YouSaid · the spoken record

Jonathan Litt

lines on the record: 47
first: 2020-06-05
most recent: 2020-06-05
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“I wish I knew the tenure. It was going to be at 60 basis points. That would have made investing a lot easier. All the wall of worry while rates have been coming down about rates going back up. You could have just dismissed and bought and finance shorten held on for the ride.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Suggestion. So I always say to my kids to the extent they listen to me or people that work for me, it's content because Technological advancements have eliminated a lot of jobs, and I just looked at my career, the trading floor is emptying out, the sales force is emptying out, the people that did all the stuff to get our research reports ready to go out, those jobs are gone. But I'm a content guy, and if I look around at people who have long careers, if you're content, like you're a content guy, Barry, right? We got content right here. You're a content guy, you can have a long career. And so figure out how to create and develop content, whether it's picking stocks or writing research or creating new technologies. I think that's the answer to the future.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And you lose track as we've been here for like a nanosecond in the scheme of human beings being on the Earth and the development. And I think it's a wonderful book. It puts life into perspective, our lives into perspectives, and really some of the damage that human beings have done to this planet. And hopefully being able to get ourselves out of it. So I thoroughly enjoyed that book.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Guess they used to make the next cookie. And these two women who were food tasters could tell when they ate an Oreo cookie if it was the original or if it was the excess and the remade cookie. You know, I think about that in my career, and I've been doing real estate a long time, and I think about the example I talked about earlier with Liberty, where I didn't have the numbers of my fingertips, but I was able, when I ran into that CEO in the hallway, but I was able to sort of do the math, the rough math in my head and come up with $62 share in value. And that's just something, and then the company got sold at $61. That's just something that comes with putting the hours in. And I think that's such a valuable lesson. And, you know, that's why I had my kids read it. As they're going through school, and I keep reminding them about it. The other book would be Sapien, which is humanity. And, you know, I read that book actually twice.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, one of my favorite books I've read in the past few years is Malcolm Gladwell's Outliers. It's an old book I reread it. And I made all my kids read it. I made them talk to us about it. And, you know, in that book, he has this concept of 10,000 hours. You know, if you spend 10,000 hours doing something, you're going to get good at it. And the people who really put in, whether it's the time in the pool or the time at work or practicing an instrument, you put that kind of time and energy into something, you're going to master it. And he has got a great people that he talks about in there, cookie tasters. And I didn't know this about cookies or food tasters. But when they make an Oreo cookie, the cookie, the excess dough.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And it took him 10 years, but he was able to put in great retail uses on the ground floor. And then Bloomberg's office space in the middle and some condos on the top of that building and took something that was undervalued in the public markets and created billions and billions of dollars of net worth. And throughout his career and my career alongside him, watching him do that over and over again has been enormously valuable. And frankly, you know, something which we practice, in particular in the activist work that we do, where we try to find these undervalued real estate in the public markets and go about unlocking that value.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he didn't buy it because he wanted to be in the barmer store business. He bought it because he wanted the real estate. So he shut the department store down and then redeveloped all of the real estate that they own. Obviously the killer location was the full city block, which is now the Bloomberg building.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. So Sam Zell was a big influence, probably for me and many others. And he's always been incredibly gracious with his time that he'll spend talking with me and speaking at conferences. And he and I've done a lot of fireside chats together. And I was just talking to him last week. And he's just got his finger on the pulse. He's very quick. He gets it, and he's really been a fantastic mentor to me. The other one is a gentleman, the name is Steve Roth, who runs tornado. And I mentioned him briefly before. And he's the one that really focused me on buying cheap real estate in the public markets. And the big, when I met him, the big thing he had done recently was buy the Alexander's department store chain.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Everybody loves that. That is fascinating when we wait for each new episode to come out and we watch it. So that's been a lot of fun to watch. But we're not watching a ton of TV, oddly enough.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I don't listen to a lot of podcasts. I'm going to listen to so many years now. I see you as some great speakers. But when we're in the car and we have the kids, we listen to how I built it. We listen to some great episodes on Spanks and Kate's cookies and how those businesses were created. We love those.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Was going to be a one direction train down because if you knew that, you would have just loaded up in real estate 30 years ago and rode the train as interest rates fell and the valuations of real estate increased.