Real Estate Espresso

On today's show, we're looking at the industrial real estate outlook across the Northeast corridor.Marcus & Millichap recently published its 2Q 2026 industrial forecasts for 36 metropolitan markets across the United States. Today, we're going to focus on six of them: Boston, New York City, Northern New Jersey, Philadelphia, Baltimore, and Washington, D.C.These markets are connected geographically by the I-95 corridor, but they are not all moving in the same direction.There is, however, one common theme.The wave of new construction that affected industrial markets over the past several years is beginning to recede.------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today is the first in a four part mini-series on Industrial Real Estate across the US. The folks at Marcus & Millichap recently published 36 submarket reports across the US focusing on Industrial Real Estate. Today we are concentrating on six markets in the Southeast. --------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today's show, we're examining the Japanese yen carry trade and why its possible unwinding should be of interest to real estate investors thousands of miles away from Tokyo.A carry trade sounds complicated, but the basic idea is simple. An investor borrows money in a currency with a low interest rate and invests that money in an asset offering a higher return.The carry trade has its roots in an economic stagnation that started in 1991. Their stock market crashed in 1991 and the air came out of their real estate bubble? Over the next several years, the Japanese central bank lowered interest rates to try and stimulate the economy. By 1995 rates were at 0.5% and by 1999 they were down to zero. For decades, Japan was the natural source of that cheap money. Interest rates were near zero, and at times negative. Investors could borrow yen, convert the proceeds into dollars, euros, Australian dollars, or another currency, and purchase higher-yielding assets.Carry trades depend on three conditions: cheap funding, stable exchange rates, and confidence that liquidity will remain available.All three conditions are now being questioned.The Bank of Japan has been moving away from the extraordinary monetary policies that made yen funding so attractive. At the same time, Japanese authorities have intervened in currency markets after extreme yen weakness. Even a rapid strengthening caused by intervention can force leveraged traders to reduce their positions. We saw a preview in August of 2024. A strengthening yen and changing expectations for Japanese interest rates helped trigger a rapid unwinding of leveraged positions. The result was not limited to the foreign-exchange market. Japanese equities fell sharply, volatility jumped, and investors sold assets elsewhere to meet margin calls and reduce risk. So what happens to credit markets when the carry trade ends?------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Dr. Anas Alhajji is one of the preeminent energy analysts in the world today. He is based in Dallas Texas. On today's show we are talking about the multiple factors that are affecting energy markets and global supply chains. Most of these factors are not making headlines and are largely being ignored by the markets. To connect with Dr. Alhajji you can find him on Twitter at https://x.com/anasalhajjiHis substack newsletter is widely followed and contains extraordinary behind the scenes analysis. Daily: https://afalhajji.substack.com/Weekly: https://anasalhajjieoa.substack.com/------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today's show, we're reviewing a new book by Andrew Ross Sorkin called 1929: Inside the Greatest Crash in Wall Street History, and How It Shattered a Nation.Sorkin is best known for Too Big to Fail, his account of the 2008 financial crisis. In this book, he goes back nearly eighty years earlier to examine the most famous market collapse in American history.Most people know the basic outline. The stock market rose dramatically during the Roaring Twenties. Speculation took hold. The market crashed in October of 1929, and the Great Depression followed.But knowing the outline is not the same as understanding what happened.Sorkin's strength is narrative. He takes a complicated financial event and tells it through the people who experienced it. Bankers, traders, politicians, regulators, journalists, and ordinary investors appear not as distant historical figures, but as human beings operating under pressure.The book's central lesson is not simply that markets can fall. Everyone already knows that.The deeper lesson is that intelligent, experienced people can see warning signs and still fail to act.Why?Because the incentives of the moment are often stronger than the consequences of the future.-------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Cost Segregation Is The Key to Bonus Depreciation. To Take advantage of bonus depreciation and lower your taxes, reach out to the Cost Segregation Guys.-------------Panama is not in the headlines, but maybe it should be. Today we're talking about water levels in the Panama Canal.When most people hear that the canal is experiencing low water, they assume the immediate result will be fewer ships passing through each day.That is not yet the principal restriction.The more immediate constraint is draft.Draft is the distance between the waterline and the bottom of the ship. The heavier the cargo, the deeper the vessel sits in the water.When water levels fall, the canal cannot safely accommodate ships that sit as deeply in the water. The canal may still allow the same number of vessels to transit, but each vessel may have to carry less cargo.That means the number of ships can remain unchanged while the actual transportation capacity of the canal declines.-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

The progression from Alan Greenspan to Kevin Warsh is not simply a change in personality. It reflects four different views of how much the Federal Reserve should shape market expectations.At one end is the belief that ambiguity preserves flexibility. At the other is the belief that communication itself is a monetary-policy instrument. Warsh appears to be pulling the institution back toward flexibility, but in a market that has become accustomed to continuous guidance.Warsh seems to be drawing a distinction between transparency and prediction.The Fed should explain why it made today's decision. But that does not mean it should promise what it will do three or six months from now.There is also a concern that excessive guidance encourages too much risk taking.When investors believe the Fed has clearly mapped out the future, they may borrow short, lend long, buy duration, or sell volatility with too much confidence.A less predictable Fed may force investors to price risk more carefully.That may be healthier over the long term.-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

