July 13, 2024


Phoenix REALTORS: Residential real estate inventory improved in May

Queen Creek, a hot spot for new homes, saw a 13% jump in year-to-date new listings and a reasonably steady 83 days on the market, among the highest turnover times among the major Valley cities. The median price grew to $645,000, up 10.7% in year-to-date data compared to 2023.

The number of new listings continued to climb in May in year-to-date comparisons, according to the latest data from Phoenix REALTORS. The first five months in 2024 were up more than 17% compared to the same period of 2023.

Homes have also sold faster so far this year when compared to 2023, and the average days on the market dropped from 74 to 64. The year-to-date median sale price increased 6.4% to $479,000, with home sales closing at around 98% of the asking price, a steady position over the past 12 months.

“Frankly speaking, expectations for this year were that 2024 would be better than 2023,” said Sheryl Bowden, president of Phoenix REALTORS. “Instead, we’ve faced a tight inventory for buyers who were looking. And while sales have not been what was expected so far this year, it’s heartening to see new listings increased in May, opening more ownership opportunities.”

New listings are approaching 37,000 homes on the market, comparing 2024 with the same months last year. Looking at year-over-year data, 7,121 homes were added as new listings this year compared with 6,215 in May 2023, an increase of 17.2%.

“Looking at the Valley as a whole, the data is encouraging,” Bowden said. “Individual cities are showing diverse results.”

In Phoenix, listings for the first five months of 2024 grew 18% over last year, but pending sales dropped almost 15%. The median sales price increased 12.6% to $490,000. The number of days on the market through the end of May fell from 68 to 54, down 20.6%.

Queen Creek, a hot spot for new homes, saw a 13% jump in year-to-date new listings and a reasonably steady 83 days on the market, among the highest turnover times among the major Valley cities. The median price grew to $645,000, up 10.7% in year-to-date data compared to 2023.

In the West Valley, Goodyear saw a nearly 23% increase in listings and a 10% year-to-date decline in pending sales. The median sales price grew modestly, just 2.4%, compared to year-to-date numbers. The number of days on the market dropped to 58 in May 2024 when looking back at 74 in May 2023. The 21.6% decline was one of the most significant improvements in the market.

“The Northwest Valley is seeing a lot of activity generated by the workers looking to live near the new semiconductor manufacturing and support facilities in Deer Valley,” Bowden said. “While Phoenix is seeing increased development in the area of TSMC and its supporting companies, Peoria and Surprise have inventory coming onto the market now.”

A 29% increase in new listings means Peoria had one of the most extensive listing jumps in year-to-date data for 2024 over 2023. While closed sales were down across the Valley in the first five months of 2024, they were down just 2.9% in Peoria. The median home price increased by 7% to $535,000.

“Interest rates continue to drop, encouraging homeowners to list properties for sale,” said Bowden. “While many buyers are just accepting rates, as they come down, more buyers should be able to qualify for mortgages.”

Learn more about Phoenix REALTORS here.

*Percent change is year over year for the indicated month

Queen Creek

  • New listings: 209 (+ 29.0%)
  • Pending sales: 95 (- 43.1%)
  • Closed sales: 154 (- 19.8%)
  • Days on Market Until Sale: 74 (- 11.9%)
  • Median Sales Price: $642,490 (+ 5.0%)
  • Average Sales Price: $775,258 (+ 16.3%)
  • Percent of List Price Received: 98.7% (+ 0.1%)
  • Inventory of Homes for Sale: 608 (+ 57.5%)
  • Months Supply of Inventory: 5.1 (+ 82.1%)

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B.C. real estate: CRA audits uncover $1.3 billion in unpaid taxes

The CRA identified $957 million in unpaid income taxes over eight years of audits targeting B.C. real estate, more than five times the amount in Ontario, which has three times B.C.'s population

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After taking a deeper look into B.C.’s real estate sector, Canada’s tax regulator has uncovered $1.3 billion in unpaid tax bills.

The Canada Revenue Agency has dramatically ramped up its auditing of real estate in recent years, scrutinizing both personal transactions and professional activities.

The agency has found “a disproportionate amount of non-compliance” in Canada’s largest metropolitan centres, with Metro Vancouver “identified as an area that requires our unique attention,” said Jason Charron, director general of the CRA’s compliance programs branch, recently. “We’re continuing to focus on the Lower Mainland, where we know there’s non-compliance.”

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Since launching a dedicated real estate task force in 2019, the CRA has mostly focused on Ontario and B.C., increasing the number of audits performed, sending out reassessment notices for billions in additional taxes the agency believes should be paid, and levying hundreds of million dollars in penalties.

In Ontario, the agency assessed $1.4 billion in unpaid taxes and penalties in the real estate sector between 2015 and 2023. B.C., which has about a third of Ontario’s population, had almost the same amount of tax non-compliance identified over the same period: $1.3 billion.

These real estate audits looked at a wide range of activities and entities: property-sellers illegitimately claiming the principal residence exemption, unreported capital gains, people who reside outside of Canada and invest in property here, share transfers and corporate structures designed to mask a property’s beneficial owners, and the activities of homebuilders and realtors.

Although the total value of unpaid taxes and penalties found in B.C. and Ontario was similar, the nature of non-compliance was markedly different in the two provinces. In Ontario, most non-compliance identified by the CRA in real estate was related to unpaid GST and HST on new homes or inappropriately claimed rebates on those taxes. In B.C., most of the non-compliance related to income tax.

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Data provided by the CRA shows that the agency identified $957 million in income tax-related non-compliance in B.C. real estate between 2015 and 2023, more than five times the amount found in the larger province of Ontario, at $178 million, over the same period.

The CRA says confidentiality laws prevent the release of information about the audits, but sent a written statement that said, in general, the income tax-related non-compliance included:

• Situations where a taxpayer acquired an expensive home without a clear reported source of income

• Profits from the quick flipping of homes that aren’t properly reported as taxable business income

• People, including those who aren’t residents of Canada, failing to report capital gains on sales of real estate

• Unreported income earned outside of Canada

• Non-compliance by realtors and developers.

The CRA declined to say how which categories the $957 million broke into  — for example, how much was related to property flippers or developers or non-residents — citing the need to protect taxpayer information and maintain “the integrity of our risk assessment system.”

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The number of income tax-related audits CRA conducted in B.C. real estate increased by almost 10 times between the 114 audit files opened in the 2015 fiscal year and the 1,089 opened last year.

There has been a corresponding boom in what the agency calls “audit assessments,” meaning the combined value of unpaid taxes still owing and penalties levied. Income tax-related audit assessments related to B.C. real estate averaged $6.4 million annually for the two fiscal years between 2015 and 2017, and shot up to an average of $155.1 million annually over the most recent two-year period, a 2,300 per cent increase.

Canada’s 2019 federal budget included $50 million over five years for the CRA to create a real estate task force, with specialized audit teams. Last month, the 2024 budget boosted that funding to $73 million for the next five years.

This work seems to be “paying for itself and then some,” said Tom Davidoff, an associate professor at the University of B.C.’s Sauder School of Business. The findings show there was “obviously” some kind of problem with tax compliance in this sector, he said, “but what we don’t know is how big of a problem it is now … If there was a problem and they solved it, that would be fantastic.”

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For years, many British Columbians were “ringing the bell” about people cheating on their taxes with real estate dealings, said Davidoff, director of UBC’s Centre for Urban Economics and Real Estate. This recent crackdown might not make housing in B.C. significantly more affordable, he said, “but it’s real money and it’s certainly useful to get it back where it belongs.”

Davidoff co-authored a 2022 paper published in The Canadian Tax Journal, which examined the top five per cent of Greater Vancouver homes had a median value of $3.7 million, while the median owner paid income taxes of just $15,800. This was the lowest correlation of property values to income tax contributions of any North American city, the authors wrote, concluding that “most luxury homes in Greater Vancouver appear to be purchased with wealth derived from sources other than earnings taxed in Canada.”

Considering these earlier findings, Davidoff said it makes sense that the CRA’s recent audits of B.C. real estate uncovered income tax “chicanery.”

Representatives of both the Greater Vancouver Realtors and the Canadian Home Builders Association of B.C. said they haven’t heard anything from their members about any recent increases or changes in CRA activity.

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Canadians for Tax Fairness, a non-profit tax policy advocacy group, said it welcomes the CRA “doing more to ensure that the real estate sector complies with tax laws, and we encourage the government to adequately fund the CRA so they can do their job.”

In an emailed statement, Canadians for Tax Fairness spokeswoman Erica Shiner said: “Tax avoidance continues to be a problem in many sectors, costing Canadians billions in revenue each year.”

[email protected]


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The PBOC (“Big Momma”) Releases Real Estate Policy Bazooka, Week In Review

Week in Review

  • Asian equities were sharply higher this week, led by Hong Kong, Indonesia, and Taiwan, though Mainland China markets were flat.
  • This week was a busy one for internet earnings as Tencent and JD.com beat estimates handily while Alibaba and Baidu reported mixed results.
  • Real estate was also in focus this week as news of a government effort to purchase unsold apartments to stabilize prices led to gains in developer stocks.
  • Inflation reports were further impacting markets this week as China reported higher-than-expected growth in consumer prices, a good sign for its economy, and the US’ softer-than-expected CPI print contributed to a risk-on atmosphere globally.

Key News

Asia ended the week higher as Mainland China and Hong Kong outperformed while South Korea was off.

It was an interesting session overnight. Hong Kong and Mainland China bounced around the room before slipping following April economic releases. This is despite Vice Premier He Lifeng’s comments on real estate policy support. Then, markets went absolutely vertical after the People’s Bank of China (PBOC), China’s central bank, announced three policies to support the real estate market.

The PBOC’s real estate three-pronged stimulus package involves: (1) providing RMB 300 billion ($41.5 billion) worth of loans to local governments to buy unsold apartments (really RMB 500 billion, assuming it represents 60% of the loan principal) at an interest rate of 1.75%, (2) lowering the minimum down payment for first-time home buyers’ mortgages to 15% and to 25% for second homes, (3) lowering the mortgage rate for first-time home buyers for loans of 5-years or less by 0.25% to 2.35% and to 2.85% for longer-term loans (2.78% and 3.33% for second-time home buyers).

This is the closest to the policy bazooka we’ve seen in addressing the multiple facets of real estate’s impact on China’s economy. Multiple agencies including the Ministry of Finance, the Ministry of Housing and Urban Development, and the Ministry of Natural Resources released statements around these top-down policy changes. The facets of economic impact are (1) depressed property developers creating a financial crisis (i.e. China’s Lehman moment though no one believes the government would allow a financial crisis to unfold right in front of them), (2) the lack of property development, which means fewer jobs, (3) fewer new apartments, which means less demand for home appliances, furnishings, etc., and (4) lower property prices, which have been weighing on household wealth and thereby domestic consumption (60% of China’s household wealth is tied to housing). This is a real step-up in policy. Yes, it is not a magic bullet that will suddenly solve the above issues, but it will help.

April new home prices declined -0.58% from March and existing home prices fell -0.94% from March.

Did you notice all the “buts” in Western media reporting on this topic? Foreign investor confidence in China, especially amongst US investors, is low, which explains the skepticism. Why bother when the Magnificent 7 goes up every day? That is true, until it doesn’t.

