Capstak's Weekly Wrap Up | September 8

by Capstak

 

1) Forbes | U.S. Cities Have A Glut Of High-Rises And Still Lack Affordable Housing

Urban density is being promoted by real estate investors and city planning officials. But, should we be focusing less on density and more on affordability? According to this Forbes article, high-rise residential construction is often put forward as a solution to the problem of housing affordability. But, 80 percent of all new construction is for high-end products, doing nothing for the affordability of our cities. In fact, according to the article:

“High-density housing is far more expensive to build. Gerard Mildner, the academic director of the Center for Real Estate at Portland State University, notes that development of a building of more than five stories requires rents approximately two and a half times those from the development of garden apartments.”

So, what’s the next idea to solve the housing crisis?

 

2) Capstak | Capstak Influencer Gary Nelson on Financing Commercial Property

Are you or your client trying to decide what type of financing you should use on your next commercial real estate project? If so, then Capstak’s recent interview with influencer Gary Nelson is a must read. During his 30-year career, Gary has underwritten and placed more than $1 billion in financing, managed the loan servicing and credit administration of a $3 billion commercial loan portfolio and overseen and liquidated more than $10 billion in bank and savings-and-loan assets for the Resolution Trust Corp. and the FDIC. Gary discusses how he chooses the right financing for his customers and how he has maintained his edge through cycles.

 

3) Quartz | Robert Shiller wrote the book on bubbles. He says “the best example right now is bitcoin.”

Is bitcoin going to be the next big bubble? No, according to Yale economics professor Robert Shiller it already is. Shiller, who literally wrote the book on bubbles,  says bubbles are created by “speculative manias” and, “The best example right now is bitcoin. And I think that has to do with the motivating quality of the Bitcoin story.” He references that market trust hasn’t been this low since 1989 and 2000, and that is driving people away from traditional investments. “There are a lot of cryptocurrencies but they don’t have as good a story as Bitcoin.” Shiller goes on to say, “There really are idea epidemics.”

 

4) Fortune | This is the First Real Estate Development to Accept Bitcoin as Payment

Even though Bitcoin has all the appearances of a bubble, that won’t stop people from adopting it. The Knox Group based out of the Isle of Man, on Tuesday, launched a commercial property development in Dubai with residences that can be purchased with Bitcoin. The development will be made up of two residential towers plus a shopping mall and is valued at $325 million. The Knox Group is the first major real estate developer to accept Bitcoin. Are we going to start seeing more?

 

5) Bisnow | Amazon Issues RFP For New $5B North American HQ

Potentially the biggest news from the week is, Amazon issued a request for proposals to get bids for their new $5 billion campus. The bid, which is due on October 19, requires the site to be in a city with at least 1 million in population and have an existing 500,000 square feet of buildings. The new headquarters is supposed to be, “A full equal to our current campus in Seattle,” which for reference is 8.1M square feet and includes 33 buildings.

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