It's rare that I get wrapped up in the news cycle. I'm not a news junkie. But this week, something crossed my desk that I simply could not ignore. We all lived through the pandemic and were presented with data from the media that did not always line up with basic science. Those scientists, pathologists, and doctors who presented data that contradicted the official narrative were ostracized as quacks and conspiracy theorists.Kudos to Senator Rand Paul for getting his hands on the Dr. Anthony Fauci's diary. Dr. Fauci was the government's face of the pandemic for nearly 3 years. Dr Fauci was seen as recommending social policy to deal with what was an epidemic. His testimony before Congress seemed to be more focused on protecting his personal interests and that of a few researchers than getting to the truth. The entire document is 1141 pages in length and the diary starts on pageI'm not a cynic and I am not a conspiracy theorist. Dr. Fauci's own words clearly contradict his own public statements. The reason this is so important is that the lives of billions of people were upended for several years. The economic and social impact was severe. We are still dealing with the aftermath of the decisions that were made at that time. The unintended consequences of decisions that were probably well intentioned are still with us. Those decisions bankrupted many investors in commercial office real estate. Those decisions created short term demand for products that defied the long term trends. We saw a spike in demand for campers and RVs. We saw a spike in demand for vacation properties. We saw supply chain disruptions on a scale that we had not seen probably since the second world war. If there is one thing that the pandemic taught us is how to build more resilient supply chains that quite frankly we now in the current geopolitical climate and we will certainly need in the future. -----------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

We're building a project in Louisiana that has a lot of site work associated with it. In fact we need to import about 60,000 cubic yards of material to raise the finished grade of the property. The price per yard can vary widely depending on transportation. On today's show we are showing how AI is being used to find creative solutions to reducing the cost of the dirt work.----------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Eric Brunner is a CPA based in Milwaukee. On today's show we are talking about which types of improvements must be capitalized versus expensed. Many accountants get this wrong and create tax liability for their clients by mistake. To connect with Eric, visit him on LinkedIn------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)  

Mitchell Rice is based in Salt Lake City, Utah. He is the founder of ElkStone Capital Partners. He got his start in the investment management group at The Church of Jesus Christ of Latter Day Saints working on large commercial projects in multiple asset classes. After a few years he launched his own investment management business. On today's show we are talking about converting functionally obsolete hotels into workforce housing and how this is expanding the supply of affordable product in the market. To connect with Mitch, or to learn more visit https://www.elkstonecapitalpartners.com/------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

China is manufacturing solar panels at a scale that has transformed the economics of the global market. High-efficiency panels leaving China are currently priced at roughly eleven cents per watt. Some domestic Chinese prices are even lower.That sounds extraordinarily cheap. But the panel is only one component of a solar installation.The proper analysis begins with the building's hourly electrical load, not its annual utility bill.Two buildings can consume the same amount of electricity annually and have very different solar economics. A warehouse operating primarily during daylight hours may consume solar power as it is generated. An apartment building may experience its highest common-area loads during the evening, after solar production has declined.Electricity consumed directly inside the building is usually more valuable than electricity exported to the grid. Export compensation can be materially lower than the retail price, depending on the utility tariff.So, is a ten-year break-even compelling?Usually, not by itself.A ten-year payback represents an approximate unlevered return of ten percent before degradation, maintenance, equipment replacement and execution risk. It may still make sense for an owner with a long holding period, a newly replaced roof, strong tax benefits and confidence that the building will remain occupied.A five-year break-even is different. That implies roughly a twenty-percent simple return before considering residual value. For a durable system producing predictable savings, that can be highly attractive.------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Most people are still using artificial intelligence as though it were a slightly more sophisticated search engine. They type a question into a chat window, receive an answer, and then go back to performing their work manually. That approach can save a few minutes. But it misses the larger opportunity.Both OpenAI and Anthropic have recently introduced capabilities that allow you to teach the system a workflow by demonstrating it on the computer screen. You press record, perform the task yourself, and the software observes your mouse movements, keyboard entries, browser navigation, and sequence of decisions. You can then save that recorded process as a reusable skill.Think of this as training a new administrative employee. You don't merely tell them, “Prepare the weekly report.” You sit beside them and demonstrate where the source information is located, which files to open, what information to copy, how to name the finished document, and where to save it.Once the skill has been recorded, the computer can repeat that sequence.For a real estate investor, the possibilities are substantial.---------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