In China they call the PBOC “Big Momma” because you don’t mess with the PBOC. Investors in China and Asia will recognize that when the government pivots, you should too!

Real estate was the top-performing sector in Mainland China, where it gained +7.94%, and Hong Kong, where it gained +5.42%. Developer China Vanke gained +19.37% and Sunac gained +25.85%.

Knowing professional investors are underweight China, it is not surprising that trading desks were busy overnight. Think about all those emerging market funds that own Nvidia and Microsoft
! Hong Kong trading volume was lower than yesterday, though still 178% of the 1-year average led by Tencent, which gained +0.36%, Alibaba, which gained +7.53% after short selling firm Citron re-recommended the stock, Ping An Insurance, which gained +5.7%, Meituan, which fell -0.48%, and China Construction Bank, which fell -0.85%. It is interesting that Tencent’s market capitalization is $476 billion versus Alibaba’s $213 billion, though I suspect that Alibaba will receive some TLC from mainland investors once added to Southbound Stock Connect this fall.

The Hang Seng closed above 19,500 as Mainland China outperformed Hong Kong.

In last night’s economic release, industrial production was stronger-than-expected though retail sales surprisingly came in lower. Meanwhile, online retail sales were relatively strong. Property investment was unsurprisingly lower, along with property sales. Remember our trading buddy Dave’s saying – “if market no care, you no care”.

I recommend checking out Charlie Munger’s interview on the Acquired podcast. He had interesting comments on investing in China, including a discussion of Berkshire Hathaway’s
Berkshire Hathaway
BYD investment.

The Hang Seng and Hang Seng Tech indexes gained +0.91% and Wayne Gretzky +0.99%, respectively, on volume that decreased -12.49% from yesterday, which is 178% of the 1-year average. 333 stocks advanced while 150 declined. Main Board short turnover declined -17.92% from yesterday, which is 139% of the 1-year average, as 14% of turnover was short turnover (remember Hong Kong short turnover includes ETF short volume, which is driven by market makers’ hedging). All factors were positive as value and large caps outperformed. The top-performing sectors were Real Estate, which gained +5.41%, Consumer Discretionary, which gained +2.65%, and Financials, which gained +1.24%. Meanwhile, Health Care fell -0.82%, Technology fell -0.38%, and Consumer Staples fell -0.1%. The top-performing subsectors were real estate services, insurance, and retail. Meanwhile household/personal products, semiconductors, and pharmaceuticals were among the worst-performing. Southbound Stock Connect volumes were high, almost twice the 1-year average as Mainland investors bought a net $763 million worth of Hong Kong-listed stocks and ETFs, including Bank of China, which was a large net buy, Tencent, and China Construction Bank.

Shanghai, Shenzhen, and the STAR Board gained +1.01%, +1.18%, and +1.06%, respectively, on volume that increased +4.6% from yesterday, which is 104% of the 1-year average. 3,295 stocks advanced while 1,585 stocks declined. All factors were positive as value and large caps outperformed. The top-performing sectors were Real Estate, which gained +7.93%, Financials, which gained +1.48%, and Materials, which gained +1.26%. Meanwhile, Health Care was the only negative sector, falling -0.41%. The top-performing subsectors were real estate, insurance, and chemical fibers, while motorcycles, power generation equipment, and household appliances were among the worst-performing subsectors. Northbound Stock Connect volumes were average as foreign investors sold a net -$875 million worth of Mainland stocks. CNY was flat and the Asia Dollar Index was lower versus the US dollar. Treasury bonds rallied. Copper and steel were both up 1.17%, which I have never seen before.

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Last Night's Performance

Last Night’s Exchange Rates, Prices, & Yields

  • CNY per USD 7.22 versus 7.22 yesterday
  • CNY per EUR 7.85 versus 7.85 yesterday
  • Yield on 1-Day Government Bond 1.35% versus 1.36% yesterday
  • Yield on 10-Year Government Bond 2.31% versus 2.31% yesterday
  • Yield on 10-Year China Development Bank Bond 2.41% versus 2.42% yesterday
  • Copper Price +1.17%
  • Steel Price +1.17%

Altus Group Terminates Proposed Acquisition of Situs Group’s Commercial Real Estate Valuation Services Business

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Transaction unlikely to receive regulatory approval in a timely manner; Altus Group maintains focus on organic strategy to enhance consistency and transparency of valuations within the CRE industry

TORONTO, May 17, 2024 (GLOBE NEWSWIRE) — Altus Group Limited (“Altus Group” or the “Company”) (TSX: AIF), a leading provider of asset and fund intelligence for commercial real estate (“CRE”), announced today that it has delivered a termination notice with respect to its previously announced acquisition of Situs Group LLC’s (“Situs”) commercial real estate valuation and advisory services (“REVS”) business. Despite extensive engagement with the U.S. Federal Trade Commission (“FTC”) over the past six months, Altus Group believes that the transaction was unlikely to receive regulatory approval in a timely manner. In connection with the termination of this transaction, Altus Group will pay a US$3 million termination fee to Situs.

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“We are disappointed that we cannot move forward with a deal we believe would benefit all stakeholders and contribute towards our efforts to bring greater consistency and transparency of valuations across the CRE industry,” said Jim Hannon, Chief Executive Officer. “This opportunity would have led to improved compliance reporting of valuations and provided our clients and their investors with deeper insights on the performance of their CRE assets. Moving forward, Altus Group is strongly positioned to execute on our organic strategy to deliver best-in-class valuation intelligence to our clients.”

Altus Group’s Valuation Management Solutions (“VMS”) business boasts an impressive organic growth track record and Altus Group believes it is well positioned to take advantage of its large addressable market opportunity. While the REVS transaction offered exciting opportunities for all stakeholders, Altus Group can deliver on its organic strategy to expand client value through superior asset and fund-level intelligence and new innovative analytics offerings that help clients manage the performance and risk of their real estate assets. The Company’s 2024 technology roadmap includes new analytics capabilities launching this year, including enhancing Altus Group’s portfolio performance and valuation offers with powerful new analytics tools. The Company will continue investing in its VMS business to further enhance its financial profile.

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About Altus Group

Altus Group is a leading provider of asset and fund intelligence for commercial real estate. We deliver intelligence as a service to our global client base through a connected platform of industry-leading technology, advanced analytics, and advisory services. Trusted by the largest CRE leaders, our capabilities help commercial real estate investors, developers, proprietors, lenders, and advisors manage risks and improve performance returns throughout the asset and fund lifecycle. Altus Group is a global company headquartered in Toronto with approximately 3,000 employees across North America, EMEA and Asia Pacific. For more information about Altus (TSX: AIF) please visit www.altusgroup.com.

Forward-looking Information

Certain information in this Press Release may constitute “forward-looking information” within the meaning of applicable securities legislation. All information contained in this press release, other than statements of current and historical fact, is forward-looking information. Forward-looking information includes, but is not limited to, the discussion of the Company’s business, strategies, investment intent and expectations of future performance. Generally, forward-looking information can be identified by use of words such as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate”, “intend”, “plan”, “would”, “could”, “should”, “continue”, “goal”, “objective”, “remain” and other similar terminology.

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Forward-looking information is not, and cannot be, a guarantee of future results or events. Forward-looking information is based on, among other things, opinions, assumptions, estimates and analyses that, while considered reasonable by us at the date the forward-looking information is provided, inherently are subject to significant risks, uncertainties, contingencies and other factors that may not be known and may cause actual results, performance or achievements, industry results or events to be materially different from those expressed or implied by the forward-looking information. The material factors or assumptions that we identified and applied in drawing conclusions or making forecasts or projections set out in the forward-looking information include, but are not limited to: engagement and product pipeline opportunities in Analytics will result in associated definitive agreements; the size of the addressable market opportunity for VMS, continued adoption of cloud subscriptions by the Company’s customers; retention of material clients and bookings; sustaining the Company’s software and subscription renewals; successful execution of the Company’s business strategies; consistent and stable economic conditions or conditions in the financial markets including stable interest rates and credit availability for commercial real estate; consistent and stable legislation in the various countries in which we operate; consistent and stable foreign exchange conditions; no disruptive changes in the technology environment; and the absence of negative financial and other impacts resulting from strategic investments or acquisitions on short term results; successful integration of acquired businesses; and continued availability of qualified professionals.

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Inherent in the forward-looking information are known and unknown risks, uncertainties and other factors that could cause the Company’s actual results, performance or achievements, or industry results, to differ materially from any results, performance or achievements expressed or implied by such forward-looking information. Those risks include, but are not limited to those described in the Company’s annual publicly filed documents, including the Annual Information Form for the year ended December 31, 2023 (which are available on SEDAR+ at www.sedarplus.ca).

Investors should not place undue reliance on forward-looking information as a prediction of actual results. The forward-looking information reflects management’s current expectations and beliefs regarding future events and operating performance and is based on information currently available to management. Although The Company has attempted to identify important factors that could cause actual results to differ materially from the forward-looking information contained herein, there are other factors that could cause results not to be as anticipated, estimated or intended. The forward-looking information contained herein is current as of the date of this press release and, except as required under applicable law, we do not undertake to update or revise it to reflect new events or circumstances. Additionally, the Company undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Altus Group, the Company’s financial or operating results, or the Company’s securities.


Camilla Bartosiewicz
Chief Communications Officer, Altus Group
(416) 641-9773
[email protected]

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World-wide-web3, Blockchain Unleash World Real Estate Investment decision Prospective

For yrs, True World Assets (RWAs), these types of as authentic estate, have been cornerstones in world wide portfolios. Nevertheless, the extensive-achieving probable of these protected investments has been hindered by the shackles imposed by worldwide financial devices. Investors have had to wrestle with bureaucratic purple tape, regulatory inconsistencies, and the complexities of setting up asset validity and possession, presenting formidable obstructions to investing abroad.

Having said that, chopping-edge progress in Internet3 and blockchain systems are set to disrupt this conventional model. These innovative applications will permit trustless transactions that bypass age-outdated financial middlemen. Extra importantly, these digital transactions lend unshakeable evidence of possession and asset authenticity, addressing debilitating considerations about credibility.

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In essence, we’re conversing about the dawn of an economical, protected, and obtainable platform to explore global investment alternatives. Picture an financial investment ecosystem that facilitates global transactions effortlessly, simplifies economical complexity and beckons traders around the world. Serious estate, now an expense staple, is established to surge with newfound vigor.

World-wide-web3 and blockchain technological innovation retains the energy to completely transform actual estate transactions radically. By clever contracts, transactions will be automated, activated as soon as pre-recognized problems are satisfied, correctly reducing conventional middlemen’s dependence. Present intermediaries, like banking companies and attorneys, commonly guarantee agreement compliance. Nonetheless, Website3’s application guarantees this compliance is automatic, clear, and secured through engineering.

This morphed landscape slashes expenditures and transaction moments, but it also surfaces strategic gains. By minimizing conventional intermediaries, World wide web3 permits a broader demographic to dip their toes in serious estate expenditure – an chance previously confined by economical resources or deficiency of authorized and regulatory experience.