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Interest rates going down means that financing costs are going down. That means that the valuation of real estate is likely going up, but not all real estate's created equal. I think warehouses, data centers, cell towers, single family for rent are going to see valuations of their real estate go up materially over the next several years. Whereas the valuation of the malls, the shopping centers, the hotels, the casinos, the office buildings are going to be more challenged because the secular headwinds that are impacting those sectors. So they may see valuations hold. They may see them decline, but I don't think they're going to go up as much as they could otherwise given the interest rate decline. And if I look at my career, the one big surprise that I wish I knew before was that the tenure”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Lot of them are going to be really challenged. You know, you would ask me a question earlier about valuations and how real estate will be valued in the future. And I don't think I answered it. I think one of the fascinating things that's going to come out of COVID is the Fed dropped rates from, call it, 2% to a half a percent, or the Fed didn't, the tenure treasury yield went from almost 2% to a half a percent.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think it's going to take a long time. But I do think that that fraction of the malls that remain open are going to be very successful. We're going to have a much smaller footprint for many of the retailers. Those malls are going to see high traffic. People still want to go. I was on the board of Talbot Centers. And when you go to some of their assets and they have the best mall portfolio in the U.S., you go to some of their assets. I remember one down in Florida, Dolphin Mall. There was somebody following me around. And I'm like, why is this woman following me? And she was following me to get my parking spot. And then she called her husband. So he drove over and she just asked me to wait because there was no parking spots available in the lot. And that exact scenario isn't true at many of their malls, but it is true, right? Where they are full and people want to go out. So I don't think they're all going away.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“There were 2,000 regional malls in the US 10 years ago. There's going to be a fraction of that in the future. And how you repurpose those malls that are no longer viable is going to be a real challenge. And I think it's a challenge for the towns where they're in because they were big taxpayers. And tearing down a mall is not an inexpensive proposition. The population has moved away from that location. It's a challenge as to what you can put there. I don't know that there's a clear answer. These things might just sit empty, if you remember Bloomberg took over the old Alexander's department store building in its current location. That sat empty for 10 years before Vornado built what is today, the Bloomberg build.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“What happens at the House? Do you need a vestibule built into the home so that the delivery guys can put the things inside but not be able to get into your home? And now with work from home pandemics, we have four kids, the six of us living in this house. Maybe are thought to downsize an empty nestor was premature. And maybe you'll see less downsizing and you'll see less of the sort of end of life of the homes and the downsizing being postponed or not done at all. So it's going to be really interesting to see how this evolves. But I do think it was ushered in by technology and the productivity that Employers like myself are enjoying as people are working from home.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or ridehailing the Ubers of the world, becoming more ubiquitous, will the commute be as troubling for folks? Because right now, if you live in the Burbs, you go to the city and you use mass transit, you got to take your car to the train, you got to get on the train platform, you got to take the train in, then you got to get on the subway, and then you have to walk to your office. If you start eliminating some of those steps or making that whole process easier with autonomous cars, the view is that that's going to change where people live. And now with work from home, that's going to clearly accelerate it. An interesting point on this, which you didn't bring up, but I think is related, is some of the home builders are thinking about what happens when we don't need two car garages because people don't have the second car because they're using autonomous or ride hailing services. So how do you redesign the home? What about Amazon deliveries and other deliveries are becoming a bigger part?”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, I think it's going to open it up. And I think it was already opening up with the ride hailing services like Uber. And like you, you go in your car. I do a lot of cycling here in Connecticut with a group of guys. And, you know, we'll go 30 or 40 miles out from where we live in Connecticut. And we've been commenting the past three or four weeks how there's all these cars with New York license plates driving around in these communities clearly looking to escape either renting homes or looking to buy homes. And we've been riding here for 20 years and it was a real noticeable uptick to see all these New York plates hanging out in Connecticut. And I think the work from home, you don't need to be five minutes from the train station if you're going to take the train in. And you don't mind a little longer commute if you're not going in as often. And one of the arguments that I've heard, and we'll see if it'll play out, but as we get to autonomous cars,”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have an office space, it'd be cheaper to have a store, it can be cheaper to rent an apartment, to buy an apartment, and some of that will keep some of those millennials in the city. But it doesn't take a big change, right? It doesn't take 30% of the people moving out of the city to cause a ripple in the market. If we see a 1% decline of population each year for the next three or four years, That's going to be a real challenge, and that'll make it more affordable for folks.