There are between 5.7 and 6.5 million second homes in the United States. That represents a meaningful portion of the housing stock, about 5% if you consider that there are about 133 million households in the US. When people hear the phrase second home, they often picture an oceanfront mansion owned by someone in the top one percent. But when you compare several million second homes with the total number of American households, it becomes clear that ownership extends well beyond the ultrawealthy.Some are lake cottages that have been in families for generations. Some are small condominiums in warm climates. Others are hunting cabins, inherited homes, or houses purchased near children and grandchildren.This raises an interesting question. When does a second or third home become an investment rather than simply a vacation property?Ownership alone does not make something an investment.A vacation home is primarily purchased to provide a personal experience. That is consumption, even when the asset increases in value.There is nothing wrong with consumption. The problem arises when people describe a lifestyle purchase as an investment to justify spending more than they can comfortably afford.An investment property begins with a different question.Instead of asking, “Would I enjoy owning this property?” the investor asks, “What economic problem does this property solve, and what return should the capital produce?”-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today's show is sponsored by the Cost Segregation Guys. They can help accelerate depreciation and improve your property's cash flow. Click on the LINK to qualify for a discount. -------------The Gordie Howe International Bridge between Windsor and Detroit is a major infrastructure project between two nations. But beneath the politics and engineering is a financial structure that closely resembles many real estate partnerships.Canada agreed to fund the project when Michigan declined to provide upfront capital. Through the Windsor-Detroit Bridge Authority, Canada assumed the cost of design, land acquisition, construction, and supporting infrastructure on both sides of the border.The project cost is approximately 6.4 billion Canadian dollars, or about $4.5B USD.Under the original 2012 agreement, Canada would collect the toll revenue. That revenue would first pay operating and maintenance expenses. After those costs were covered, the remaining cash flow would be used to repay Canada's capital investment and financing costs.Only after Canada had recovered its investment would the remaining profits be split equally between Canada and Michigan.That structure should sound familiar to real estate investors. It follows a common waterfall.A later 15 year side agreement introduced a different revenue structure. During that period, net revenue is divided equally.Net revenue means toll collections after direct operating expenses have been paid.Canada's half is applied toward construction and financing costs. The United States' half is directed into a regional economic development fund supporting infrastructure in the border corridor.This structure also has merit. There is no right or wrong. The real question is whether the economics can support both objectives without placing the original capital at unreasonable risk.That is the same balance we seek in a well-structured real estate partnership.We need enough cash flow to operate the asset.We need sufficient reserves to manage uncertainty.We need a credible path to return investor capital.And we need a profit-sharing structure that rewards everyone who contributes to the project's success. But a waterfall cannot create money that the underlying asset does not generate. Structure matters, but economics come first.-----------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

A few days ago I reported on the structural failure at the former Pfizer headquarters at 235 East 42nd Street in Manhattan. Late last week we learned a few more details. The structural engineer on the project has now publicly stated that the reinforcing steel specified in the construction drawings was apparently never installed on the two columns that ultimately buckled.If that statement ultimately proves to be correct, then this wasn't a design failure.It was an execution failure.The columns in question are made of steel. They are made of structural steel that looks like an I beam, except it is vertical instead of horizontal. The engineer called for steel plates to be welded to the sides of each beam in order to create a box beam out of the I-beam profile. This was not done. The photos of the failed columns clearly show the original columns with no welded plates. I've looked at the detail on the structural drawings which clearly show the treatment for four different types of columns. The columns near the exterior are the ones in question. That makes me ask a different question.How did this get past everyone?Now, I want to be careful.The official investigation is still underway. The Department of Buildings, the Department of Investigation and independent forensic engineers are all examining what happened, and no final conclusions have been reached. The city has also expanded inspections to other projects involving the same developer and inspection firm while investigators determine whether broader quality-control issues exist.But regardless of where responsibility ultimately lands, this incident exposes something much larger.A gap in quality assurance.Quality assurance isn't glamorous. Nobody celebrates it. Nobody gets awards for finding problems before they become disasters. But every high-reliability industry depends on it.Software isn't shipped without testing.Aircraft aren't delivered without  every component undergoing inspection and certification.Automobiles undergo extensive inspection on the factory floor before they're ever sold.As you think about that, ask yourself one simple question.In your own business, where are you relying on assumptions instead of verification?-----------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Burt Mulwitz is based in Pataya in Thailand. He has been investing in real estate over 7 decades. On today's show he is sharing a funny story of a 68 unit property that I suspect my brother was living in. To connect with Burt call 310-922-1175 or visit his website at burtmentor.com------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Chad was one of the founding members of Left Field Investors and today coaches passive investors on how to make thorough evaluations of investment options. Not a substitute for a financial advisor. But rather an experienced passive investor in real estate who has developed process and systems around how to evaluation investment options during the each phase of the due diligence process. To connect with Chad visit https://chadackermanrealestate.com/. He also has a starter kit that could be helpful at https://chadackermanrealestate.com/start-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