One of the trailblazers in this transformation is the MultiBank Team. Recognizing the prospective electricity of Web3, the firm has leveraged these nascent technologies in the authentic estate sector by means of its subsidiary, MultiBank.io. Adhering to world wide money polices though employing an unassailable method, MultiBank.io assures their transactions are correct, responsible, and irrefutable – supplying a crystal-obvious report of ownership.

Yet another sizeable pioneer building strides in actual estate digitalization is Blocksquare. Utilizing their one of a kind computer software-as-a-services (SaaS) system, Blocksquare turns tangible authentic estate belongings into digital tokens. This ingenuity guarantees operations continue being lawful and scalable, earning home financial investment administration purposely flexible and adaptable. Fueled by ‘tokenomics’ – building an economic procedure exactly where tokens maximize in worth, Blocksquare has properly gathered a $94.8 million tokenized asset portfolio nested in 107 buildings across 21 nations and is primed for the neo-brokerage market.

In this speedily modifying real estate investment decision sector, Blocksquare’s devotion to stability, efficiency, and transparency – facilitated by blockchain giants like Ethereum and Uniswap – establishes a sturdy, reliable electronic actual estate room.

The marriage of Web3 and tokenization will not only make investments a lot easier to acquire, but also totally dissolve the have to have for intermediaries to build rely on. By reworking serious estate into transferable digital tokens, the technological innovation invites an totally new era of investors formerly deterred by geographic hurdles, fiscal constraints, or complex governmental polices.

A shining pillar of this innovative motion is blockchain technological innovation. With its inherent stability and transparency, inconceivable stages of corruption and dishonesty can be thwarted, all the whilst accelerating transactions and optimistically slicing down on costs. As ultra-protected, token-centered ownership transfers start off to swap regular home transactions, the actual estate market place opens up like by no means in advance of, inviting fluidity, adaptability, and vibrancy.

Embracing Web3 and tokenization in the planet of actual estate is not just a mere improvement it is a seismic shift that expands obtain, upswings protection, and amplifies industry response.

This change basically redefines the contours of true estate financial investment, widening participation to a world wide viewers even though guarding the integrity of belongings by means of technological innovation. The consequence? An empowered pool of specific buyers and the potent opportunity to impact broader economic trends, fostering unprecedented marketplace enhancement and balance.

Ross McCredie On Rebranding Sutton Group And The Future Of Real Estate Transactions

It's not everyday that one of the largest real estate brokerages in the country gets sold, so it was big news when Sutton Group announced on December 7, 2023 that it had been acquired.

Who acquired Sutton Group made it even bigger news, as the brokerage had been bought by Ross McCredie, the Founder of Sotheby's International Realty Canada, real estate investment company Dundee 360, and wealth management platform RealWealth.

In between founding and growing those companies, McCredie also spent some time in the US, where he served as Chief Global Strategist for Pacific Union, leading the sale of the company to Compass to create the largest independent brokerage in the US.

After bringing the Sotheby's brand to Canada in 2004, McCredie served as President & CEO as the company expanded across 30 markets and grew to have a roster of over 900 realtors.

Just about two decades later, he's now buying into a brokerage that's already well-established, with over 200 offices across Canada and a roster of more than 6,000 agents.

In an interview with STOREYS in late-April, McCredie discusses how he grew Sotheby's, the rebranding of Sutton Group that was launched this week, and how he wants to change the real estate industry.

I wanted to start off by going back about 20 years, when you founded Sotheby’s International Realty Canada. What was the driving force there? Why was it something you wanted to do?

At the time, I was running Intrawest in Whistler — developing, sales, and marketing — and we were just seeing more and more international buyers, especially in the higher end of the market. I was always looking for different ways, as a developer and developer's rep, to figure out the best way to reach these foreign buyers and international markets.

Sotheby's Auction House had done a licensing agreement with Realogy, which had Century 21 and Coldwell Banker, so I reached out to them in 2004 and said "Hey, I'd love to figure out what you guys are gonna do in Canada because I'm really interested in the Sotheby's brand," and that's how that started.

I wasn't a real estate agent — I've actually never been a real estate agent — so we bought the rights to Canada and I asked my wife to go out and get a real estate license. I just saw a huge opportunity to get an iconic brand like Sotheby's, which has been around since 1744, and owning the rights to Canada seemed like a smart move at the time.

You acquire the Canadian rights and then you set out to grow the company. What was your approach? Looking back at it now, what do you think were some of the key moves? Anything you’d perhaps do differently in hindsight?

We started the first office and we had one agent, which was my wife, and we had no staff. Over the course of 12 years, we opened 40 offices across the country, we recruited all of the people ourselves, we owned and operated each of the offices, and we didn't franchise even though I could've franchised.

I was a bit of a control freak and I really felt like the power of the Sotheby's brand — we really needed to control that. To be honest, it was really hard. I didn't know much about the business. I reached out to a lot of people in the industry and not a lot of people really wanted to help me, so that was a bit interesting.

As we grew, every time we opened a new office I felt like we were making less mistakes. By the time we got to our fifteenth office, we kind of had it dialled. Then the brand really had traction because we won the bid to do the Hotel Georgia here in Vancouver, we launched Revelstoke Mountain Resort, we did the Four Seasons in Toronto, so we really developed, pretty quickly, a strong brand recognition across the country.

And we were really focused on top-level people, but more importantly people that were truly professional and wanted to be in the business and actually wanted to act like fiduciaries. I really felt that the industry had a mix of good, bad, and ugly, and there wasn't a brand out there that stood for what we call "the Navy SEALs of the business." We wanted the best and the brightest, hardest working, and most ethical people, and Sotheby's was a great brand to do that with.

You mentioned that people didn't really want to help you early on. Why do you think that was?

We used to get emails people all the time, forwarded from someone else, saying that "Ross is gonna be broke in six months" or "He doesn't know what he's doing."

We were doing things differently. Our model wasn't to get as many agents as possible. It was literally focused on [sales] volume and people. There's so many real estate agents in North America right now and about half of them last year didn't even do a transaction. It's an industry that sells itself with delusions of grandeur — come in, sell real estate, get rich — and the reality is it's just not true. The vast majority of people that go into the business don't survive three years. In fact, most of them don't survive one year.

So, when we opened our shop, we were just telling people the truth. Usually what I would say is "Go work at RE/MAX for a couple of years and if you make it, come back and talk to us." We stood our ground, whereas every other brokerage was literally just, every week, recruiting more agents.

Fast-forwarding a bit to just before buying Sutton Group, what did you see when you were looking at Sutton Group from the outside looking in?

I had just spent 10 years in California, mainly. I helped Compass reconstruct their business finance and then I saw an opportunity in California to get involved with Pacific Union, which was — at the time — the twelfth largest brokerage in America. I went in as a Partner and Chief Global Strategist and we bought seven more companies and built that business up in California, going from the twelfth to the fifth. At the same time, Compass was growing quite a bit, and was funded by Softbank, so I reached out to [Compass] and I basically got them to merge.

I saw the NAR lawsuit, which has been brewing for seven or eight years now, as a huge opportunity for a company to really move the needle around the conversation. The vast majority of the public doesn't understand why a real estate transaction takes so long and costs so much. In California, I started to become really focused on data. The US consumer has so much more data and when I came back to Canada, I couldn't believe how bad the information Canadians have [is]. Probably the worst of any G7 country in the world. We just don't have access to data and information that we should, so I was looking and had been pretty focused on real estate technology and how we need to reduce time and money, which adds value to the asset itself.

That's been in the background of everything I've done, probably, for the last 15 years. I've continued to seek out ways to do that and really focus on more of a wealth management model than a transactional model. And right now I believe everyone in the real estate industry is focused on the transaction. They're not focused on the homeowner or the asset itself.

What data is available to consumers in the US but not here?

For instance, if you pull up a property address for somewhere in Seattle, you can get almost all of the registry information, you can see who's owned the asset, you can see previous sales, how much it traded for, property tax information. Crazy enough, you can see information like the number of times that police officers have been called to that address. There's a lot of datapoints.

It's one thing to have a lot of data and information, but a lot of the time it's not verified, so it's really about getting verified data and information. In Canada, if you wanted to pull up a property address in Vancouver, it's pretty hard to get information on that asset. You either got to pay or you have to go to somebody in the industry who has access to BC OnLine.

So, my point there is that I think everybody keeps talking about affordability and housing, and the first thing we can probably do to help people is give them really good and accurate information at the time that they're looking to buy or potentially sell an asset. Also [important is] information related to the cost of the asset, because a lot of people get involved in real estate thinking that real estate is always a good investment, and it's not always true, right? So the true cost of ownership of an asset is incredibly important for people to make a decision.

This seems like an ambitious and grand goal. How do you plan on making it happen?

Well, I think it's by asking people for help, but a lot of people in the industry aren't necessarily interested in helping us achieve our goal, cause they're pretty short-sighted. That middle-aged stock broker that existed in 1993 who probably didn't add a lot of value to the transaction? They're gone. They're completely gone. E-Trade came in and people started to realize it doesn't need to take 10 to 15 days to trade an asset and I can get a lot of this information myself online, I can buy the asset myself, so the role of that stock broker had to change to much more of an advisory and fiduciary role.

With real estate, about 40% to 50% of transactions occur through death or divorce. A lot of people don't talk about this, but that's a highly emotional time, usually, and people don't make great decisions, and a lot of bad actors come into play and a lot of financial elder abuse happens. I've experienced it in my own family and I kept asking people, "Why hasn't anybody created a transparent platform that allows digital information to be provided to potential homeowners and fiduciaries so you can prevent financial elder abuse from happening?"

The other thing that happens a lot of times in this world is a lot of Canadians don't have a will, and if you don't have a will, it's a huge problem in the event of a death. I just saw this movie happen when I was at Sotheby's over and over again and I kept thinking, "There's gotta be a better solution here." So we built this first platform inside Sotheby's and it was called 1744 and the goal there was to create portfolios of data and information around an asset, cause we knew that if you did that, the asset itself actually became more valuable.

An example of that is collector cars. If you're buying a collector car and you've got a lot of detailed information on the asset, you'll get a premium of anywhere from 5% to 10% and if you don't have it, the asset gets discounted heavily. When you think about a real estate asset, the majority of information you're getting is from MLS or Realtor.ca, and a lot of the time that data may not be accurate. I just think that it's crazy that people are making one of the most important financial decisions you'll ever make based on data that can fit on a single sheet of paper. That, to me, is just nuts.

With Sotheby's, you founded the company. Now with Sutton Group, you're taking over a company that's already established. Was that part of the appeal for you, that it's a different kind of challenge?

Sutton revolutionized the business 41 years ago. They came in and they completely disrupted the entire industry with desk fees rather than [commission] splits. At the time, back in the early 80s when Block Brothers [Realty] was a big player, the splits between the agents [and brokerage] was 50/50. When Sutton came in, they were the first people to just charge you a desk fee and then the transaction fee, so you went from paying half of your commission to keeping 97% or 98% of your commission, so they grew very, very fast.

But in the past 10 to 15 years, the brand started getting a little tired, the ownership wasn't really investing in the business, and I saw an opportunity to acquire it. We're about to launch, in about two weeks, a new brand and brand identity, we're transitioning the business much more from a transactional business model to a wealth management model. With 200 offices and 6,000 agents, about $40B in transactions, it's a pretty good distribution for launching a digital platform that I think is going to change the way people manage and transact real estate.

