Claims

Remote work arbitrage (relocating workers to lower-cost second/third-tier cities) is already exhausted; anyone who could benefit from the geographic price differential has already moved, and we will see a slight uptick in office occupancy rates in 2024 as companies formalize requirements for more regular in-person interaction.

San Francisco has priced itself out of the market and is unable to address the homeless problem, making it both bad and expensive, causing people to leave and collapsing the commercial real estate market while residential rental and housing markets begin to decline for the first time.

Mexico City and Madrid offer the best lifestyle arbitrage in North America and Europe respectively—high quality of life with lower costs relative to peer global cities.

Housing sales will accelerate in 2024 due to pent-up demand from death, disease, divorce, household formation, recent interest rate declines of ~100 basis points, mortgage refinancing incentives, and alternative housing developments by VCs incorporating new cities to circumvent restrictive zoning requirements that entrench wealth transfers from first-time homebuyers to existing owners.

In real estate, commodity assets (office, retail, industrial, hotels) that all perform similar functions are bad investments; the value is concentrated in the top 25% of properties in each category that are best-in-class or offer unique competitive positioning.

Famous forecasters including Harry Dent, Robert Kaki, Jim Rickards, Mark Boris, and Martin North have all predicted the property market would crash, but instead the market has continued to rise over 3-5 years, proving their forecasts wrong.

There is a specific debate between Bill and Harry Dent around 2017 in a hotel suite where Bill predicted property would not crash until 2026-2027, while Harry Dent insisted a crash was imminent.

Prime lakefront properties in Canada (with only one cottage, on a lake with no other cottages) are a gold standard that comes up maybe once every 5-6 years per lake.

Office real estate valuations have fallen so dramatically (down 80% from 2019 levels in some cases, though recovering 160% from recent lows) that most of the downside is priced in; further deterioration will be limited, and value is emerging in office REITs at current prices.

Office real estate is in distress because the pandemic-induced shift to remote work is permanent; many forecasters predicted workers would return to the office five days a week, but this has not happened; only Class A (highest quality) office space in Manhattan shows reasonable occupancy, while the majority of B and C class office space is empty or near-empty.