The term ROAD means Renewing Opportunity in the American Dream.The act Act became law on July 11 without the President's signature. It passed with enough votes in the Congress and the Senate that there was no possibility of presidential Veto. It is a sprawling piece of legislation containing dozens of provisions covering housing supply, financing, manufactured housing, building codes, environmental review, affordable housing programs and institutional ownership of single-family homes.The Act restricts large institutional investors from purchasing additional single-family homes once they control at least 350 homes, subject to several exceptions. Existing portfolios are not required to be sold, and exceptions remain for newly constructed housing, certain build-to-rent communities, senior housing and other qualifying transactions.This could reduce competition for scattered-site acquisitions from the largest operators. But it may also redirect institutional capital toward purpose-built rental communities, multifamily apartments and financing partnerships with smaller developers.--------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

The Strait of Hormuz is capturing headlines again as conflict between the United States and Iran escalates. Some commercial operators are reportedly refusing passage even with military escorts because crews and shipowners do not believe the risk can be managed. But viewing Hormuz as an isolated crisis misses the larger trend. Commercial shipping is increasingly becoming a weapon of war, economic coercion, and political leverage across multiple regions.We have seen attacks and interference in the Gulf of Aden, the Black Sea, the Sea of Azov, the Baltic Sea, and around strategic infrastructure in Central America. Ships are large, slow, visible, expensive targets. A relatively inexpensive drone or guided munition can damage a vessel worth tens of millions of dollars, disrupt its cargo, increase insurance costs, and discourage every other shipowner from entering the area.The ship does not need to sink for the attack to succeed.--------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Yesterday's inflation report delivered a surprise. Headline prices fell sharply, but the important story was beneath the headline. This was not a gasoline story. Core inflation was unchanged for the month, and several categories that have kept inflation stubbornly high moved lower. For investors, that distinction matters because it changes the conversation around interest rates today.The new report is the Consumer Price Index, not the Personal Consumption Expenditures index that the Federal Reserve prefers. The PCE report still showed elevated inflation. But the CPI components give us a preview of where price pressure may be heading. Core CPI came in flat, compared with expectations for an increase. Core goods declined. Medical services, transportation services, used vehicles, and automobile insurance showed softness. Those are signs of broader disinflation, not merely cheaper oil.------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

S2 Capital failed last week with the loss of nearly $400 million of investor capital. On today's show we are looking at some of the macro factors that contributed to this failure.-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

The Real Estate Espresso Podcast is sponsored by the Cost Segregation Guys. Cost Segregation is the key to accelerating depreciation and improving cash flow for your real estate assets. Click HERE to connect with them and get a discount on their services. ------------Today we are talking about what may be the beginning of a nuclear renaissance. I realize that this is a real estate podcast. But occasionally I come across something that has the potential to have global impact.Over the July Fourth weekend, nuclear startup company Aalo Atomics brought a reactor to criticality at Idaho National Laboratory. The reactor was manufactured in roughly forty days. That is an extraordinary achievement, but the real story is not the stopwatch. The real story is the system behind it.The first enabling technology is the coolant. Conventional reactors use water under high pressure. High pressure demands thick reactor vessels, specialized forgings, heavy components, and a supply chain with very few qualified manufacturers. These reactor vessels are hugely expensive and take an extraordinary amount of time to manufacture. Aalo uses liquid sodium, which transfers heat at low pressure and has a high boiling point. Lower pressure allows thinner steel vessels that can be made from plate, rolled, welded, inspected, and moved through an industrial process. That changes the manufacturing problem from one of heroic craftsmanship to one of repeatable production.Instead of building one plant as a unique civil project, the design is broken into truckable modules. A module can be built indoors, where tools remain in place, workers repeat tasks, and quality is measured at every station. That sounds ordinary because it is how automobiles, aircraft, and industrial equipment are manufactured. The building was completed in thirty six days, the reactor was fabricated in less than a month, and hundreds of fuel rods were assembled in 2.5 days.------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

David Pelusio is based in Rochester NY where he specializes in converting abandoned department stores and shopping centers into drive-through, climate controlled storage. On today's show we are talking about the formula for these types of redevelopment projects. To connect with David, email him directly at davidrlc@rlcone.com.---------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Nate Astle is based in Kansas City where he is a financial therapist. On today's show we are talking about the emotional component of money and financial decision making. To reach out and connect with Nate, visit https://www.financialtherapyclinicalinstitute.com/or connect with him on LinkedIn at https://www.linkedin.com/in/nathanastle/------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today's podcast continues our discussion of the structural failure at the former Pfizer headquarters in Midtown Manhattan, where a massive office-to-residential conversion suffered localized structural distress during construction.The investigation has only begun. Engineers have not yet reached any conclusions about the root cause, and it would be inappropriate to speculate. The building may ultimately be repaired, strengthened, and safely completed. Or investigators may determine that more extensive reconstruction is required. We simply don't know.But even before the engineering investigation is complete, another consequence has already begun to unfold.Reputation.Real estate is built on confidence. Lenders finance confidence. Investors buy confidence. Insurance companies price confidence. Residents lease confidence.When confidence disappears, value disappears.We saw this after the collapse of Champlain Towers South in Surfside, Florida. The tragedy permanently changed how buyers viewed aging condominium buildings. Reserve studies became front-page news. Deferred maintenance became a deal breaker. Insurance premiums exploded. Financing became more difficult. Thousands of condominium owners across Florida found themselves facing six-figure special assessments simply because the market had fundamentally re-priced structural risk.Whether fair or not, that event changed public perception.------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