The other thing that has been really beneficial to me is — as much as I didn't want to do franchises when I owned Sotheby's, now I see them truly as my partners. I don't have to manage those brokerages; they do. I don't need to know those markets, because they live in and breathe in those markets. They seem to be very excited about the ownership [change] and what we're bringing to bear.

The previous Sutton Group logo (left) and the new logo (right).The previous Sutton Group logo (left) and the new logo (right).(Sutton Group)

Is there anything else on your agenda for Sutton Group? Where do you wanna take the company?

Right now, it's to establish ourselves as a brand and truly transition it from transactional to wealth management. I'm not looking at any of the other brands or business models for real estate brokerages in Canada. I'm looking at financial service companies, wealth management companies, private banks.

Our goal this year is to reinvigorate the brand. We're in deep discussions with municipal, provincial, and federal people related to data and information and housing affordability, because everybody talks about affordability when they talk about housing and they never really talk about the role the government plays in terms of the costs. It's a huge part of an asset. People don't really understand, when you buy a house, how much of that dollar is paid out in taxes and permits. I think Canadians need to know that.

If you look at the cost of housing in the US and the cost of housing in Canada, it's dramatically different. Everybody knows that to be true, but nobody really understands why. And what I can tell you is that by providing a digital platform and giving people information, they're gonna start asking their municipal leaders, provincial leaders, and federal leaders why they're paying so much money either to manage or transact real estate.

We're also growing the brand. I've hired a new President and Chief Operating Officer. He's phenomenal. I've hired a new Chief Marketing Officer who's incredible. We're building a new website, we're launching a new app, and Cornerstone — it will be Sutton Group powered by Cornerstone — is the technology partner [for the digital platform.] I'm equally as excited as I was in 2004 when I bought Sotheby's.

Having spent time in the US and now being back in Canada, what do make of the NAR commissions settlement and how it may or may not impact Canada?

I feel like the industry is finally having to change. [As a result of] COVID, a lot of people had to figure out how to do things digitally. We had appraisals being done for properties that nobody actually went into. We had transactions of real estate where buyers and sellers never met. That revolution forced the industry to start behaving differently and in order to do that, a higher degree of trust needed to be provided when it came to data and information.

The lawsuit in the US, and [the one] ongoing in Canada, I think is a really good thing. Consumers need to be asking the industry "Isn't there a better way to manage and transact real estate?" And the answer is "Yes."

We're not in that space. Our agents, it's up to them to negotiate the fee they charge with their homeowners and we had the same mindset when I owned Sotheby's. I really never understood why the industry would set a standard where if you're a real estate agent and you've been in the business for two weeks, you're gonna charge me the same as someone who's been in the business for 20 years? The industry was protecting the business model and commission structure that made no sense.

Things like title insurance. People are starting to ask the question, "Do I even need title insurance?" And the answer is probably "No." That's a cost to the transaction. Appraisals in Canada cost $600 and take 10 days, and they shouldn't. It should be $100 and take 24 hours. All these little things — inspections, appraisals, title insurance, the taxes, commissions — go into the cost of an asset and also the timing of why it takes so long.

The Land Title Office is the one that holds all the information that allows that transaction to occur. With a stock or a bond, you've got six different intermediaries and they figured that out so you and I could've been buying and selling stocks on this phone call right now. And that's a much more complicated transaction than a real estate transaction. I'm 100% focused on figuring out how to do this better. That's what's got me excited.

Real estate 2024: Emerging from the storm?

As interest rates peak and a clearer picture forms on valuation and future financial performance, the emerging green shoots signal a readiness among investors to get back to business.

By most measures, 2023 was a year to forget for real estate investors and dealmakers.

To get a read of what will drive and affect sector activity in the year ahead, White & Case has conducted its second annual survey of industry participants, with more than 260 senior decision-makers sharing their thoughts. Our findings show that after a volatile 24 months, the industry is looking ahead with more optimism as interest rates peak and a clearer picture forms on valuation and future financial performance.

Even though the outlook for 2024 is more positive, investors remain cautious. Rates are still high and geopolitical risk continues to loom large. On balance, however, the industry does appear to be in a more stable position than it was 12 months ago. The next year may not break any records for real estate deal activity and fundraising, but green shoots are emerging, and investors are ready to get back to business after a quiet 2023.

Section 1: Market overview and outlook

Cautious optimism: Real estate ready for recovery

Key Findings

  • There is growing optimism around the short-term and long-term outlook for the global real estate sector
  • More than two-thirds (68 percent) of respondents are more optimistic for the short term, with 89 percent optimistic for the long term. In the 2023 survey, only 48 percent and 75 percent were optimistic for the short term and long term respectively
  • Although survey respondents are more upbeat than a year ago, they remain cautious, with more than a third (37 percent) anticipating that CVAs, restructuring plans or other insolvency events will have a material impact on businesses during the next year—the same level as 2023
  • Geopolitics and regional conflicts are seen as the primary macro-economic risk facing the sector (31  percent), followed by interest rates (26  percent) and inflation (15  percent)

According to White & Case's M&A Explorer, global real estate deal value fell to the lowest levels since 2007, as year-on-year deal value dropped 52  percent from US$293.97 billion in 2022 to US$139.68 billion in 2023. Real estate fundraising activity, meanwhile, fell to the lowest levels seen since 2012, falling from US$224.63 billion in 2022 to US$138.83 billion in 2023, according to PERE.

The drops in deal value and fundraising reflect the negative impact of high inflation and rising interest rates on real estate markets in the US and Europe, and a liquidity squeeze in the key Chinese real estate sector in Asia-Pacific.

Better days ahead

For all the challenges that real estate markets have faced during the past 12 months, however, this year's survey findings suggest that the market may be starting to turn the corner, with respondents more optimistic about real estate prospects than a year ago.

More than two-thirds (68  percent) of respondents are more optimistic for the short-term, with 89  percent optimistic for the long term. In the 2023 survey, by contrast, only 48  percent and 75  percent were optimistic on the short-term and long-term outlook respectively.

A more stable picture for interest rates is driving renewed optimism. There is growing consensus that interest rates in the US, UK and Europe have peaked, and as long as rates stabilize and a lid is kept on inflation, real estate investment activity should start to rebound, with JLL anticipating that stable rates will narrow the gap between buyers and sellers on valuation, facilitating a smoother runway for deals.

"The market is in the process of resetting. If rates go down or stay flat, it will be a positive. If they rise again, it will be a negative," one survey respondent said.

The long-term fundamentals supporting real estate sub-sectors, such as logistics, are also giving real estate professionals.

"The focus on interest rates and inflation has meant that demand has been overlooked," the head of a European real estate developer and manager says. "If you look at logistics real estate, for example, the long-term structural tailwinds of e-commerce, nearshoring and supply chain resilience will continue to support favorable rent and vacancies dynamics, and opportunity to drive income growth."

Proceeding with caution

The survey findings also show, however, that respondents are not getting carried away. Opportunistic strategies, for example, rank as the most attractive for fundraising in 2024 (36 percent) with core value-add (22  percent) and development strategies (15 percent) some distance behind.

"Even if interest rates track downwards, real estate will still have to navigate a liquidity mismatch in the years ahead, and that will present opportunity for well-capitalized credit and opportunistic real estate dealmakers," the head of European real estate at a global private markets manager said in a post-survey interview.

More than a third (37 percent) also anticipate that CVAs, restructuring plans or other insolvency events will have a material impact on businesses during the coming year—the same level as 2023.

High rates and looming debt maturities are also set to keep pipelines of real estate non-performing loans at elevated levels, with almost three-quarters of respondents (72 percent) expecting an uptick in portfolios of NPLs secured by real estate to come to market in 2024. This is only a little lower than last year (79 percent).

Geopolitical risk is firmly on the radar too, with ongoing conflict in the Ukraine and Middle East, and the risk of proliferation, remaining major concerns. It comes as no surprise, then, that geopolitics and regional conflicts are seen as the primary macro-economic risk now facing the sector (31 percent) —ahead of interest rates (26 percent) and inflation (15 percent), which were identified as the primary macro-economic risks in the 2023 survey.

With the US, UK and India among the major global economies going to the polls in 2024, political instability ranks as the biggest socio-political risk for real estate (39 percent), some way ahead of political sanctions and changing social habits (both 14 percent).

Some investors, however, do believe that geopolitical risk has been oversold in markets like China, where sell-offs and falling valuations have overlooked underlying commercial drivers that continue to offer investors value.

Overall, the findings indicate that respondents remain sensitive to downside risk and shielding portfolios from macro and geopolitical uncertainty. The good news is that even though the macro backdrop still poses challenges, market conditions have improved when compared to last year.

Section 2: Sectors and fund strategies

Changing dynamics: Opportunity emerges as usage patterns shift

Key Findings

  • More than a third of respondents (36 percent) see opportunistic fund strategies as the most attractive going into 2024, with special situations up at 8 percent from 0 percent last year
  • Digital infrastructure (17  percent); living/residential (17 percent) and healthcare/life sciences (14 percent) are recognized as the real estate sectors most likely to outperform in 2024—in line with 2023 findings
  • Offices (41 percent); retail (22 percent) and hospitality/leisure (14 percent) have been selected as the sectors that will see the lowest investment demand during the next 12 months

The dislocation in real estate valuations during the past 12 months, coupled with tightening liquidity, a debt maturity wall and distress in Chinese real estate have put opportunistic fund strategies at the top of respondent rankings for 2024.

More than a third of respondents (36 percent) chose opportunistic fund strategies as the most attractive going into 2024, with the adjacent special situations category also gaining momentum, up at 8 percent from 0 percent last year.

The findings indicate that disruption caused by the rising interest rates as well as inflation to present an expanding pool of attractive investment opportunities in the months ahead, as a recalibration of real estate valuation and performance expectations washes through the industry.

A combination of factors are likely to be driven by this sentiment. With liquidity and financing costs still among the highest-ranked risks to real estate in 2024, despite interest rates flattening out, fund strategies that can unlock capital for real estate borrowers are taking center stage.

The largest real estate fund that closed in 2023, for example, was Blackstone Real Estate Partners X, which secured US$30.4 billion of capital commitments and will target opportunistic deals in rental, housing, hospitality and data centers.

Other strategies that fall under the opportunistic umbrella include real estate debt funds and real estate secondaries.

With PIMCO estimating that more than US$1.5 trillion of US real estate debt will mature by 2025, with US$650 billion and US$177 billion falling due in the same year in Europe and the Asia-Pacific respectively, real estate debt funds will be ideally placed to inject liquidity into companies with limited headroom in their capital structures.

Other strategies offering real estate companies and investors with liquidity have also gathered momentum, with Ares Management and Blackstone both closing real estate secondaries funds in December 2023, pushing real estate secondaries' share of overall real estate fundraising to 6 percent in 2023 from 0 percent in 2022, according to PERE figures.

"With the focus on inflation and interest rates, the liquidity challenges in the banking sector have been underappreciated," a real estate investment head said in a post-survey interview. "Remember that 2023 saw the second, third and fourth-biggest bank failures in history, and that by 2028, US$28 trillion of real estate debt will mature. Banks are also under regulatory pressure to down-weight real estate debt exposure, which has more than doubled from 2016/2017 levels. Refinancing is going to become more and more challenging.

