Rates, risk & real Estate: Starwood REIT limits withdrawals

Commercial real estate and focus real estate, one real estate trust says it will limit investor withdrawals. It's a Starwood REIT. OK, so they're, they're tightening redemptions. Not to make like like I'll get all alarmist about the the space, but it has people talking about commercial real estate again. You had the story yesterday when CMBS buyers, even on AAA loans, we're seeing losses for the first time since the financial crisis. We all remember B REIT. You have SL Green real estate's done poorly this week. How concerned are you about this issue? So it goes back to the idea of being idiosyncratic. And you may remember I actually used commercial real estate as my contrarian idea going into this year. But the concept was the space broadly has beaten up. It may continue to get beaten up as long as interest rates stay high. People think that's a direct negative for all commercial real estate when it's not. And so you can flesh out different winners and losers beneath the surface. So SL Greens had a tough week, I think. I think it's really just the space getting drawn down a little bit as interest rates are higher. But it's up 13% year to date. Another company in the portfolio, Lamar Advertising, which is the billboards, up 12% year to date. Now I have some losers too. I have Postal Realty, which just owns post offices, easterly government properties, which is like DEA and FBI buildings. Those ones are down like 1012%. But I think you, I think it's not something that you want to paint with the broad brush. Like we know there's trouble there, but it's not right. I'm glad you said that all reach are not created equal. All commercial real estate stories are not created equal either. But again, it's just has this conversation back on the top of the page. So, So first of all, let's address Starwood and Barry sternly, Barry and I know Barry, incredible investor and I think he's doing the right thing, frankly, in terms of gating the fund. Now, when you invest in a fund, that language is there, the general part and the GP can do it. And why is he doing it? Sure, he could sell the assets, but he'd sell them at a rock bottom price. And why do that? Now he's seen, let me finish Jenny. He's seen many cycles and this will cycle assuming he went into the right properties. Now in terms of commercial real estate, I I think that there is a big problem. And I also think, sure, there are ways to play like agree Realty, which puts up, you know, the Walgreens and all the others, great company unaffected by this, but there's still that tidal wave of refinancing and the banks cannot write down the properties while the rents are current. Now as those leases roll off, the value is going to come way down because of the occupancies that I'm talking about office building, but also multi res, which has been untouched for decades, including really in 2008 that's starting to show some signs of weakness. So I would not want to touch commercial real estate here at all, not even a buildings. There'll be a time to. The question is why do it? The risk is not justifying the potential reward at this point because the risk is not fully recognizing the stocks. But wait, I need to say something really important. Why do you put those gates up? Because he knows the individuals who are invested in S3 on their own would behave badly. Bad behavior and short termism is going to wreck the investment returns. Barry Stern look looks at that and says, hey, over the long term, there are excellent returns to be had here, so don't force me out. He's putting those gates up to control behavior. You didn't say that. You didn't make the point strong enough that it's to control behavior. That's the point is to control what is to do. It's not to force a sale of it and impact the investors that are staying with them. And it's not individuals to go in there. You've got to be a high net worth individual who's more sophisticated according to the this is not whether gating. The point is he's got a view. The point is he's got a view that it will recover. What I'm saying is that's great for a private vehicle. For a public vehicle, That's not what's going to control the valuation. I understand, but I'm trying to get at solely under score. Put it in bold whether our viewers should buy no Reit's no like the one that Jenny owns and others. I don't I don't see government, you know, landlords being an issue. I do see commercial real estate overall as being an issue, whether it's warehousing where Amazon's shedding thousands of warehouses and they were over bid up, whether it's multi family apartments, way too many are being built. So I would wait. So yes, I think they should avoid.