The structural failure on 42nd St. in Midtown Manhattan this past week made headlines all over the world. The building in question was originally an office building belonging to Pfizer and is now in the process of being converted into a residential apartment building. It is the largest office to residential conversion project in US history and will result in nearly 1600 apartments.The structural design of a building is based on several factors. The first is, of course, the weight of all of the levels of the building that are being supported above the current level. The second is the lateral forces that result from the wind, pushing the building sideways.These are usually handled with sheer walls or diagonal bracing members that prevent the building from deflecting sideways.This is where most structural engineers get it wrong. The assumption is that if the wind is blowing from one side of the building, you have a zone of high-pressure on that side in a zone of low pressure on the opposite side. intuitively this makes sense. Wind tends to flow in a straight line. But in a dense urban environment with lots of surrounding buildings, the wind can and often does go in circles as it makes its way around the neighbouring buildings. In fact, there are many examples of structural failures in New York City, where the wind can often cause a building to twist like a corkscrew rather than just trying to bend to the wind. When that happens, the structural columns in the corners are the ones that experience the most stress. They're almost always the ones that fail first. I'm going to bet that wind was a contributing factor. Now if you look at the weather on the day of the failure, the wind was light ranging from 5-7 mph out of the north west. Hardly the conditions that would damage a building. The heat an humidity on July 3 triggered powerful afternoon and evening thunderstorms across the city, bringing damaging wind gusts that caused localized power outages for over 17,000 New Yorkers before conditions calmed back down. I suspect that the damage happened on July 3 and was not noticed until Tuesday when the columns progressively moved and buckled. ------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today's show, we're talking about meetings, specifically the balance between enough structure to create accountability and so much meeting time that the work itself gets pushed into evenings, weekends, and sleep.I have been looking at my own calendar, and the conclusion is uncomfortable. Too much of the week is committed to talking about work. The consequence is not merely fatigue. When focused work has to be stolen from the margins of the day, commitments become less predictable. A calendar full of meetings can create the appearance of control while quietly making the organization less reliable.The research on meeting effectiveness does not support one universal format. It supports matching the communication method to the job. Routine information should usually be written. Coordination among a tightly connected team can justify a brief standup. A difficult decision may require a longer working session. A formal operating review can make sense when leaders must examine performance, challenge assumptions, allocate resources, and leave with consequential decisions. Meeting science makes a useful distinction. If the purpose is simply to broadcast routine, non-urgent information, there is little reason to synchronize six calendars. Good asynchronous communication requires context, clarity, ownership, and documentation. It is not the absence of management. Done properly, it is management without forcing everyone to stop at the same moment.------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today we're talking about the July 1 review of the United States Mexico Canada Agreement, better known as USMCA, and what it means for anyone developing or constructing buildings in North America.Leading up to July 1, the public conversation made the date sound like a cliff. Either the agreement would be renewed for another sixteen years, or it would somehow vanish overnight. That was never the actual mechanism. USMCA entered into force on July 1, 2020. The agreement has a sixteen-year term, which takes it to 2036. The six-year review was a decision point, not an expiration date. Because the three countries did not unanimously extend it, the agreement remains in force and now moves into annual reviews.The important point is that continuity and certainty are not the same thing. The legal framework survives. Goods that satisfy the agreement's rules of origin can continue to receive preferential treatment. But businesses no longer have a fresh sixteen-year runway. They now face a recurring political checkpoint, with the possibility of changes being negotiated every year.For the construction industry, that distinction matters. Construction is a long-cycle business. A development conceived today may not buy structural steel, electrical gear, windows, elevators, HVAC equipment, or finish materials for two or three years. A manufacturer deciding where to build a plant may be making a twenty-year decision. Annual trade reviews introduce a mismatch between short political cycles and long capital commitments.-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