A Europe-based logistics expert adds: "Debt maturities will drive significant market bifurcation in real estate. A strong player in a resilient sub-sector should not face any difficulties when refinancing. Lender support is still there for quality credits. Weak, highly leveraged players in underperforming subsectors will find it very difficult as maturities come into view."

Opportunistic funds could also take advantage of the secular shifts in real estate usage, where there have been big shifts in the aftermath of pandemic lockdowns.

Offices underperform, but digital infrastructure red hot

Lockdowns have had a significant impact on offices in particular, with employees continuing to work remotely even after restrictions were lifted, reducing demand for office space.

The survey findings rank offices as the sector that will see the lowest demand in 2024, with 41 percent of respondents bearish on offices—up from 28 percent in 2023. Retail ranked as the next sector to see the lowest investment demand (22 percent), with the long-term shift to online shopping continuing to eat into retail rents and valuations. Hospitality and leisure ranked third at 14 percent.

Respondents do, however, see potential for valuation outperformance in the digital infrastructure (17 percent), living/residential (17 percent) and healthcare/life sciences areas. In our previous survey, these sectors also ranked as the three most attractive areas for investment.

Demand for digital infrastructure continues to surge, as businesses and consumers require ever-larger amounts of data for work, shopping and entertainment. The rapid growth in Generative AI and data analytics is forecast to increase data demand even further (research consultancy Tirias Research estimates that Generative AI growth could see digital workloads increase by up to 50x by 2028).

The solid, long-term growth drivers underlying digital infrastructure and data centers have investors and dealmakers maintaining investment levels into the space despite wider market dislocation, with Mergermarket figures showing data center M&A holding steady in 2023 even as overall M&A markets saw double-digit declines in activity levels.

The residential/living sector has also held up well, despite rising interest rates and mortgage costs. Urbanization and the rising costs of home ownership are long-term drivers that will support residential asset valuations, according to Pimco, while in the student housing space, record numbers of students enrolled in tertiary education are pushing up demand for purpose-built student accommodations, according to the CBRE.

The optimism reflected in the survey around healthcare/life sciences is underpinned by strong underlying growth in life sciences and biotech, and an expansion in lab availability through the course of 2024, according to JLL research.

Demand for lab space is particularly strong in so-called "Tier 1" locations, where new commercial lab space is expanding and rental rates are showing resilient growth.

Opportunities, however, are emerging for investors with the risk appetite to take contrarian positions. European office space is one area that some investors see as oversold. European office vacancy rates are still tight, and more restrictive planning rules in Europe have prevented office overbuild.

Retail and shopping centers that have weathered the past ten years and are still performing, meanwhile, are likely to be robust assets that present attractive pricing dynamics.

Section 3: Operations, ESG and technology

Balancing act: Liquidity, tech-enablement and ESG place myriad demands on operators

Key Findings

  • Availability and cost of financing (23 percent) ranks as the main operational risk for 2024, followed by construction costs (19 percent) and liquidity (17 percent)
  • Political instability is the main socio-political risk (39 percent), with fall-out from political sanctions (14 percent) also prominent  
  • As the focus on political instability intensifies, environmental issues have ranked lower than in the previous survey (13 percent in 2024 vs 22 percent in 2023), but there has been progress when it comes to meeting investor-driven ESG requirements
  • AI is emerging as an increasingly important technology for real estate operations, rising from 11 percent in 2023 to 26 percent in 2024

The survey findings highlight the multiple demands facing real estate operators, who are having to juggle ongoing liquidity and financing challenges with ESG implementation, digitalization programs and socio-political uncertainty.

Respondents cited availability and cost of financing (23 percent) ranks as the main operational risk facing the industry in 2024, while construction costs (19 percent) and liquidity (17 percent) are seen as the other operational pressure points.

The focus on financing and liquidity underscores that even if interest rates flatten out in 2024, financing costs will remain materially above the ultra-low rates available to borrowers in 2021.

This is a significant operational challenge for real estate groups, as there is an estimated US$2 trillion of commercial real estate debt maturing by 2027 that will have to be refinanced at significantly higher costs, according to Capital Economics.

The lingering effects of inflation, meanwhile, remain on the minds of operators, with construction costs and resource availability the second-most pressing operational risk, chosen by 19 percent of respondents. This is, however, lower than the 30 prrcent figure recorded in last year's survey, suggesting that inflationary pressures and supply chains are stabilizing.

On the socio-political front, political instability ranks as the main socio-political risk, chosen by 39 percent of respondents. This is way ahead of the sanction regimes—the next biggest socio-political risk at 14 percent—and ahead of the 30 percent figure recorded in last year's survey.

With the US, UK and India among the major global economies going to the polls in 2024, real estate stakeholders are particularly attuned to political risk and changes in administrations and policy.

Interestingly, environmental issues have slipped down the risk agenda, from 22 percent of respondents last year to 13 percent in 2024, even though there appears to be more progress on meeting investor-driven ESG requirements. Last year, 70 percent of respondents said market players were still finding their way in this area, with 15 percent saying the industry was poorly prepared, and 15 percent saying it was well positioned.

This year, by contrast, a quarter of respondents said market players were well positioned to meet investor-driven ESG requirements, with 63 percent saying market players were still finding their way, and only 12 percent saying the market was not well prepared.

The immediate risks of liquidity shortages and political uncertainty may have pushed environmental risk down the agenda for the short term, but the fact that respondents point to ongoing progress on ESG compliance does suggest that ESG is now firmly embedded into real estate operations.

In a similar vein, digital integration has also become an integral part of real estate operations. Some 93 percent of respondents said technology and digital integration had become important or very important in future-proofing real estate operations, up from 86 percent last year.

There has, however, been a shift in what technologies real estate business are looking to implement.

The findings have registered a big uptick in the focus on artificial intelligence tools. In 2023, only 11 percent chose AI as the main technology that companies were considering for implementation into operations. This has more than doubled to 26 percent in 2024, with only data analytics (29 percent) chosen by more respondents.

The practical implementation of AI tools in real estate may still be nascent, but the potential to drive value for real estate is clear. According to McKinsey, Generative AI could unlock between US$110 billion and US$180 billion for the real estate industry. The potential applications of AI in real estate are vast, ranging from processing leasing documentation, managing tenant inquiries and handling maintenance requests to facilitating virtual site tours or developing pipelines for real estate investors.

Pragmatic optimism

The disruptive impact of AI on the real estate industry will be one of the myriad complexities that real estate professionals have to continue navigating in 2024, with geopolitical risk, refinancing walls and ESG transition just some of the other major themes that will test investors and operators in the months ahead.

For all these ongoing challenges, however, there is a sense of cautious optimism building across real estate as interest rates peak, consensus forms on valuations and visibility on future performance improves.

Real estate professionals are not getting carried away, but after a period of stasis, M&A and fundraising are finally back on the agenda.

White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.

This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.

© 2024 White & Case LLP

Retirees: Is it time to downsize, even in this real estate marketplace?

Your property is your sanctuary, but it is also just one of your most important spending plan objects. And after you retire, it may well truly feel like a lot more dwelling than you have to have. But in this housing market place, when a lesser house with upgraded features may well be about as pricey as the just one you’re providing, is it continue to wise to downsize?

In some instances, downsizing is acceptable, but not always money-preserving. You may possibly be equipped to offer your property and purchase one thing more cost-effective, but it may possibly also make sense to downsize to transfer nearer to family or have much less residence to cleanse.

It is critical to be apparent on what you want. “Goals are so critical,” says Juan HernandezAriano, a licensed economic planner in Houston. “There are numerous pathways people can acquire.”

Here are some predicaments that might match up with a “For Sale” indicator.

You are IN A Hard cash Stream BIND

In retirement, you could possibly discover that increasing selling prices blended with a fastened income make you come to feel a very little squeezed.

HernandezAriano notes that his consumers in southeast Texas are bothered by high property insurance policy premiums thanks to intense climate gatherings, furthermore higher assets taxes. “A ton of insurance coverage companies are dropping protection on the southeast facet of Texas,” he claims.

If downsizing is a dilemma of cash, think about all your housing charges. Weigh the mortgage loan, assets taxes and insurance policy, plus standard bills like electric power and water providers for your present and future homes.

1 client in Houston did the math and moved 90 minutes absent, where by they acquired a cheaper dwelling and dropped their homeowners coverage by 60%. “Property taxes also went down since they weren’t in a hugely competitive school district,” HernandezAriano says. “They continue to invested extra on fuel and drinking water and had to pay out for relocation charges, but total, they saved regular.”

You’re IN A Pricey Location

If you reside in an high priced city, you have a superior probability of advertising your house and obtaining a little something cheaper. “When you are in a reduced-value place, it is heading to be difficult to come across anything even (more) reduce value,” says David Demming, a CFP in Aurora, Ohio.

Just do some searching prior to you leap. Inventory is reduced in several locations, and opposition is steep for a more compact residence with updates.

To save cash in general, the price of the home you are purchasing need to be at the very least 20% significantly less than the home that you are advertising, states Diane Pearson, a CFP in Wexford, Pennsylvania.

YOU Simply cannot Reside THERE Securely Any more

Your health and fitness may well involve you to obtain a new home with less stairs, a initial-ground major bedroom or an accessible bathroom.

Michael Maye, a CFP in Gillette, New Jersey, notes that his clients who’ve witnessed dad and mom go as a result of extended-time period care or health concerns are more very likely to consider future mobility when preparing their retirement. “Recently, I proactively labored with a pair and they understood that they didn’t want to age in spot, because they have a more substantial property,” he claims.

They preferred to get into a continuing treatment retirement community, exactly where they could get benefit of graduated degrees of treatment as they desired it. “They could keep in their home, but they do not strategy to,” Maye states.

YOU WANT TO BE Closer TO Family members

When being closer to kids or growing old parents is a very good cause to downsize, really do not rely on this staying the much less expensive possibility, particularly if you are shifting into a hotter sector.

Contemplate one particular of Demming’s clients, who moved from a person aspect of Ohio to yet another part of the condition. “It price her $150,000 much more to shift there, to get a dwelling that was acceptable to her,” Demming stated.

Even with the bigger price, Demming states, it was really worth it to be nearer to her youngsters and grandchildren — and her new metropolis is booming. “There is no seeking back again,” Demming says. “Her new home has appreciated rather a little bit considering that going.”

You’re Organized TO Create A NEW Assist Community

If downsizing indicates a new city, continue to keep in intellect that you may have to rebuild your group. Even if you’re going to be around household, you shouldn’t rely on them to be your activities hub. “Are you a social human being who’s likely to be able to get out and about and make your very own way?” Maye suggests.

You are going to want to make new good friends, obtain new health care pros, locate a new gym. “Those are the trade-offs,” Maye says. “None of them are offer breakers, but I feel people today must truly think about all these other issues.”


This article was supplied to The Linked Push by the individual finance site NerdWallet. Kate Ashford is a author at NerdWallet. Email: [email protected]. Twitter: @kateashford.

Linked Links:

NerdWallet: How to provide your household https://bit.ly/nerdwallet-how-to-market-your-home

Kate Ashford Of Nerdwallet, The Related Press

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Designs That Look Bad in Real Life, According to Interior Designers

Pallet furniture may not be very comfortable.