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“This demand. What's fascinating about New York is we're overbuilding the office market. We've overbuilt the hotel market. And we've also seen overbuilding in the for rent and for sale apartment market in New York. And this is in a market which is supposed to have high barriers to entry. So what happened in apartments particularly in New York is there were tax benefits that were granted to build an apartment building. Those tax benefits were expiring. And so a lot of developers rushed to get as many deals approved as they could. And that resulted in oversupply in Manhattan. I think what's really, to your point, we talked about this a bit earlier about the cultural and economic and excitement that goes in New York City. One of the challenges to that for many people is the cost of living in New York City. I think the cost of living in New York City is going to be lower in the next several years. I think it's going to be cheaper.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, most new construction of single family homes is on the outskirts of town. That's maybe an overstatement because it town's too remote. But inside the, let's say, highway circle, the first circle is pretty well developed. So there's not going to be a lot of room for a national home builder to come in and buy 100 acres and build the homes. So they're going to have to go a little further out. Now, what's interesting is with the work from home, the individuals are willing to go a little further out as well because they don't have to commute every day. So we got to monitor that supply and make sure it doesn't get oversupplied, which right now we've been underbuilding the single family market since the financial crisis. I don't see that as an immediate challenge. Clearly, when I got in this business 30 years ago, the beautiful thing about New York is high barriers to entry. You can't build no new supply.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Clear off ramps. If this doesn't play out the way we expected, whether it's in the first six months or in the third, fourth, or fifth year, we're constantly monitoring the off-ramps for it not working. So I think the key as we're looking at the housing space and as you suggested, we may have an undersupply and prices going up too quickly. We just got to keep our finger on the pulse of it and make sure we're aware of what's going on and then reassess our investment rationale.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Continue the prices probably won't get out of hand because the builders will build new homes and sellers will put their homes back on the market and the inventory will clear. And I think it'll be much more rational. But time will tell. The key thing about being an investor in public real estate is you can't just have a thesis, put it in the bank and forget about it. You have to be in the market every day talking to as many folks as you can to see if those trends that are underpinning your investment thesis are changing. And when they change, you got to reevaluate. I talk a lot with my team about the off-ramp. It's easy for them to come with their investment thesis and their presentation about why we should buy a stock. And so when we go into a name, we have”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So the single family home prices bottomed, I'm going to say the end of 18 and have been accelerating and they're now going up about 4% a year. I don't think that's terribly concerning because it's not like we saw in the housing bubble where they were going up much more dramatically. The other advantage that we have in the single family market post-COVID is 30-year mortgage rate is probably going to decline. I mean, it's down 60, 70 basis points now, but we're probably going to see that it's going to be down over a percent. And so the individual or the couple that was living in an apartment or somewhere else now has the ability to buy a home because it's more affordable because the interest rates are so low. And so I think that the demand model can”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I always tell my investment team, we have to know our company's coal. We don't know when we're going to get the opportunity to buy them because they're cheap enough. But when that happens, the market goes against the down or it goes against the company. We want to be ready to move. And in the midst of the crisis in March, we saw the homebuilders and the single family for rent guys get really cheap, and we started buying them. And we were calling every day, anybody we could call, to find out what was going on with new home sales and what was going on with the ability of the tenants in the homes to pay rent. We got comfortable that it was not going to be a total disaster.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So obviously, the American dream we all know live in a home. And with COVID-19, it accelerated the movement of the millennials out of apartments in the homes, in our view. And if you talk to folks that are living in apartments now that are like cooped up and they're afraid to press the elevator button, they don't want to be on a high floor. All the cultural benefits of being in an apartment in an urban setting had dissipated during COVID-19. And they were thinking of moving anyway. They were at that age. And so what we've seen is that the public companies that own homes and rent them out and the companies that build homes saw, much to our surprise, a real pickup in demand the second half of April and throughout May. And one of the things we love.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so I think the activism is a great way to find these diamonds in the rough, in the real estate market and work with the boards and management teams to unlock the value. And we don't like to see companies going away in sales. We'd much rather see companies fixed. In this case, it was likely the only way it was going to get there to that kind of valuation. So we think it's a great way to buy cheap real estate in the public markets. And when we see these pension funds buying in the private market at full value, we think they should be doing it in the REITs.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Said, well, give me a second. Your stock's at 50, and I did the math in my head, and I said, so like 62 bucks a share is what you're worth? He goes, yeah. And I was like, okay, so how are you going to get to 62? And he realized you probably shouldn't have said that to me. But we had a nice call with the board a few days later and said, look, if you have a way to get to 62 without selling the company, don't sell it. But these guys are paying big prices and they got a lot of money to put out. You should call Blackstone. You should call Pro Logic. You should call Brookfield and see if they'll buy the company. And again, to their credit, they, a little reluctantly, but they did engage with the three big buyers and ProLogus ended up buying them for $61 a share. A valuation that this management team was unlikely to ever get the stock to on their own.