The Real Estate Espresso Podcast

Latest Episodes:

The State of Retail Feb 22, 2024

Show notes

Commercial brokerage JLL just published their retail real estate report for 4Q2023. The report contains a number of interesting insights.

Today’s show complements the interview we had with Michael Flight last weekend on shopping centres. Michael has been investing in shopping centres for decades and he is a real expert in the space.

The JLL report highlights that the majority of the growth is in the southern states.

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Host: Victor Menasce

email: podcast@victorjm.com

Will Sora Benefit Humanity? Feb 21, 2024

Show notes

On today’s show we are focusing on a change that is looming in the world of real estate marketing.

It’s well established that the average person has a hard time visualizing what their new home or perhaps their rental apartment will look like when fully furnished. Some furniture businesses have been investing heavily in the technology to help you visualize what their furniture would look like if placed in your home.

That is very useful and can really help potential customers in making a buying decision on that new sofa or coffee table.

When a developer shows renderings of a future project these images or animations are helpful in visualizing the future project.

But there is little doubt that what we are seeing is an artists rendition. Nobody is fooled into thinking that they are seeing a real image. The images and videos are helpful, but not misleading.

Enter the world of generative artificial intelligence.

The next version of Chat GPT is version 5 which has not been released. Some of the industry analysts that I follow are saying that version 5 has not been released because it is actually too realistic.

From a text description, it is possible to generate a photorealistic video that matches the text directive. The problem is not that an animation can be created from a text description. That’s cool and frankly even desirable for a number of applications.

The problem is that if an AI generated video is indistinguishable from a real video, the brain has a problem consuming any content in the future. We have no moral, ethical or psychological dilemma when viewing an animation.

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Host: Victor Menasce

email: podcast@victorjm.com

Price's Law Feb 20, 2024

Show notes

What type of organization do you want to work with? Are bigger organizations necessarily better?

We’ve all heard of the Pareto Principle, this is sometimes called the 80/20 rule. 80% of the revenue comes from 20% of the customers. 80% of the complaints come from 20% of the customers. 80% of the wear on a carpet happens on 20% of the surface area. There are countless examples.

It’s not a rule, or even a law, but something that occurs with enough frequency that it’s got to be more than coincidence.

A less known rule is called Price’s Law. This speaks to the productivity in an organization. It says that 50% of the work is done by the square root of the total number of people in the group.

So if you have four people in the group, then 50% of the work will be done by two people. Seems pretty efficient so far.

If you have 100 people in the group, then only 10 people in the group will be responsible for 50% of the output, and the remaining 90% will contribute to the remaining 50% of the output. Now either the 90% are really awful, or the other 10% are extraordinary.

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Host: Victor Menasce

email: podcast@victorjm.com

Why Is The Internet Broken? Feb 19, 2024

Show notes

On today’s show we’re talking about what’s wrong with today’s internet.

You might be wondering why we are talking about technology on a real estate podcast. It’s because the internet is the primary source of information for real estate investors and developers. We’ve come to rely on it. If the document you seek is not accessible online, then it’s as if it doesn’t exist. If it is online, but you can’t find it, then the effect is the same.

Today’s internet has not adapted to the introduction of AI.

Search algorithms rank the search results based on popularity. That’s why Amazon ranks higher than the independent corner bookstore that’s across the street from the University in your home town selling used books. Intuitively that makes sense. In an orderly world where natural organic traffic forms the majority of traffic, this approach makes sense.

Of course there are numerous other criteria that Google and other search engines like Bing use to determine when to present a result.

Google has become pretty good at distinguishing between legitimate and spam content. The search algorithms have become progressively smarter at staying ahead of attempts to fool the algorithm. But in recent months, there has been a degradation.

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Host: Victor Menasce

email: podcast@victorjm.com

Uncovering Alterior Motives with Chris Miles Feb 18, 2024

Show notes

Chris Miles comes from the world of life insurance sales. On today's show we're piercing the veil on some of the practices that are rampant in that industry that everyone needs to know about. To connect with Chris, visit moneyripples.com or check out his Money Ripples youtube channel.