Two pallet sofas with brown cushions beside white table

Pallet furniture can also sometimes have splinters.


Pallet furniture — minimalist pieces mainly made of wood — may look creative and relaxing, but Andra DelMonico, lead interior designer at Trendey, said to approach the trend with caution.

"On social media and in pictures, pallet-wood furniture looks creative and comfortable with its large seating areas and plush pillows thrown on top," DelMonico said. "However, in real life, these sofas and chairs aren't that comfortable."

These pieces don't include springs like traditional furniture and lack support since many people buy pillows instead of seat cushions with a firm interior. 



Don't skimp and paint your kitchen appliances.

Kitchen with plant, white cabinets, and small blue refrigerator

If you can afford it, you're better off buying a colored appliance.

Olena Gaidarzhy/Shutterstock

Instead of painting refrigerators and turning them into creative canvases, DelMonico recommended splurging on a colored appliance.

"If you want a colored, large kitchen appliance, just commit and buy one. Don't try to paint your current appliances," she told BI. 

You'd need to prepare and prime the surface before adding any paint, and even then, a brush or sponge can leave a streaky finish. Plus, the coat likely won't hold up against scrubbing and cleaning in the long term.

Dark spaces can have noticeable flaws.

Bathroom with matte black walls

Dark bathrooms are a popular design choice.

Suleyman Ozkan/Getty Images

Dark, moody bathrooms are trendy, but photos don't always reveal how difficult the upkeep can be, according to Hillary Stamm at HMS Interiors.

If you are going to opt for the trend, be mindful about where you include it.

"In children's bathrooms or any spaces that get heavy traffic, this can be a poor choice, as any nick or dent will show quickly," she explained. "A month after installation, we have a dented and banged-up, albeit new bathroom." 

Accent walls are not always a good fit.

living room with yellow accent wall

Accent walls can make a room feel unfinished.


Julie Brayton, lead designer of Brayton Interiors, told BI that no matter how trendy and fun an accent wall might seem, it may not be a good fit from a design perspective.

"While these can photograph nicely, oftentimes it really throws off the balance in a room when you're actually in it and can make the room feel unfinished and unconsidered," Brayton said.

You can still make a statement with other forms of art or unique decor.

Shabby-chic sofas require a lot of maintenance.

Living room with white shabby chic sofa, coffee table, and TV

The cushions often slide off of shabby-chic furniture.

Enrika Samulionyte/Shutterstock

Pieces that look lived-in, shabby-chic sofas can be challenging to take care of, according to Morgan Blinn, interior designer at Rumor Designs.

"Shabby chic sofas are all over TikTok right now. The worn-in look is great in photos, as they are staged for the moment, but in real life, this style sofa takes a lot of upkeep for something that is marketed to be 'effortlessly' chic," Blinn explained.

The cushions on these pieces often slip, so you'll likely need to consistently readjust them —  though some higher-end products include straps to keep them in place.

Mismatched dining chairs tend to look more confusing than chic.

Open concept dining room and living room and kitchen with mismatched dining chairs

Mismatched chairs can make a space look messy.

Klaus Vedfelt/Getty Images

It might seem like mismatched dining chairs add variety and personality to a room, but interior designer Leah Atkins of Leah Atkins Design said this choice could look unintentional. 

"Mismatched dining chairs are a cool idea in theory and can look fun and eclectic in pictures, but they tend to look messy in real life," Atkins said. "It just looks like you are living in a shared college living space where everyone brought their own chair." 

Instead, opt for a matching set that fits the aesthetic of your space.

Painted kitchen cabinets usually look "too good to be true" in pictures.

Painted blue cabinets in a kitchen with white counter and backsplash

The paint may not look great over time.

David Papazian/Shutterstock

Many folks paint kitchen cabinets when they need an upgrade, but Devin Shaffer, lead interior designer at Decorilla, advised thinking twice about this DIY project.

He said usually the trend looks "too good to be true." 

"Oftentimes, photos of people's DIY projects are taken right after they finish their project," Shaffer explained. "In the case of painted cabinets, they'll quickly start to peel, the dry paint will show bumps and drip lines, and will eventually lose their shine as grime and dirt start to collect on the improperly finished surface."

Reupholstering furniture might not be worth the hassle.

Blue and white upholstered chair in front of gray wall

It may be worth hiring someone to reupholster it for you.

LOOK Photography/Getty Images

Shaffer told BI that reupholstering furniture rarely ends up being as easy and seamless as it looks on social media.

"Shoving cushion filling into a vintage seating piece will turn into a mess, and I can guarantee you that about five minutes into the project, you'll get frustrated and end up discarding the entire piece and fabric," Shaffer said.

Even though he said reupholstered pieces "definitely look fabulous," he instead recommended buying a new sofa or chair, or hiring a professional to do the job, if your budget allows.

Top Real Estate Agents of 2024

The pros selected for Variety’s Real Estate Elite report handle only the very high-end listings on the coasts and have managed to close record-setting deals despite high interest rates and Los Angeles’ “mansion” tax. “This is a time of opportunity for buyers. ‘Marry the house. Date the rate’…. you can always refinance later,” says Cindy Ambuehl at Christie’s Intl. Real Estate.

Trends for 2024 include hotel-like amenities. “High-end buyers want the full-service experience, so the more a property features all the amenities they’ve come to expect at the finest hotels, the more likely they are to pay above market,” says Zach Goldsmith of the Agency. 

Brace for pain in commercial real estate as debt comes due

Market fundamentals of office properties are deteriorating fast

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The rapid rise in interest rates has been hard on commercial real estate, especially the office sector, already staggering under the blows of the pandemic.

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Now a new threat looms as hundreds of billions of dollars in loans reaches maturity over the next few years, says a new report from TD Economics.

Make no mistake, this is not just the United States’ problem. Troubles in the U.S. CRE market that hit lenders in recent weeks such as New York Community Bancorp have spread to Japan and Europe, raising fears about broader contagion.

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Shares in German lender Deutsche Pfandbriefbank AG fell to a record low today after it was downgraded by S&P Global Ratings over its high exposure to the U.S. commercial property market. The German company has described the current turmoil as the “greatest real estate crisis since the financial crisis.”

An estimated US$540 billion in commercial real estate loans in the United States will come due this year and another US$535 billion next, says the report by Toronto Dominion economist Admir Kolaj.

Meanwhile, market fundamentals are deteriorating fast, with offices the most vulnerable sector.

Office properties have been struggling since the pandemic ignited the work-from-home movement. Even though employers are increasingly pushing to get their workers back to the office, remote work days still remain high at 30 per cent, far above the 5 to 7 per cent before the pandemic, said Kolaj.

Companies might not get rid of their offices entirely, but they are downsizing when leases expire. CoStar estimates that office tenants gave back about 65 million square feet of space last year.

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Office vacancy rates are rising, rents are stalled and the expected economic slowdown and drop in hiring in the United States will only deepen the slump, said Kolaj.

“It appears that the deck is stacked against office fundamentals for the time being, with the office vacancy rate likely to continue trending higher this year, and rent growth to dip into negative territory once again, something that is sure to weigh on net operating income,” he said.

Commercial-property prices are down 21 per cent from a peak reached in early 2022, Bloomberg reports, with office prices falling 35 per cent.

The TD report cites research that says 44 per cent of office loans appear to be in negative equity, where the current property value is less than the loan balance.

With property values down and interest rates higher, many owners whose loans mature will need to come up with more capital to maintain an adequate loan-to-value ratio, said Kolaj.  But finding that money won’t be easy or cheap.

The alternative is selling in a soft market or handing the keys to the lender, he said.

“Together with property values that have retreated from their pandemic highs, and a large amount of loans coming up for maturity in a higher interest rates environment, these elements suggests that we should brace for more distress in the CRE space ahead,” Kolaj said.

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Property owners will get some relief when the Federal Reserve begins to cut interest rates, likely by mid-year.

“Still, it remains to be seen to what extent this would limit the fallout, or if the pullback in rates will be ‘too little, too late’,” the report said.

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magnificant seven
Deutsche Bank Research

They call them the Magnificent Seven. This handful of stocks — Alphabet Inc, Amazon.com Inc, Apple Inc, Meta Platforms Inc, Microsoft Corp, Nvidia Corp, and Tesla Inc — dominate the U.S. market to a degree that hasn’t been seen since the 1930s. Together their market cap is bigger than the value of any stock market in the world, except the United States, says Deutsche Bank Research. Microsoft and Apple on their own have market caps on par with Saudi Arabia and the United Kingdom.

The big question is how long will their reign last? Their concentration rivals the “Nifty Fifty” in the late 1960s when investors drove the valuations of blue-chip stocks higher and higher until the bear market of 1973 ended that party.

Deutsche’s second chart shows us what happened to market high flyers over the past 60 years.

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Deutsche Bank Research

  • Natural Resources Minister Jonathan Wilkinson will make a critical minerals funding announcement at the Canada-UK Industrial Decarbonization Forum in London, England
  • Artificial Intelligence experts will speak on “Charting Canada’s AI Future: How to Build a Resilient Framework for Investment, Adoption, and Economic Prosperity” at the Empire Club of Canada in Toronto
  • Today’s Data: Canadian housing starts for January, factory sales for December, U.S. retail sales
  • Earnings: Canadian Tire Corp Ltd, Cenovus Energy Inc, Agnico-Eagle Mines Ltd, Iamgold Corp, MTY Food Group

Get all of today’s top breaking stories as they happen with the Financial Post’s live news blog, highlighting the business headlines you need to know at a glance.

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“When all the experts and forecasts agree — something else is going to happen.” Famed investor Bob Farrell’s Rule No. 9 has never been more relevant given the unprecedented optimism priced in across many assets, particularly U.S. equities and high-yield credit. Market strategist Bhawana Chhabra digs through the data to find out which of them are priced to move. Read more in FP Investing

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you wondering how to make ends meet? Drop us a line at [email protected] with your contact info and the general gist of your problem and we’ll try to find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course). If you have a simpler question, the crack team at FP Answers led by Julie Cazzin or one of our columnists can give it a shot.

McLister on Mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Read them here 

Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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Ottawa considers building housing on federal land: Canadian real estate news for February 17

Open this photo in gallery:

Home of the Week, Ridge House, 395910 11th Line, Clarksburg, Ont.Mitchell Hubble/Mitchell Hubble/Modern Movement Creative

Here are The Globe and Mail’s top housing and real estate stories this week and one home worth a look.

Take The Globe’s business and investing news quiz

Federal land could be used for housing to bring down costs, minister says

As Ottawa attempts to accelerate its strategy to create cheaper housing options, new ideas on how to use federally owned land have been taking shape, write Rachelle Younglai and Erin Anderssen. Housing Minister Sean Fraser said Monday that there’s an opportunity to create housing on existing federal land — adding 60 storeys-worth of new housing on top of a Canada Post building, for example. Non-profit housing developers have said access to land is one of the most critical components of delivering affordable housing because land is scarce and expensive to purchase. Fraser said developing on top of existing federal property would allow the government to help the housing crisis without permanently losing the land to private developers.