As usual the headline doesn't tell the story. The numbers often get revised for previous months.  This time revisions to April and May, combined with a falling unemployment rate, tell a much weaker story than the headline suggests.The Bureau of Labor Statistics reported that nonfarm payrolls increased by 57,000 in June. That is already a modest number for an economy of this size. But April was revised down by 31,000 jobs, from 179,000 to 148,000. May was revised down by 43,000, from 172,000 to 129,000. Together, those two prior months contained 74,000 fewer jobs than previously reported.Revisions are a normal part of survey-based data. More employers respond, seasonal factors are recalculated, and the estimate becomes more complete. The issue is not that revisions occur. The issue is that investors, lenders, and policymakers often react to the first estimate as though it were precise. In this case, the revised trend is materially softer than the original narrative.Now let us compare the payroll survey with the household survey. In June, the household survey estimated that employment fell by 507,000 people. The civilian labor force contracted by 720,000. The number of people outside the labor force increased by 832,000. At the same time, the official unemployment rate declined from 4.3 percent to 4.2 percent.To be counted as unemployed, a person must be without work and actively looking for work. When someone stops looking, that person leaves the labor force and disappears from the unemployment calculation. So the unemployment rate can fall even while employment falls, provided the labor force shrinks faster.That is exactly why the participation rate matters. It fell three tenths of a percentage point in June, to 61.5 percent. The employment-to-population ratio also fell, to 59.0 percent. Those measures are not perfect, but together they show that a smaller share of the working-age population was either employed or participating in the job market.------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Paul Moore is the principal at Wellings Capital, based in Lynchburg Virginia. On today's show we're talking about how the investment thesis has changed in response to market conditions. To connect with Paul visit https://www.wellingscapital.com/They also have a number of resourcesincluding their due diligence checklist available on their resources page at https://www.wellingscapital.com/resources-----------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Dipesh Sitaram is based in Austin Texas. He's a dentist, like my father. He has invested in multiple asset classes including hotels, medical, office to name just a few. On today's show we are focusing on a vertical niche within medical office. To connect with Dipesh or to learn more, visit https://acuerecapital.com/------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today we are asking a practical question. Can you get a leading indicator of what is happening in real estate before monthly or quarterly reports from the major brokerages? If you really want to look at the leading indicators, how would you do it? How could you do it? Well, as it turns out, Brokerages like Redfin and Zillow can see activity before it appears in the monthly statistics. They see searches, appointments, open houses, offers, cancellations, and pending contracts. How can an ordinary investor get closer to that same information and understand where the market is moving before the headlines catch up?-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today's show we are talking about the difference between pattern recognition and intelligence. We've all seen the cases where AI is completely lacking in common sense. In order to understand how this happens, we need to understand how AI has been trained. By examining historic patterns, AI algorithms take the lazy path to predicting the next step in the pattern. But not all patterns are predictive. The nearest car wash is really close by, only a few hundred yards. The answer to the next question is telling. If it's only a few hundred yards away, should I walk or drive? The AI then suggests that you could walk. This is hilarious and obviously lacking in common sense. Walking is not going to get your car cleaned. This is the difference between pattern recognition and intelligence. -------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Our book of the month is "This is Strategy" by Seth Godin. When this book was published, I knew I wanted to read it. I've been following Seth for years. Rather than presenting strategy as an academic discipline or a collection of management frameworks, he describes it as a way of thinking about systems, incentives, and long-term change. The result is a book that is less about business tactics and more about understanding how meaningful change actually occurs.His assertion is that what is taught in school consists of questions where the answer is known. If the teacher doesn't know the answer, they can't write a test to give you a mark. As a result, schools don't teach you how to answer questions where the answer is not known. In fact, part of the job will be to define the question. The true underpinnings of strategy come from asking these types of questions. ------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

