CRE Analyst

New direction with our annual New Year predictions: Rather than calling market trends, we bottled up insights and created a quiz to help you predict how you will compete vs. your peers in the new real estate cycle. More challenges and complications. Fewer tailwinds. More losses. ...but bigger opportunities for outperformers.

20/20 hindsight: Why these posts got 100K+ engagements... We started posting about real estate trends, trades, and moves every day 2-3 years ago. A few examples starting in 2022... • No more easy money • Don’t count on distressed sale opportunities • Dry powder won’t save the day • Core capital drives pricing and it’s sidelined • Office-to-multifamily conversions are overhyped • Waterfalls are widely misunderstood • Interest rates are higher than cap rates • Don’t bet on another banking crisis • Extensions are complicated • "Negative leverage" isn’t what you think • REIT values shed light on bid-ask gaps • Nearly all buyers are sidelined • Everyone wants to be a lender (in theory) • The “maturity wall” is a myth • REITs are positioned to lead the recovery • Cap rates are bullsh*t • Apartments are finally back to fair pricing [The most recent of these posts is about a year old.] What drives our posts? The frameworks we teach in our FastTrack bootcamp, through the lens of professionals who apply them every day. Interested in understanding these frameworks? DM us if you want to explore joining the upcoming cohort.

What is private credit? [Slide 3 maps out the entire private credit space.] Ask 10 people and you’ll likely get 10 different answers. This presentation might offer the best (and most succinct) summary we’ve seen. It was delivered last week to the State of Nebraska’s pension fund. PS — In our experience working with thousands of participants, debt is often the least understood real estate fundamental. We take a different approach to teaching credit, one that works from both the borrower and lender perspectives. DM us if you'd like to join our upcoming cohort. It’s the last week to sign up.

Feeling behind in your real estate career? Read this!

Who says its hard to raise evergreen money? You just need... A household name: Carlyle Scale: $7 billion fund with 231 existing investments Outperformance: 9.5% net returns since 2015 vs. core funds' 4.2% Perceived special sauce: "Carlyle Property Investors presents a different opportunity from the peer set as the Fund is tailored towards demographic-driven demand sectors (manufactured housing, senior housing, data centers, single family rentals, industrial (IOS), and self-storage). CPI invests in assets that have the potential to become core properties through minor repositioning (i.e., moderate capital expenditures, leasing upside, and/or operating improvements)." Want to enhance your ability to understand how some vehicles are able to raise money while others remain stuck? DM us to explore our upcoming FastTrack cohort.

Fundraising looked like it was bouncing back. Then Jon Gray said this. Analyst question: Fundraising for the broader industry seemed to turn a corner in Q1 before the recent macro volatility. You’ve highlighted why real estate could perform well but how is that message resonating with LPs? Jon Gray: Conversations have improved. The tone is more open. But it’s still an underperforming sector, and when that happens, allocations shrink. My gut is this period could slow some movement into real estate. But when the recovery takes hold, capital will return — like in the 1990s after the financial crisis. Investors will be more hesitant in open-end funds, more biased toward drawdown vehicles and fresh capital. But with lower cost of capital and limited new supply, performance will improve — and real estate will get traction again. We're still early in that process. Why this matters: Blackstone is the 800-lb gorilla. Jon Gray is measured, rarely alarmist. So when he calls this a “speed bump,” you have to wonder... Speed bump for Blackstone. Earthquake for everyone else? PS — This is another reminder why it’s critical to be able to “follow the dollars” in real estate. Capital is not evenly distributed. Open-end vs. drawdown funds. Redemption dynamics. Fresh capital vs. stuck capital. If you want to build fluency in real estate capital markets, DM us to learn more about our upcoming FastTrack Boot Camp.

The ‘undersupppy’ of housing. A fake crisis? Yes, home prices are up. And yes, housing starts are down. But a lack of supply may not be driving the affordability crisis. The real culprit could extend to commercial real estate. What's the long-term correlation between home prices and new home starts? 1% What's the long-term correlation between home prices and interest rates? 73% Our hypothesis... The widespread inability of 30-somethings to own a home is a crisis, but undersupppy may have much less to do with it than advertised. The real driver of unaffordability? Ultra-low interest rates following COVID. The federal response to COVID was the most expensive intervention in U.S. history. More costly (in 2025 dollars) than WWII, the GFC, and every major natural disaster of the last 45 years. Why? Because the Fed single-handedly became the bond market's rich uncle. Rates were pushed to zero. The Fed’s balance sheet doubled. And the value of every capital-intensive asset—housing included—moved higher. This wasn’t just a supply story. It was a cost of capital story. ...with real implications. Building more homes might not restore affordability, and blindly adding units could lead to new problems (e.g., higher delinquencies). Affordability isn’t just about units. It's about capital. If we're right--and elevated values have more to do with the cost of capital than the supply/demand of physical structures--commercial real estate isn't immune. And a rebound in transaction activity could be bad for asset values. PS -- Real estate pricing is messy. Properties aren't commodities. But frameworks cut through the noise, and none matters more than the valuation and capital markets frameworks we cover in our FastTrack course. The next cohort kicks off in two weeks. DM us if you’re interested.

How does this end? A) it doesn’t b) soft landing c) crash

Would you rather be a credit fund investing in transitional assets or a bank at 10-to-1 leverage? That’s the core tradeoff playing out between banks and private credit funds. Banks brag about the safety of their loan books, but the typical bank balance sheet runs 10-to-1. So if 20% of your book defaults with a 50% severity, the bank's equity is completely wiped out. Private credit funds flip the equation. They often lend to nonbank-eligible or non-investment grade borrowers, often in the middle market and/or in subordinate positions, where yields are higher and underwriting is bespoke. But they typically use less leverage, which dramatically changes downside exposure. However, it's worth noting that private credit funds are increasingly layering on more back leverage—through CLOs, fund facilities, and structured products—to enhance returns. ...often pushing effective leverage well beyond 1-to-1. Which brings us to the real question: Is default risk more dangerous, or is leverage? Default risk slowly eats away at returns. Leverage risk can turn a shallow dip into a liquidity crisis. Notably, it’s not about which model is “better.” It’s about understanding embedded risks. (Graphic via Ares Management) PS – Our FastTrack course includes a full module on debt and capital structure. It’s one of the most technical sections we teach, but also where the most light bulbs go off. Even experienced professionals often overlook how leverage truly works. If you're looking to sharpen your instincts around debt, risk, and capital flows, DM us. Our next FastTrack cohort kicks off in two weeks.

Last week’s step up in the 10Y Treasury was a meaningful outlier. …a bigger upward move than 99% of the weekly changes over the last 50 years.