Condo buyers get an unpleasant surprise: a stiff bill for rental equipment

Residents and owners of a recently-built Toronto condominium building facing collection letters and demands for thousands of dollars are warning others to beware of vague references to HVAC rental contracts in closing documents and sales agreements, writes Shane Dingman. Residents of an east-Toronto condo say Reliance Home Comfort Inc. presented them with pricey rental contracts for air-conditioning units installed in their homes. Some say the rental contract never appeared in their purchasing agreement, and others say a small line was included last-minute. But residents who made even a single rental payment to Reliance get hooked even deeper in their contract.

Rob Carrick: What’s the bigger risk to your retirement – cuts to the CPP or declines for stocks and real estate?

A recent report from the National Institute on Ageing says the top worries of people aged 50 and up are inflation, running out of money and a reduction in payments from the Canada Pension Plan or other government benefits. But the CPP isn’t what you should be concerned about, writes Rob Carrick in his weekly column. In the NIA study, just 12 per cent of people said they were worried about a major real estate or stock crisis. Are people really such savvy, confident investors, or has it been a while since they’re tasted the fear of a full-on stock market crash? The volatility of stocks, real estate and other assets makes the stability of the CPP all the more valuable and comforting, even with its flaws.

Home of the Week: Home on a ridge, and 25 acres of peace

  • Home of the Week, Ridge House, 395910 11th Line, Clarksburg, Ont.Mitchell Hubble/Mitchell Hubble/Modern Movement Creative

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Ridge House, 395910 11th Line, Clarksburg, Ont.

The three-bedroom home located near Collingwood, Ont. was designed by Toronto-based architecture firm Superkül. Sitting on 25 acres, Ridge House is designed to enjoy the land surrounding the home. Skylights are positioned to allow the light to move around the structure during the day, and the kitchen, dining room and living room are in the centre of the one-storey building. The best feature is a small haven carved out of a chunk of the south-west corner of the home, warmed by a gas fireplace under a vaulted ceiling clad in marine-grade mahogany, designed to sit and relax during any season.

What do you think is the asking price for the property?

a. $3,999,000

b. $4,495,000

c. $5,235,000

d. $6,089,000

b. The asking price is $4,495,000.

How AI Innovators Are Reshaping Workplace Real Estate Byte by Byte

The rise of artificial intelligence (AI) providers is not just redefining algorithms, it's also reshaping the office current market.

The United States is residence to 65 of the major 100 globally ranked AI organization headquarters, in accordance to Pitchbook. As the selection of AI providers rises and the scale at which they work raises, the information center field is less than pressure to fulfill the new need.

In California, the metropolitan areas that have the most AI company headquarters are San Francisco with 6 Palo Alto with a few Santa Clara with a few San Jose with two and Campbell with two.

7 of the nine AI companies headquartered in Texas are in the Austin place.

Desire is best in the San Francisco Bay Place, the place tenants are hunting for about 2.5 million sq. toes of office space generally in Silicon Valley, according to Cushman & Wakefield's current report "From AI to Absorption: Office Demand, AI Talent Concentrations and What it usually means for Knowledge Centers." Austin has the next-highest tenant demand, but it is really concentrated with a single massive tenant requirement.

With the need for business office area also comes demand from customers for the expertise to fill it. An normal of 5,550 work trying to find AI talent in the U.S. are posted every single month. Demand from customers for AI talent begun raising in 2021 just after it observed slight downward force from the pandemic.

California is a power for AI-associated expertise with a few of the state's towns in the leading 10 metropolitan statistical parts (MSAs) for the tech employees.  Firms in the point out employ the service of additional AI-related workforce than any other state. California also has the maximum focus of AI companies in the U.S., most of which are in the San Francisco Bay area.

In Texas, choosing is concentrated in the Texas Triangle: Dallas, Austin, Houston and San Antonio.

The semiconductor sector is expected to see sizeable development via 2030, which will prompt an boost in paying out on info centre methods, infrastructure and public cloud expert services.

Semiconductors tackle two phases of the AI lifecycle: training and inference. In education, AI chips approach broad amounts of existing facts and accomplish intricate calculations. In the inference stage, AI chips are used to make inferences on the knowledge on which they have been trained.

By 2030, the primary software in the world semiconductor field is expected to be servers, info facilities and storage. In 2020, the market was valued at $76 billion and is predicted to maximize by 227% by 2030.

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Nationwide Association of Realtors Loses Its Grip on Real Estate Field

The personnel members of the Nationwide Affiliation of Realtors, the major experienced firm in the United States, ended up in a panic. Two times prior to the group’s national conference, they had established up 400 exhibition booths and had been anticipating practically 12,000 people today to arrive for three days of speakers, instruction periods and networking.

But now they had been scrambling to uncover excess protection and personal bodyguards for customers of their workforce for the reason that the previous president, who had resigned less than the body weight of sexual harassment allegations, wrote an open letter that they interpreted as a prepare to crash the convention.

The topic of the yearly accumulating for 2023 was “Own the Second.”

That working day in November, it was evident to the staff members that N.A.R. — an business that for extra than a century has stood as a monolith of impact within just the true estate sector — was getting rid of its grip. This calendar year sent a one-two punch of dual scandals, and numerous inside of the group confess N.A.R. is now in serious hazard of likely beneath. Numerous substantial-profile real estate agents are chatting about starting off their have teams.

In addition to sexual harassment allegations, N.A.R. is using on lawful issues to its coverage that necessitates a listing agent to pay a cost to a buyers’ agent in a home sale transaction — a charge that is nearly always passed on to the dwelling vendor. Just weeks prior to the conference, a federal jury agreed with a trio of Missouri household sellers that N.A.R. had operated a cost-repairing conspiracy all around agent commissions, and ordered damages of at the very least $1.8 billion.

More lawsuits, more than can be counted on both palms, are piling up. The specter of personal bankruptcy looms big. The Division of Justice is continuing an investigation into the group for antitrust violations, and some of the nation’s largest brokerages, including Re/Max and Coldwell Banker, have said they will no lengthier call for their agents to have N.A.R. membership. Redfin will have to have agents in sure markets to cease paying out dues.

“This is an extinction-stage event,” said Jason Haber, a true estate agent with Compass who has been a person of the most outspoken critics of N.A.R. considering that the harassment allegations broke. “You are not able to dispassionately seem at the info and say that every little thing is Ok.”

3 leading executives left this year, starting with Kenny Parcell, the president, who stepped down in August two days right after a New York Situations investigation discovered many allegations of sexual harassment and payments to women who claimed misconduct. Two months just before the conference, Bob Goldberg, the organization’s longtime main executive, opted to retire extra than a 12 months early. Donna Gland, who had served as head of human methods for virtually 4 decades and was going through prevalent phone calls for her elimination, declared she was retiring a single week later.

Mr. Goldberg even now built an appearance at the convention. Nykia Wright, the 44-12 months-previous newspaper govt who has been tapped as interim chief executive,attended the conference’s inaugural gala and flew out soon after less than 24 hours.

Mr. Parcell sent an open up letter to various higher-position N.A.R. customers, stating the sexual harassment allegations against him had been “false and defamatory.” He signed off his notice, which he saved as a file titled “nar nxt pdf,” with, “I hope to see so quite a few of you in the foreseeable future.” The N.A.R. personnel believed the notice meant he prepared to go to.

Tracy Kasper, N.A.R.’s new president, despatched her previous ally a stony warning. N.A.R., she stated, was aware of “immediate and major concerns” about his “possible existence at N.A.R. gatherings.” Productive immediately, the be aware study, he was banned from all gatherings, and from making call with staff members customers.

As Realtors streamed into the conference centre on the first working day, number of discovered the additional stability guards who had been hired.

Mr. Parcell did not attend.

In an e mail sent through his lawyer, Mr. Parcell informed the Periods that he had despatched the note to obvious his identify. “I have in no way sexually harassed any individual,” he wrote.

“At no spot in the letter did I say or indicate that I was attending the NAR NXT conference,” he wrote. “It is preposterous and disingenuous to infer or conclude nearly anything by the digital PDF file title as opposed to the true title of the letter and its contents.”

N.A.R.’s new leaders used the convention attempting to assure users that the team would conquer its recent problems.

“This is far from about,” claimed Ms. Kasper from the phase at NAR NXT, just prior to she asked for a “very warm, Real estate agent welcome" for the event’s keynote speaker, the actress Mindy Kaling.

The group, relieved by the vibe shift, whooped.

N.A.R.’s electric power has been in its governance of the marketplace. With a lot more than $1 billion in property, the team controls obtain to the non-public databases made use of to record households, called A number of Listing Solutions, most of which are limited to N.A.R. customers only.

The team, centered in Chicago, even owns the identify so lots of men and women use to refer to true estate brokers: “Realtor” is limited to dues-having to pay associates. N.A.R. also wields its impact in politics, operating the top rated political action committee in the country, elevating extra than $80 million for both equally Democratic and Republican candidates in the 2022 election cycle on your own.

The Justice Division sued N.A.R. over its M.L.S. guidelines in 2008. They reached a 10-calendar year settlement, and when it expired, the D.O.J. commenced issuing statements of interest — lawful briefs that place out how the conditions will have an affect on the community — in a number of pending antitrust lawsuits, such as the Missouri circumstance and a different course-motion go well with in Chicago in excess of inflated expenses.

Irrespective of its mounting lawful headaches, N.A.R. is not backing down. The business has taken the U.S. governing administration to courtroom, suing the D.O.J. in 2021 to halt them from investigating their policies. Soon after an initial victory in D.C. District Court docket, the D.O.J. appealed the ruling earlier this year.

“The D.O.J. is in this for the extensive haul,” claimed Randy Airst, the chief govt of Exceedant, the genuine estate info investigation agency.

At the heart of the justice department’s investigation is the problem around no matter if N.A.R. can maintain M.L.S. obtain driving a velvet rope.

Obtaining permission to use the M.L.S. is section of the attract to the firm for 1.6 million members. N.A.R. also has a fee plan that can be beneficial, depending on the current market.

Under a N.A.R. rule, a house vendor is essential to pay out commissions to the agent symbolizing the consumer. Dwelling sellers have very long claimed that the rule pressured them to pay abnormal charges to the agents, but in the scenario of Missouri, a team finally sued.

The residence sellers said the brokerages collaborated with N.A.R. to enforce what is termed the “cooperative compensation rule.” The trial lasted 11 days the jury deliberated for much less than a few hours.

Under the verdict, sellers would no longer be demanded to spend buyers’ agents, and agents would be free of charge to set their have fee costs. For case in point, a property seller with a $1 million residence can now pay back as a great deal as $60,000 in agent commissions — $30,000 to their agent and $30,000 to the buyers’ agent.

“The standard fabric of the U.S. authentic estate sector is staying disrupted,” said Thomas Ma, who co-launched Serious Messenger, a messaging application for actual estate brokers.

N.A.R. was sued alongside a handful of brokerages, and the verdict enables the court docket to situation treble damages that could swell to a lot more than $5 billion, much more than N.A.R. has in its coffers.

N.A.R. has claimed it will attraction.

The identical day the property sellers in Missouri won their circumstance, their lead attorney, Michael Ketchmark, had filed however yet another scenario. This a single has likely catastrophic implications for the Realtor firm.