This month Mayor Mamdani implemented a rent freeze for the next two years on rent stabilized apartments. Memories are short. This has been tried before and it was a dismal failure. But this time will be different. You see when property owners have expenses rising including city taxes, insurance, utilities,  and rents are legislated to be flat, and you still need to comply with the city's stringent building standards regulations, the math doesn't add up. At a certain point, the owners of these buildings are being legislated into bankruptcy. Most of the city's 1M rent stabilized units are in the Bronx and Northern Manhattan. About 2M residents live in these apartments.The last time this was tried an urban wasteland was the result. The South Bronx was littered with burned out buildings. Desperate building owners found that it was more desirable to collect an insurance settlement than to lose their building to foreclosure. I remember those days well. My family was from NY and there were daily news reports of another fire in the South Bronx which swallowed up a few more buildings.Between 1970 and 1981, the Bronx lost roughly 100,000 housing units to abandonment and arson, approximately one out of every five units in the borough's total housing stock. In 1980 alone there were 8,312 arson fires in NYC. When the rent is frozen, a black market opens up. We saw this in the past. Tenants in a rent stabilized property would choose to sublet their apartment for more than they were paying, but less than a market rate apartment. The large gap between the market rate and the rent stabilized units creates an incentive for this black market to emerge.But no, this time will be different. ------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today's show is sponsored by The Cost Segregation Guys. To learn more, click on the link and you can qualify for a discount on your cost seg study. -----------I'm usually pretty skeptical when someone tells me they've found a breakthrough in homebuilding.We've heard this story many times before. Modular construction was going to change everything. 3D printing was going to make housing dramatically cheaper. Mass timber was going to replace steel and concrete. In each case, there may be a place for the technology, but the promised revolution often fails to account for the entire building process.Construction is not one problem. It is a collection of hundreds of small problems, each with code requirements, scheduling constraints, labor dependencies, financing implications, and supply chain risks.But every once in a while, something comes along that deserves a closer look.That's the case with Plantd, a North Carolina company founded by former SpaceX engineers, including Nathan Silvernail and Huade Tan. Their target is not the whole house. They're not trying to replace every trade on the job site. They're going after one of the most common materials in homebuilding: OSB, or oriented strand board.Traditionally, OSB is made from wood strands pressed together with resin under heat and pressure. Plantd is making a direct alternative from fast-growing perennial grass. According to the source material, the grass can grow about six inches a day, can be harvested twice a year, and has a much higher carbon sequestration rate than pine. The company's internal testing claims the panels are two times more moisture resistant and one and a half times stronger than traditional softwood OSB. A pine forest takes 40 years to mature. These grasses can supply the same home building in 90% less acreage. And you can grow the grass next to the factory. ------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Anthony Scavo is with Basis Industrial. They are on a growth trajectory and now have more than 10M SF of industrial in the portfolio. On today's show we are talking about the changes that are taking place in the market. To connect with Anthony, visit https://www.basisindustrial.com/---------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Kyle Whissel is the principal at EXP in San Diego where they have sold more than 9,000 properties in their team. On today's show we are talking about what's happening in San Diego and Southern California in general. Definitely some unintended consequences of more relaxed development rules.To connect with Kyle, he is @kylewhissel on Instagram---------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today's show we're talking about a simple transaction, selling a portion of one property to the neighbor. Simple enough. Get a survey, update the new legal description, receive payment and record the new deed. Not so fast. The list of deliverables to perform this simple transaction involves 3 governing bodies, 5 consultants, three lawyers and about 10 pages just to list the deliverables. --------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today's episode is a cautionary tale about real estate, memory, and the story attached to a piece of land.On June 24th, 2021, Champlain Towers South in Surfside, Florida partially collapsed in the middle of the night. Ninety-eight people died. It was one of the deadliest structural failures in American history. Further investigation showed that some of the building columns were showing signs of failure three weeks before the collapse. Not only that, the original design didn't meet structural standards in place at the time the building was built. That land was eventually sold through a court-supervised process. DAMAC Properties, a Dubai-based luxury developer, purchased the site for $120 million. From a conventional real estate perspective, you can understand the thesis. Oceanfront land in Surfside is scarce. The parcel is on Collins Avenue, near Bal Harbour and Indian Creek. It is the kind of location that developers dream about.On paper, it sounds extraordinary.But real estate is not only land, zoning, architecture, and price per square foot. Real estate can have a history. And that history tells a story.In this case, the story was not luxury. It was loss.The mistake was assuming that the story of the future could overwhelm the story of the past.It could not.----------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today we're looking at the AI value chain, and more specifically, how the migration of AI workloads from centralized data centers to local devices could change the investment thesis for data center real estate.Right now, most AI feels like a cloud service. You type a prompt into an application, that request travels to a hyperscale data center, a large model performs the computation, and the answer comes back to your phone or computer. That architecture makes sense in the early phase of the market. The models are large. The chips are expensive. The engineering talent is concentrated. The energy requirements are massive.In many ways, this resembles the mainframe era of computing. In the early days, computation was centralized because local computing was not practical. Then the personal computer changed the value chain. The mainframe did not disappear, but the balance of value shifted.I believe we're going to see something similar in AI.------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

A recent Wall Street Journal article laid out the rising cost of home ownership in a very clear way. From 2019 to 2025, the annual cost of owning a home rose from about $20,600 to about $28,600. That is a 39 percent increase, compared with a 26 percent increase in the consumer price index. The biggest increases were not just mortgage payments. Insurance rose 72 percent. Home maintenance rose 85 percent. Emergency repairs rose 175 percent.The article was written for homeowners. But the same forces apply to investors. A landlord does not get a different price for a roof, a plumber, an HVAC compressor, property insurance, or property taxes simply because the property has tenants.------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today we're looking at a very interesting policy announcement out of British Columbia. The federal government, working with the province, has announced a plan to purchase more than 2,000 unsold condo units from developers in the Vancouver market and convert them into affordable housing. The reported scale is roughly 2,200 units, with a broader financing package in the billions of dollars. This follows a similar Ontario announcement, where 2,200 condo units are to be converted into rental apartments, including 550 affordable rental homes. At first glance, this looks elegant. Developers have newly built inventory that is not selling. At the same time, households are struggling to find housing they can afford. So why not match the two problems and turn them into one solution?-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Pat Zingarella is the founder of Invest Clearly, a platform for providing reviews by investors. On today's show we are talking about how the process works and the nuances of communicating investor experiences. To connect with Pat and to learn more, visit investclearly.comor email him at pat@investclearly.com-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Allie Readyhough is based in Rhode Island where she is a realtor. On today's show we are talking about the upcoming luxury second home tax for homes having an assessed value above $1M that is being imposed in Rhode Island. Some are calling it the Taylor Swift Tax. To connect with Allie, call 401-932-6597 or visit her website at https://serhant.com/agents/allie-readyhough--------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Markets are supposed to be mechanisms for price discovery. That's the theory. Markets are also supposed to be efficient.  Millions of buyers and sellers, each acting on their own information, come together and arrive at a price. That price is supposed to reflect supply, demand, risk, cost of capital, and expectations for the future.But in the real world, markets often experience distortions.Global crude oil prices are a perfect example.Some of you might remember when in 2020 that oil inventories had swelled to such a high level that futures contracts faced deliveries with no storage capacity to accept the oil. Oil prices went negative briefly.In recent days, oil futures have fallen on the sentiment that peace talks in the Persian Gulf could reduce the risk of a major supply disruption. That makes sense at one level. If traders had built a war premium into the price of oil, then any credible sign of de-escalation would cause that premium to come out of the market.But here's the paradox.The headlines changed faster than the barrels did.A peace framework, a ceasefire, or the reopening of a shipping lane does not instantly refill storage tanks. It does not instantly restore shipping confidence. It does not instantly normalize marine insurance. It does not instantly repair disrupted logistics. And it certainly does not instantly rebuild global inventories.The paper market can move in minutes.The physical market moves in months.------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