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Liberty. And we began a discussion with the board and the management team. And we said, you know, if you just sold the rest of your office portfolio, we think you could close the gap to NAV. And we also think you should develop a succession plan and refresh the board. And I got to say, and our activist, my career as an activist, this board was very professional and listened and responded. They announced six weeks later they were going to exit office and the stock moved nicely. We got somebody on the board maybe six months after we started our campaign. But then what happened at this conference a year ago was Blackstone did that transaction. And I ran into the CEO in the hallway. And I said, Bill, what did you think of the Blackstone transaction? And he said, my portfolio is better than that portfolio. That portfolio is worth that valuation. My valuation is even better.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, we had an activist campaign going in a warehouse company. And warehouse is a hot property type. Very strong demand. Rents are going up quickly. Valuations are going up quickly, as we saw with that Blackstone transaction. And we had started an activist campaign about nine months before this conference in June of 2019 in Liberty Property Trust, which was a warehouse company. Whereas the other publicly traded warehouse companies were trading at premiums. And we thought the reason it was trading at a discount was because it had an office component, which people don't like office. Investors don't like office. And because the company and the management team had made poor capital allocation decisions. So if people wanted to buy warehouses, they'd buy one of the other companies. They wouldn't.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we like buying cheap real estate in the public markets. And sometimes those stocks are dislocated because people don't like the fundamentals or they don't like management or something, but they're not fundamentally broken companies. And in those cases where there's something that's”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Wild. I remember there was one day when our group of stocks REITs traded a 40% range in one day. It was just mind-boggling. And the key was really to have low nets and tight risk controls during that period. And I'll never forget that song, the REM song. It's the end of the world as we know it. It kept flying around in email boxes. And of course, we all got through it and real estate's gone on to be a great place to be.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Supply was high and financing was difficult. And I was of the opinion and our view was it was over. The bubble was breaking and that was our view on the real estate market. But it was also at that time my view that there's going to be an opportunity for me to start the investment firm that I wanted to start back in 05. And by the first quarter of 2008, I spoke with the folks at City. I told them what I was looking to do. And they were very supportive. They seated our fund. They allowed some of my folks to join me. And we launched the business of August of 2008. Fortunately, we were quite bearish and we were able to make some money in 2008 on the market. But it was.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“But at that time, we also sent bubble gum machines out to our clients suggesting there was a bubble forming in commercial real estate. Prices were flying higher, interest rates were low. And I said, you know, this isn't the time for me to go out and start a firm because I think there's a bubble and it's going to break. I'd rather wait for the bubble to break and then get out and start a business that's investing in these stocks. And so we sent the bubble gum machines out. By June of 2007, it was actually this week in 2007. I was at a REET conference and we met with 50 CEOs.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very classic, Sam. And he and I have stayed in touch ever since and he's been a great mentor to me throughout my career. So I did that. And then I accidentally became a sell side analyst. And I built a great franchise. We were the number one ranked group for the majority of the time I was there. And we were very focused on making sure we were advocates for the investors in REITs and not a shill for the investment bank. And so we pursued our research quite aggressively, picking stocks and calling out misdeeds on the part of management. And I loved it. I had a blast doing it, and I had a great group of folks that I worked with. and a great team and I ended up running not just the US but I was the global property strategist Citigroup and it was great fun but around 2005 I wanted to get back to the investment”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sam comes in with his motorcycle helmet and he slaps it down on the conference room table and introduces himself. And I said, Sam, you know, look, I apologize in advance, but I've read this prospectus cover to cover, and I have like four legal pages worth of questions, and some of them are going to be a little tough and a little probing. And he looks at me and he goes, John, I was shaking in my boots. Fire away.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you know, it's funny. I guess when you look at it in hindsight, you know, at the time, I got into the real estate business to buy real estate. And I did it privately and then I did it publicly. And then the Wall Street firms that came, I was very aggressive as a buy-side investor when these companies were going public and reviewing the prospectuses and challenging the CEOs on why they were restructuring the deals a certain way and the Wall Street firms that were taking the companies public said, hey, we'd rather have you in the tent fissing out than outside the tenth pissing in. And so I accidentally became an analyst and went to Solomon Brothers. I just kind of digress for a second. So Sam Zell was taking his first REEC public and he came to the office. And, you know, I was a young guy and I had my yellow legal pad and I had like four pages worth of questions. And I sat down with.