What do people here think about the CRE REITs like STOR or Healthcare REITs like WELL after they’ve come down about 50% off their all-time high? Personally I am happy to buy and hold them for the very longterm at those levels.

If you ask a broker, especially a residential broker, it's always a good time to buy real estate. Zillow and Redfin are brokers so no surprise that they think the market won't go down.

IMO, as a renter, people continued to pay their rent even though politicians were telling them they didn’t have to because they don’t trust politicians.

Really terrific interview. Great insight into the housing market at such an important inflection point. Nick was clear, knowledgable and comprehensive in his analysis. Thank you for this helpful information.

Good interview, thank you Nick and RV team. RV- Please bring more Real Estate content, for active real estate investors/developers

Great interview! Nick, thank you so much, I really enjoyed your perspective. RE is under-covered on RV. I am in KC, MO and am always amazed at what happens on the coasts. I have about 40% of my nw in and about 30% of cash flow from duplexes here. I feel so fortunate (thus far). I have been so lucky regarding all CV-19 developments.

What this discussion on LA commercial real estate fails to address is “Hollywood accounting”. LA is the wage theft capital of America, because Hollywood’s managers pursue a policy of under paying people, or not paying them at all. The excess funds are laundered through other services, like real estate! It’s a real thing. Everyone in Hollywood has been or knows someone that’s been robbed working in the industry. This includes the retail, especially restaurant and transportation industries. Celebrities put pressures on their management to get costs low who put the pressure on small business owners else suffer being black balled. Hollywoods black money economy funds a ton of market mispricing, like those $1000 square foot shops on Melrose which remain empty (no one shops on Melrose, you’re either at Beverly Center or WeHo...) are complex money laundering spots, with money acquired through wage theft. On average, an employee serving the film industry (all the way from maids cleaning wealthy homes to line cooks and servers) lose an average of $6,000 a year based on my wage theft study. (Started studying it as I noticed not being paid OT etc and speaking with people that admit things like “oh yeah it’s normal you might have to wait 3 months for your money!) so, this is something NOT DISCUSSED because many people, many many important people would lose their jobs. It’s petty theft every week, straight up financial burglary by years end. Not kidding - LA’s commercial real estate market is the sum of market price dynamics and wage theft. If the Feds passed federal anti-wage theft legislation with actual criminal / jail / prison sentence penalties, real estate values would lose 20-30% a square foot as launders get caught. Unfortunately people like myself can’t speak up cuz liable and slander out here will get your name put on a spreadsheet and every hiring manager will have it on their “red list”. It’s a real thing. Can’t make this up - LA is wage theft capital of America, because they can get away with it. 90’s was worse - back then celebs openly joked about contract killings but it wasn’t jokes...

Any mention of Industrial real estate such as warehousing or industrial REITS?

Great view from someone who is actually seeing the impacts in all of the traunches of the rental space! I wonder what the following impacts are going to be though? As time goes on and income continues to lag, how will landlords try to handle it? forbearance? forgiveness? evergreen the lease in some way? seems like once the value that starts evaporating from balance sheets a fire sale may be in our future..

Hi Nicholas. I enjoyed the video and I'd like to hear your views on the Australian real estate market. If you could address that in a future update, it would be great!

Was looking forward to having RV bring someone to finally discuss CRE. But this fell way short. Nick seems like a nice guy but does not provide much depth or useful dialogue on the state of CRE, you could pull up a Bloomberg/Real Deal article that would sum up his video in a 1/4 of the time. Would be nice to have someone discuss relevant themes in CRE like flow of institutional capital (domestic + foreign), cap rate compression/expansion in larger context of capital markets over the last decade, current bright-spots like last mile distribution and logistics assets near gateway cities, differences between how workforce housing vs Class A multifamily is performing in this environment (compared to '08), political headwinds such as rent control and commercial rent control, commodification of housing (single family + multifamily) since the post war period, evolution of the capital stack, risk appetite and incentives for LPs vs GPs over the last decade, and finally demographic changes.

Thanks Nick, nicely done! I can relate to most of your perceptions about the LA market as I live here as well. The one data point that I'm viewing differently than you is the state of multi-family supply (tight) and rents (stable). I had actually already begun to see large inventory of rentals come to market due to high prices/lack of affordability. Covid accelerated this IMO as I'm seeing even more supply and rental declines, especially in the higher priced neighborhoods. Really enjoyed your insights. Thank you!

Half of those books are on my shelf as well. I've gone through "The Power Broker" a few times myself.....

Hi Everyone! Sincerely Appreciate all your support and ideas from the comments below. Will try to address some of the questions on the next update.

Good interview and analysis. Need to get him back to follow up in a few months

Thanks Nick, I'm down in Orange County and wanted to share another interesting multi-family data point: the Irvine Company is reducing rents in some communities to 'market rate' reflecting about a 5-7 percent haircut. I suspect they are being proactive, reflecting their post COVID market assumptions.

Nick was great and very glad to see a bit more Real Estate coverage on the RV platform. It would be nice to see some quality RE updates bi weekly on cap rates, credit, rent collections and forbearance issues as things are rapidly fluctuating on the ground during these times. Thanks To curator Milton for responding to our requests for more quality Real Estate updates.

Great interview - very knowledgeable about a variety of asset classes within real estate. I am in the hotel investment industry and off the cuff, investors believe value of hotel real estate is likely down around 30% from YE 2019 values - in some cases, more (i.e. large hotels with significant meeting space and numerous F&B outlets). Likely very little if any debt liquidity for the hotel market until late Q3 / Q4 of this year, and then it will likely be expensive bridge loans looking for 50% LTV and interest rates in the 8 - 10% range. Loan sales will be the most liquid market for the near future. There will likely be a large amount of hotels for sale (bank owned / in special servicing) to hit the market later this year and into 2021. Economy hotels have held up fairly well. Smaller, select service hotels (Hampton Inns, Courtyard Marriotts, etc.), will be the first to start to come back in the next 18 - 24 months, with drive to, leisure markets also fairing better than most. As Nick touched on, the big question is how are some of these hotels that were already in a bad financial position repurposed into other asset classes (likely apartments). The major hold up on that discussion will be the brands as there are major liquidated damages associated with terminating their franchise agreements.

