prefer to use actual numbers in lieu of assumptions so it took a little longer to populate the models as well.

I will discuss the rejects from the short list today, though. One aspect of crystallizing the thesis is dealing with the obvious manipulation that is occurring in the REIT space (see Here's a Big Company Bailout by the Taxpayer That Even the Taxpayer's Missed!) as well as government complicity in the purposeful opacity of the values of the mortgage assets (see the FDIC "Prudent Commercial Real Estate Loan Workouts" guidance issued Oct 30th, as reported by the WSJ: Banks Hasten to Adopt New Loan Rules and the new FDIC guidance that states performing loans "made to creditworthy borrowers" will not require write downs "solely because the value of the underlying collateral declined").

There is also the issue (as the previous link illustrates) of the sell side apparently hell bent on pumping this sector, which very well may succeed in further separating price from value, and fiction from fact. See Is Goldman Preparing To Upgrade The REIT Sector? It is quite possible that I may issue a direct challenge of research and opinion, comparing my work and thesis directly against the titans of Wall Street, eg. the (overly) esteemed Goldman Sachs. I will need very high volume (new) media outlets to counter their reach, but I believe I may be able to accomplish that. Stay tuned, this may very well get interesting!

The delay in the thesis development stems from my trying to surmise if the actual state (as in the explicit overvaluation, portrayed in a property by property fashion, rolled up to an entity level number) of the collateral properties in question were actually released into the public domain, would it cause an "everyman for themselves" dash for liquidation. The European bank that asked me all of those questions in 2008 about my GGP work - see "GGP and the type of investigative analysis you will not get from your brokerage house"- (which I never charged them for), should be VERY greatful they followed my heed and chose not to refinance those loans!

After all, prudent participants should realize that we are not going to see 2006-7 pricing anytime soon and kicking the can down the street in anticipation of such is bound to end worse than where said banks/lenders happen to stand right now. That is, unless they are trying to build up other revenue streams in anticipation of creating a cushion for the inevitable CRE hit. The problem with that thesis is the longer you wait, the bigger the CRE hit will be. With that being the case, those who snatch their crumbs off of the table first, get more crumbs to snatch. It is possible, if given the correct selfish incentive, capitalism may again rear its eclectic head.

 

Back to homepage

Leave a comment

Leave a comment