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Host: Victor Menasce

email: podcast@victorjm.com

Shopping Center Investing with Michael Flight Feb 17, 2024

Show notes

On today's show we're talking with Michael Flight. He's been investing retail since the early 1980's. We're talking today about the pressure points in retail. To connect with Michael or to learn more visit libertyfund.io. There are numerous resources on the website.

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Host: Victor Menasce

email: podcast@victorjm.com

The Best Investment Structure Feb 16, 2024

Show notes

On today’s show we are talking about some of the structures out there, pooling of funds in a blind fund, or investing in an individual project. There are so many ways to invest. The question is, what are the pros and cons of one approach versus the other.

It really starts with getting educated on the type of investment that is going to fit for you. Investments run the full gamut, from buying existing stabilized assets at one end of the spectrum to undertaking large scale development at the other end of the spectrum. These are vastly different in terms of the rates of return that are possible, as well as the timeline and the risks associated with each of the asset types.

In general, Greenfield development projects have the greatest value creation potential but take the longest to bring to fruition. Fully stabilized projects deliver cash flow from day one, but have limited short term upside. Growth in value will come through rent growth over the longer term.

When evaluating any investment, we always look at three major factors

the team
The specific sub market
The deal itself.

Due diligence on all three of these elements takes a lot of effort to do it thoroughly.

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Host: Victor Menasce

email: podcast@victorjm.com

The Taking (I Mean Donating) of Land Feb 15, 2024

Show notes

On today’s show we are talking about government taking land from you with what appears to be no compensation.

The concept of eminent domain is well entrenched in real estate law. It says that government can demand your land in exchange for just compensation if the taking of that land is in the public interest.

For example, if the public good is served by building a new freeway or an airport, the only way to assemble the land would be by undertaking a claim under eminent domain.

But there is another way to get the needed land, slowly over time. Increasingly cities are using this other method to get what they need without paying a single penny to get it.

They will ask you to donate the land.

Where we see this most often is when the property fronts on a major arterial or collector road.

As density increases those streets need to widen to handle more traffic. Along the way some enterprising developer realizes that this would be a good location for an apartment building and requests a zoning change.

In exchange for the increase in density, the city may ask you to donate a strip of land to the city in order to enable future widening of the road when the time comes.

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Host: Victor Menasce

email: podcast@victorjm.com

Making Sense of Conflicting Economic Data Feb 14, 2024

Show notes

On today’s show we are talking about making sense of the conflicting economic data that is being reported by different government departments.

Let’s start with GDP and then we will look at employment numbers, and finally we will look at inflation versus real earnings.

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Host: Victor Menasce

email: podcast@victorjm.com

I Went To The Dark Side Feb 13, 2024

Show notes

I’m a real estate developer. I’m pro-development. I’ve had projects denied by city council as a result of community opposition. In every case, I’ve been shocked by the intensity of community opposition and truly felt that our project was designed to enhance the community, and not detract from it.

Some community opposition has been based on absolutely made up stories that are not at all connected with reality. That’s a polite way of saying that residents in some cases will tell a lie to further their objective of keeping growth away from their community.

Last week I joined a community opposition group. The experience has been a fantastic learning. So much so, that I thought it would be worth sharing the experience with you.

On today’s show I’m sharing my personal experience being part of a community opposition group. This was a Facebook group that surfaced around a proposed suburban development project that local residents think is too big, and out of place with the suburb at the far extremity of the urban boundary. Th project consists of 431 apartments, including a 25 story tower. The original proposal for the site was three 9 story buildings, which already would be a stretch for the community.

The group is barely a week old and has 618 members. The target is a public hearing involving the local city councillor that is scheduled for two weeks from the date the group was formed.

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Host: Victor Menasce

email: podcast@victorjm.com

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