Excellent interview regarding real estate markets. I have been a commercial real estate developer/investor for 50 years, and currently, in "retiremen,t" manage my own portfolio of residential real estate. I found Nick's commentary very fresh, honest, and perceptive, displaying common sense and street smarts. The questions posed led the interview to a informative and and helpful discussion regarding estate markets in the United States. Good job, Nick and RV.

Hi everyone, we've seen some of your comments about not being able to playback the video--after looking into it, we discovered some subscribers may be struggling to access the video because our video hosting site is having issues with servers being down in the UK. They're working to resolve the issue swiftly. We're keeping tabs on the situation, and we apologize for the inconvenience this has caused some of you.

Thanks for speaking Nick. You come across very clear and honest. feel very similar to your views of the future. Many investors used way too much leverage, and the replacement owners will ask very conservative in the future. You are right to question the viability of Rent cash flows --- one of the biggest assumption people are making is in the "Return to Normal" calculation. Certainly, there remains much to be answered in all sectors fo real estate.

Wait until unemployment insurance runs out on the 30+ million people who have applied over the last month. THEN you will start seeing a lot of mortgage defaults. Way too early to make a call on this. I liked his rational analysis.

Excellent informative interview. Thank you Nick Halaris and Real Vision.

I own a home that I rent out in a small college town on the west coast. I'm proactively lowering rent for the next 12 month lease term in expectation that the campus will be closed in the fall and the rental market will suffer and rents will plummet. I'm hoping by doing this it attracts someone other than students to rent my house long-term. Already seeing similar homes up for sale since late February still on the market with 1 or 2 $10k price reductions. I don't think this is a good sign.

Hi Nick, Thanks for the great interview with full of information. Do you have real estate investments in Hawaii in your portfolio? If so, how have they been doing and do you see many distressed properties with great upside potentials? How do you see Hawaii hotel and rental properties will play out in the next two years? Much appreciated in advance! Best, Desmond

Nick seems to be a good guy and has some insights. For RV there is a lot more to be done here.

"Americans aren't looking for handouts; they're looking for a chance to be successful." +100

Great discussion - I got a lot out of this. Thanks to Mr. Halaris. I would appreciate seeing more real estate-focused conversations from RV in the future.

I love how he's just giving facts and numbers. this is 10/10

Distress in the RE markets don't show up until after the banks stop getting paid. Landlords are more flexible than banks. I am a real estate developer - I think Nick was spot on. Getting new financing will be tricky. Those with good balance sheets will have some good opportunities in the coming liquidation of hard assets. Banks will reach for those assets after the market settles down and the real value of hard assets can be determined more correctly. We have already seen solid local businesses vacate property that turned a good profit pre-COVID. SIDE NOTE - I have been thinking that if RV could present information related to "value" of losses or gains in the employment market. I believe one could determine the average salary of the people that are unemployed it will reveal a lot about their future ability to be employed again. If economist could value weight both the percent employment numbers and percent unemployment numbers it would offer enormous clarity in knowing whether a given sector of the economy will be impacted. For example - if most of the unemployed souls have lower incomes, them a RE builder would know whether those unemployed will impact future home buying. Those that sell good and services have target markets, so knowing whether their markets are impacted would be helpful.

Nick, great interview. Really glad you touched on the point of inflation propping up a lot of pro-forma performance metrics. I'm in the REPE hospitality space so I thought I'd also mention that a) the reason that (I believe) that the bid - ask spread you mentioned remains elevated in CRE is due to the fact that the loan forbearance hasn't filtered its way through the system yet i.e. sellers are yet to feel the real pain of the impending liquidity crunch; and b) regarding the CMBS debt - this type of debt can sit with the special servicers for an extended period of time (up to 12 months in some cases) which further delays sellers pricing expectations Appreciate your honest feedback on what you're seeing, hopefully RV will get you back on soon.

which consultancy companies are working with hotels and REITs to help them restructure? Any names suggestions? Tring to invest in companies that will benefit from impaired balance sheets.

Thank you for this interview, I typically find RE based interviews to be very heavily bias. I appreciated Nick's straightforward observations of the market.

Cannot Play Video in several different browsers!

great stuff

Been a long time between comments. Outstanding!

Nick comes over as an honest guy when talking, No hidden agenda. Feels trustworthy.

Well grounded, realistic observations. In a sense nothing actionable except preserve capital until some certainty emerges. Do like his ballpark 20% downward projection as this recession/depression is not RE specific so not as drastic as GFC but price action may follow that pattern but less extreme. Ultimately just one of a myriad of problems.

Cannot play the video for some reason. First time it has happened. Please could you re-upload?

Honest commentary from a knowledgeable resource on the ground. No grand theories; just observations. Refreshing

Excellent commentary, and more evidence that the impact of COVID will be deflationary.

I had the same problem that GL . could please re upload?

1/5 hotels not re-opening in New York is quite a bullish assumption

Great commentary Nick. Seems more authentic than some of the previous conversations on real estate. I do think you’re right that if we’re unable to find a vaccine or get people back to work there will be serious damage done to the economy. Not just real estate. It is too early to be sure. The San Francisco Bay Area real estate market is also notorious for its affordability problem. What are good indications to look for when trying to figure out what is going on? I believe your narrative about rents being too high. What’s the best way to track ?