OTHER NEWS

21 minutes ago

Yield Today, Growth Tomorrow: 3 Stocks to Keep Building Your Wealth

21 minutes ago

Gus pinpoints 'mismatch' exposed by Slater's 'gamble'

21 minutes ago

Denmark XI vs England: Starting lineup, confirmed team news, injury latest for Euro 2024 game today

21 minutes ago

Prosecutors’ notes on jurors upend dozens of convictions

21 minutes ago

My daughter's bones break at the slightest touch but she's a happy little girl

21 minutes ago

Alex Meruelo hits major setback in quest to build Coyotes new arena

21 minutes ago

Christie Lewis facing big damage repair bill because her rental home wasn't big enough for her wheelchair

21 minutes ago

I Thought I Was Having Twins but It's Quintuplets & Now I'll Have 7 Babies Under 3

21 minutes ago

Is it illegal to unplug an EV while it's charging?

21 minutes ago

Retirement regret: What 1 in 4 Aussies wish they'd done after quitting work

21 minutes ago

WNBA Player Angel Reese Paid Homage To Michael Jordan In Custom Sweater

21 minutes ago

How to watch Netherlands vs France for FREE: TV channel and live stream for Euro 2024 game today

21 minutes ago

Taylor Swift’s first purchase after signing a record deal was straight out of Mean Girls

21 minutes ago

Sutherland, a devout patriot, said Canada can't "become a clone" of another country

21 minutes ago

Moment burglar is served up some satisfyingly painful instant karma after trying to break into a Chicago home

24 minutes ago

Massive, historic 'America's flagship' must leave Philadelphia port. But where can it go?

24 minutes ago

Donald Trump and Joe Biden are gearing up for their debate next week. Here's how they'll prep.

24 minutes ago

Election date betting row: Keir Starmer accuses Rishi Sunak of 'total lack of leadership'

28 minutes ago

Kylie Kelce opens up on dealing with fame, what it's like being married to Jason - and her reaction when fans address her children by name

28 minutes ago

Kim Kardashian digs into a vanilla cupcake with a cherry on top... after sharing she is only 114lbs and would 'never' gain weight for a role

29 minutes ago

Dutton’s nuclear plan lacks logic and detail

29 minutes ago

Why quiet vacationing raises questions about PTO and the generational divide

29 minutes ago

Teenage skateboard stars closing in on Olympic place

29 minutes ago

Proposed EV solutions are 'costly' and 'won't work very well': Bjorn Lomborg

29 minutes ago

Trump Mega Donor Miriam Adelson Opens Up Cash Spigot

29 minutes ago

Red Wings Offseason Injury Report: Yzerman Gives Update on Larkin, Husso, Lyon and Edvinsson ahead of NHL Draft

29 minutes ago

Sergio Perez gives peculiar reason for Spanish Grand Prix penalty incident

29 minutes ago

Wayne Rooney and Gary Lineker criticise Premier League officials Anthony Taylor and Stuart Attwell after controversial VAR call as Xavi Simons is denied a winner - but do you agree with decision?

29 minutes ago

POLL: Which classic UK TV show would you most like to comeback?

29 minutes ago

Jack Grealish posts update on what he's been doing this summer after brutal England snub

29 minutes ago

Tory war on civil service fats cats with pledge to slash public sector

31 minutes ago

Netherlands coach Koeman says referee made mistake with disallowed goal

31 minutes ago

What's up with Menendez's independent Senate bid? New Jersey Democrats share their thoughts

31 minutes ago

The Supreme Court rejects a settlement in a water dispute between New Mexico and Texas

33 minutes ago

PhD student accused of horrifically killing friend’s newborn baby after assaulting tot’s twin

33 minutes ago

Koch family’s 15% stake in Nets values struggling NBA franchise at $3.8 billion: source

33 minutes ago

The Vapes of Wrath

33 minutes ago

Judge orders Quebec to pay over $144M to taxi permit holders for abolishing permits

36 minutes ago

Tesco shoppers vow to 'fill up the trolly' with mouthwatering new Lindt chocolate

36 minutes ago

Rylan Clark and David Tennant win big at LGBT Awards as tribute paid to Robin Windsor