I was recently speaking with an investor who was looking at the purchase of an agricultural property. During the discussion, a question came up that applies not only to farms, but to many types of real estate.What is the property actually worth?At first, that sounds like a simple question. But the answer depends on what exactly you're valuing.Let's use the example of a coffee farm with 1,000 mature coffee trees.----------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

The Fed held today. Rates stay at 3.5%-3.75%. But here's the thing — the hold was not the news. The news was in the dot plot. The median projection for where rates will end 2026. Core PCE inflation was revised up to 3.3%. And unemployment? Revised up to 4.3%. Rising inflation and rising unemployment in the same forecast. That is the stagflation signal, and if you've been in this business long enough, you know what that means: the Fed is in a corner.Now let me tell you why they're in that corner, because this is the part that almost nobody is saying out loud.Oil went from $53 a barrel at the start of the year to one hundred and twelve  because of the Iran conflict. It's retreating now — call it $76— on peace deal expectations. That move, from $53 to $112 and back down, had absolutely nothing to do with the federal funds rate. Rate hikes can slow down the economy. They can reduce demand for gasoline. What they cannot do — not even a little — is increase the supply of oil coming out of a war zone. They cannot reopen a blocked strait. They cannot convince OPEC to pump more barrels. In fact, here is the crazy part. We are at tank bottoms in Cushing Oklahoma. A lot of folks focus on the strategic petroleum reserve as an indicator of inventory. But the tank levels in Cushing Oklahoma are far more important. These levels need to be maintained at certain minimums in order for the refineries to operate. If the flow of oil were to stop even briefly, it would force refineries to shut down in a disorderly manner and restarting would take weeks. So prices this low combined with real inventory this low is unprecedented and is not an accurate reflection of the true supply and demand situation.-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today's show is sponsored by The Cost Segregation Guys. If you own investment real estate and haven't looked seriously at cost segregation, you could be leaving significant tax savings on the table. The Cost Segregation Guys help investors accelerate depreciation, improve near-term cash flow, and make more efficient use of capital, all without changing the underlying asset. ------------Today I want to talk about a topic that's poorly understood by many investors, but it has a direct impact on every mortgage, every construction loan, and every real estate project.I'm talking about Federal Reserve swap lines and why they're so important to maintaining stability in the bond market.Recently, Treasury Secretary Scott Bessent testified before Congress and made a statement that caught my attention. He said:"Swap lines are to maintain order in the dollar funding markets and to prevent the sale of U.S. assets in a disorderly way."Many people mistakenly view swap lines as some form of foreign aid. They're not. A swap line is essentially a temporary agreement between the Federal Reserve and another central bank. The Fed provides dollars in exchange for the foreign currency. The foreign central bank can then provide those dollars to banks within its own country.Think of it as a pressure-release valve. Instead of forcing institutions to sell Treasury bonds to obtain dollars, the dollars are temporarily made available through the swap line.--------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today we're talking about an unexpected outcome from the FIFA World Cup, one that contains an important lesson for every real estate investor.Many short-term rental owners expected the World Cup to be a once-in-a-generation windfall. The assumption seemed obvious. Millions of fans would travel to host cities. Hotels would sell out. Short-term rentals would be scarce. Nightly rates would soar.But that's not what happened.Across several host cities, property owners are reporting that demand has fallen far short of expectations. In some markets, hotel occupancy is lower than anticipated, and short-term rental operators are aggressively reducing rates to fill vacant nights.The question is "Why?"The answer comes down to a principle that every investor should understand. Price is not determined by demand. Price is determined by the relationship between supply and demand.------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)