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely. I mean, we flicked our disaster recovery plan on immediately, and because we were one required to by the SEE have a plan, but we were regularly testing it. And you were up and running the next day. We didn't have to buy anything. Everybody was a go.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Thousand people that worked in an office every day, you'll probably go to 750 people with that other piece being they're in today's, somebody else is in two days, and that's not going to go to 50% or zero in my mind. But you're going to have that hotelling of office space. You have your laptop, you come in, you grab an office, you grab a desk, whatever your pay grade is, and you set up your appointments and you have conference rooms and you have meetings and lunches and other colleagues come in on those days. I think that's likely how it's going to play out. And I think that's facilitated by technology. The technology didn't exist 10 years ago where that was really feasible. But the technology exists today and people want it.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“In Connecticut for 12 years. And I make sure I'm in the city one or two days a week and I set up external meetings. I set up internal meetings with colleagues. And the excitement in the energy in New York will always be there. But I think what's going to happen, there's going to be a hybrid model that's going to develop.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the reason why New York works, and New York will always be a major market, is you have a brain trust. People in Manhattan and the tri-state area. So if you want to be an employer, you can come here and you can access that brain trust. I don't think that's going away. And we're not saying New York's going to see a 30% population decline. We've been seeing the population fall about 1% a year for the past three years. We think that it accelerates a couple of percent naturally. And if you just look at demographics and a lot of investing in real estate is just looking at demographics, where is the pig in the python going to be? And right now, the millennials are at that prime age to start families, and they're moving out of urban cores, and they're moving to the Burbs. And that's going to happen with or without COVID. It's been accelerated because of COVID. I think New York, like myself, I've been working.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Had the millennials getting to the age where they were starting families and wanted to move to the Burbs, and we already saw the population decline in the past three years in Manhattan. And this is going to accelerate it. I think single family, whether it's for rent or to buy, is going to be a strong place in the real estate market. I think New York City office is going to be very difficult over the next several years.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Particularly as it relates to New York at how the productivity is quite high and the office use is likely to decline in the future. And so office was already soft in New York. And I think this is going to really accelerate a downturn in office in New York. And it's going to accelerate a downturn in major urban office markets and major urban residential markets. Because I think as people discover that they can work from home and maybe go to the office one or two days a week, they're going to move to the burbs. And as they move to the burbs, they're going to move further out. And so this dichotomy of urban cores being adversely impacted and suburban markets being positively impacted, I think is with us for the next three to five years.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“notaries with the stay-at-home orders is quite difficult. But I suspect we're going to start getting price discovery in the next three to six months where the private equity guys are going to be buying real estate. As John Grace had a Blackstone following March, they could buy on the screen, but they couldn't buy in the private markets. And they bought $11 billion worth of securities on the screen. So they clearly were opportunistic in buying at that time. And the bosses of the big companies saw that it worked better than people thought. And many of them lived through 9-11, and it was very poor to work from home for the week or so after. This time it's really working smoothly, and whether it's Gorman at Morgan Stanley or Fink at BlackRock,”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So COVID-19 really turned real estate on its head in certain property types. And we've been spending very intense period, March and April trying to figure out what the landscape is going to look like. The last time I remember this type of an intense impact on real estate was after 9-11. And of course, the predictions that occur in the days and weeks after a crisis like this, some are going to pan out and some aren't. And so it's important to use that period as a lesson for some of the things that might occur in the future. I would say we're not seeing a lot of price discovery in the private markets on real estate because it's too soon. And it's hard to close real estate. You know, we were talking to the private equity guys and getting a deal closed if you need government approvals and”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“You know what? We can't put this money out right now because the returns are not attractive enough. And our argument is you should be buying the public companies at big discounts rather than going out and buying it in the private market where you're paying essentially net asset value or where the assets will trade.”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, it's an interesting question. What we specialize at Atlanta Buildings is buying heavily discounted real estate in the private market. And that exists almost all the time. Not RITS as a group, but there's always a stock or a sector where you could buy it at very substantial discounts to private market values. What's always fascinated me is the private capital that is piling up on the sidelines is putting the money out at the private pricing, which is often relative to the stocks we're buying, materially higher valuation than what we're buying it for in the public markets. And I think some of that private capital in 18 was looking at the valuations on some property types and saying,”
2020-06-05 · Masters in Business · Jonathan Litt on Real Estate Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source