Real Assets Adviser
June 1, 2015: Vol. 2, Number 6Buy For $195.00 Add to Cart
The Grinder: Dave Pottruck, the defrocked CEO of Charles Schwab, is back in the billions with HighTower Advisors
The hands. That is one of the first things you notice about Dave Pottruck. They are big, even in relationship to his bearish body.
They are the same hands that used to drag men down to the mat and gridiron at the University of Pennsylvania, where he was named Most Valuable Player on both the varsity wrestling and football teams. He later won a gold medal in wrestling at the Jewish Olympics.
Going for the Backbone: Investors like how infrastructure combines growth with bond-like cash flow
Alternative investments have been around for almost as long as investors have been investing in stocks and bonds. They were originally marketed to those with a high tolerance for risk and the ability to absorb large losses — these were not investments for wealth preservation or a retirement portfolio. In recent years, however, the term “alternative” has evolved to simply mean anything besides stocks and bonds. Some alternatives, such as real estate, are now considered a mainstream investment. Others are getting close.
Cooling Their Heels: After years of strong growth, REITs are expected to perform more modestly in 2015
Publicly traded REITs have experienced a long bull market, posting positive returns for more than half a decade. Investors have flocked to the sector, attracted by its strong dividend yields in the current low–interest rate environment. At the same time, low interest rates have allowed REITs to borrow money cheaply for expansion.
Welcome to the Machine: As technology unfurls, real estate markets alter course
If one looks at the history of technology and investment in real estate, it would unfold in a structure not much different than that of a classic, three-act play. The drama of the story, if not the tragedy, is introduced in Act One; the response to the onset of the drama unfolds in Act Two; and we behold the bright and sunny future in Act Three.
Making the Grade: Real estate goes to school
This isn’t your father’s dormitory. This isn’t even your dormitory.
In the past 10 years, student housing in America has changed dramatically. When you went to college, you probably shared a room, and the bathroom was at the end of the hall. Today’s college dorms usually have private bedrooms and bathrooms. After your freshman year, you probably lived off-campus in a funky house shared with too many fellow students, or in a run-down apartment rented from an absentee alumnus. Today, new off-campus housing built for the millennial generation has James Beard restaurants, spas, sundecks, and supportive, accessible staff.
The Rapid Rise of Crowdfunding: It is helping investors locate deals with unprecedented speed and efficiency
Crowdfunding is attracting quite the crowd when it comes to real estate investing.
Wanted: Trillions of Dollars: New financial instruments might finally put sorely needed private dollars to work
Many have reported on the trillions of dollars needed to meet the nation’s infrastructure needs. We are all acutely aware of the challenges the public sector is facing finding money to develop public assets. The overall conclusion is that private capital is essential to address the infrastructure gap.
Fracked Again: With oil prices half of what they used to be, energy companies turn to 'refracking' to maintain a profit margin
We are in a strange new place in oil drilling, and we all can take a guess that I am talking about fracking. This is a good start, but as quickly as we have come to understand “fracking” or horizontal drilling, we are already seeing changes in this drilling method.
An Asset Standing the Test of Time: Some investors are seeing the forest for the trees
There is one investment that stands tall in all economic environments — and sometimes even produces significant yields.
Higher Learning: Some investors are majoring in student housing and liking their long-term prospects
Higher education continues to be the path to advancement in the United States despite the ongoing debate about the value and cost of a college degree. College graduates will out-earn and are less likely to be unemployed than non- degree holders during their ensuing careers.
The Hybrid Office: A major shift is under way in U.S. workspaces
Walk into any of WeWork’s offices to find artisan coffee, shuffleboard and foosball tables, free food, a wine cellar, contemporary artwork and open communal space that resembles the studio floor of a cutting-edge furniture shop. The tenants are mostly Internet start-ups that pay for office space by the month and thrive from being surrounded by like-minded companies.
Learning from the Greeks: The 'march of folly' is written deeply into human DNA
Commercial property investors, like investors in stock and bond portfolios, love to borrow from the Greeks. This is not meant in the sense that the Greeks themselves loved to borrow from German banks a decade ago, only to wind up Europe’s test case for working out national fiscal policy when a common currency places monetary policy outside a country’s domain. I mean instead the easy adoption of the Greek alphabet to describe investment approaches.
Oh, Baby! Declining fertility rates could reduce global growth rates to a crawl.
We were all lucky to be born at the right time. Over the past 50 years, world GDP growth has been averaging 3.6 percent, driven by employment increases and productivity improvements in roughly equal proportions. An exhaustive and important study by the McKinsey Global Institute concludes that during the next 50 years, population growth will decline to 0.3 percent annually.