The new go well with, which is getting termed Gibson following the title of its direct plaintiff, also helps make an accusation of conspiracy in excess of inflated serious estate commissions. It names a number of key brokerages as defendants together with N.A.R. — this time they include eXp Earth Holdings, Compass and Redfin.

This new situation represents household sellers in every single condition. When the match was submitted, the requested damages were sufficient to make business insiders’ jaws drop: Mr. Ketchmark and his staff are trying to find $200 billion this time all-around, with the understanding that the judge could again pick out to treble that range up to $600 billion.

“I’ve always referred to it as Whack-a-mole,” Mr. Ketchmark explained of using on N.A.R.’s impact. “Our target is to unplug the Whack-a-mole device and topple them fully.”

Market analysts say they do not see N.A.R. surviving.

“This is finished,” explained Mr. Airst. To occur again from the verdict with its finances intact, he said, “There are so several gantlets that N.A.R. would have to run by means of, and gain each and every time.”

The initial gantlet, Mr. Airst stated, is coming up with billions of bucks for appeals.

“The dollars is not there,” he mentioned.

Really should N.A.R. implode, some market leaders say they are prepared to fill the vacuum.

Mr. Haber, the Compass agent, reported he has been seeking out funding for a new trade group, with aspirations to build it by the middle of 2024 if N.A.R. doesn’t recover.

Actual estate mogul and truth Tv set star Mauricio Umansky, who is now suing N.A.R. soon after they experimented with to shut down his personal residence listings internet site, also explained he is laying the groundwork to begin an substitute association.

“They’re producing decisions to safeguard themselves and the several listings solutions,” Mr. Umansky mentioned of N.A.R. “They get worried more about that than protecting the realtors."

Mr. Umansky and Mr. Haber both claimed they have spoken to each and every other and are open to signing up for forces.

Robin Philips, a Realtor in Dodge, Neb., has been a member of N.A.R. for 22 a long time. She reported she was shocked that N.A.R. had not released a more powerful defense in court docket and is anxious about getting rid of profits if the rules for commissions are changed.

“I really feel like we have been definitely enable down in these lawsuits. We shell out a great deal of cash to be defended and I really do not imagine we were being,” she explained.

Gals, while not usually in large positions in the corporation, make up about 66 p.c of N.A.R.’s membership, and there is a concern that they will depart and get their dues with them.

Subsequent the conference, N.A.R.’s 69-man or woman govt committee accredited a new coverage: a life time ban from all N.A.R. functions for any elected officer who resigns or is taken out from office.

The improvements might not be ample. The sexual harassment allegations have already infected frustrations, claimed Dustin Brohm, a Real estate agent in Salt Lake Metropolis who hosts a well-liked real estate podcast, Huge Agent.

“Most brokers I discuss to say if they had the alternative to not be a member, they would choose not to,” Mr. Brohm mentioned. “The sexual harassment allegations experience like the straw that broke the camel’s back, and a lot of people today are now stating, ‘This is just insane.’”

Even agents who explain on their own as longtime loyalists claimed they are rising much more disenchanted.

“N.A.R. has performed a awful task of telling us what they do for us,” Mr. Brohm stated.

On his Instagram site, he just lately questioned his extra than 20,000 followers if they imagine their N.A.R. membership offers them value for funds.

About 97 % of respondents reported no.

10 Routines of Profitable Real Estate Buyers

Investing in authentic estate can be a good results, but likely it on your own can be hard and remarkably risky. Joint ventures, wholesaling, and property administration are just a number of means buyers can gain from actual estate. It also usually takes a minor savvy to develop into thriving in this hugely competitive sector. Below, we exhibit it normally takes far more than moxie and luck, detailing the 10 behavior that extremely successful true estate buyers share.

Crucial Takeaways

  • Authentic estate is a tough business that requires understanding, expertise, corporation, networking, and perseverance.
  • Turning into professional and educated about the serious estate market is vital, but this frequently demands much more than just in-class studying.
  • Comprehension the dangers, doing work with an accountant, discovering help, and setting up a network are all aspect of discovering achievement as a authentic estate trader.

Although sure universities offer you common coursework and disciplinary courses that can reward true estate traders, a diploma is not necessarily a prerequisite to be lucrative in serious estate investing. Regardless of whether an trader has a degree or not, there are certain properties that top authentic estate investors frequently have.

1. They Are Planners

Genuine estate investors will have to be small business experts to create and achieve limited- and extended-term goals. A organization approach is a superior beginning point, as it permits you to visualize the big photo and aim on what is significant, instead than any minimal setbacks.

True estate investing can be complicated and demanding, and a sound system can retain you structured and on process. The program really should involve believed outlays and inflows of dollars from rentals, how several units to very own, when to refurbish or enhance models, demographic changes, and just about anything else that could have an effect on your investment decision around time.

2. They Do Their Homework

Productive genuine estate traders purchase in-depth knowledge of their picked marketplaces. Holding abreast of latest trends—including any alterations in client shelling out behavior, home loan costs, and the unemployment rate—prepares you to regulate to shifting conditions. This permits you to forecast when traits might improve and produce opportunity chances. But this all begins with studying about your location of the genuine estate current market. Worldwide serious estate investor and developer Doron Yacobi agrees: "If you never know a neighborhood like the again of your hand, you really don't know it very well more than enough to make investments in."

3. They Establish Belief

Genuine estate traders are normally not obligated to uphold any unique pledge of ethics. Though taking advantage of this condition would be uncomplicated, most effective genuine estate buyers have large moral requirements. Given that serious estate investing consists of persons and calls for their trust in you, your status will be critical in any negotiations or profits prospective clients. Efficient actual estate buyers know it is far better to be good than to see what they can get away with.

4. They Acquire a Market

Effective traders regularly focus on a individual aspect of the serious estate industry in which depth of information is critical. This can get time, but once you master a certain current market, you can transfer on to other places employing the similar in-depth strategy. Some niches consist of large-close residential, minimal-cash flow multi-device housing, or rural farm rehabs.

5. They Deliver Respect

Referrals make a sizable component of a authentic estate investor’s small business, so it is vital to earn the regard of organization associates, associates, clientele, renters, and any person with whom you have a business romance. Efficient serious estate investors spend attention to depth, hear and respond to complaints and worries, and characterize their organization in a constructive and experienced fashion. This builds the form of name that makes other folks fascinated in doing work with you.

6. They Keep Up to Date

As with any business enterprise, it is imperative to keep up to day with changes in regulations, laws, terminology, and tendencies that form the foundation of the genuine estate investor’s organization. Buyers who slide powering risk not only dropping momentum in their organizations but also chance lawful ramifications when regulations are overlooked or broken. Prosperous serious estate investors keep up on true estate, tax, and lending guidelines and regulations that could directly or indirectly impression their enterprise.

7. They Are Prudent With Risk

Inventory industry buyers are inundated with typical warnings regarding the inherent challenges involved in investing and the probable for reduction. Actual estate traders, nevertheless, are far more probable to see and hear people professing the reverse: that it is effortless to make cash in real estate. Prudent serious estate buyers comprehend the threats of authentic estate specials and the lawful implications associated and modify their enterprises to lower individuals dangers.

"The ideal piece of advice is to de-risk at the beginning," stated Nicholas Liberis, husband or wife at architecture and improvement agency Albo Liberis.

These types of a strategy means minimizing likely pitfalls and uncertainties as significantly as attainable in advance of committing important methods to a serious estate job or investment decision. This tactic requires a thorough assessment and hazard mitigation at the earliest levels of the investment decision procedure. "You make funds on the get and not the sale," Liberis said.

8. They Have an Accountant

Taxes comprise a substantial section of a genuine estate investor’s annually charges. Understanding latest tax guidelines can be difficult and can just take time away from the small business at hand. Sharp actual estate investors keep the providers of a skilled, highly regarded accountant to handle the business’s textbooks. The prices associated with hiring an accountant can be negligible in comparison with the price savings a skilled can provide to the small business. “Good tax organizing can be as vital as the asset obtained,” Yacobi explained, “while negative tax scheduling can sink the expense.”

9. They Seek out Assist

Studying the authentic estate investing business enterprise is demanding for somebody attempting to do things on their very own. Productive authentic estate investors often attribute portion of their good results to other individuals, no matter if it’s a mentor, attorney, or supportive buddy. Instead than danger time and revenue tackling a hard problem by yourself, thriving true estate buyers know it is well worth the additional fees to embrace and discover from other people’s skills.

Mortgage loan lending discrimination is unlawful. If you believe that you have been discriminated in opposition to primarily based on race, faith, sex, marital standing, use of community support, national origin, disability, or age, there are steps that you can just take. 1 these action is to file a report with the Customer Money Protection Bureau or the U.S. Section of Housing and City Progress.

10. They Construct a Community

A qualified community can offer significant help and make options for both new and experienced authentic estate traders. This style of group, composed of a well-decided on mentor, enterprise partners, consumers, or customers of a nonprofit firm, allows buyers to obstacle and help just one another. Simply because significantly of true estate investing relies on experiential learning, savvy genuine estate traders have an understanding of the importance of building a community.

What Is Real Estate?

Real estate is home and any lasting enhancements hooked up to the land, whether all-natural or artificial, such as water, trees, minerals, structures, houses, fences, and bridges. Authentic estate is serious house and differs from private residence, which is not permanently attached to land, such as motor vehicles, boats, jewellery, furniture, and farm machines.

What Is an Accountant?

The phrase “accountant” refers to a experienced who performs accounting features this kind of as account analysis, auditing, or financial assertion evaluation. Accountants perform in corporations, inside account departments in massive companies, or in personal tactics. After meeting state-precise instructional and screening demands, these gurus are licensed by countrywide qualified associations.

What Is a Business enterprise Strategy?

A business enterprise strategy is a created document that describes in detail the goals of a business—usually a startup—and its methods for obtaining its objectives. A business enterprise prepare lays out a penned highway map for the agency from marketing, monetary, and operational standpoints. Company plans are significant for the company’s external and internal audiences. For occasion, a business enterprise plan is employed to draw in traders before a corporation has established a demonstrated track history or to protected lending. They are also a great way for companies’ government teams to be on the exact same webpage about strategic steps and to preserve themselves on target toward the established targets.

The Base Line

Irrespective of ubiquitous advertisements declaring that real estate investing is an uncomplicated way to wealth, it is, in simple fact, a difficult endeavor requiring knowledge, planning, and focus.

In addition, mainly because the small business involves sturdy relationships with folks, buyers profit in the long operate by operating with integrity and showing regard to associates and purchasers. Nevertheless it may be reasonably simple to gain shorter-lived profits, establishing a extensive-term serious estate investing company needs ability, effort, and these 10 vital behavior.

19 Real Estate Pros Share Their Lesson Learned Moments

As you may know, here at Inman, we love to celebrate hard-working real estate pros — those boots-on-the-ground agents, who’re pounding pavement, having real estate conversations, and finding buyers, sellers and deals-to-be-had.

We also love to learn how they got where they are, the wins they’ve celebrated and the tough lessons they’ve learned along the way. That’s why, since 2018, Inman’s Christy Murdock has been sniffing out those real estate pros across the nation to ask them what they know now in a recurring column called Lesson Learned.

This year had its fair share of lessons to learn as the market became more challenging. Along the way, these 19 real estate pros shared their personal career takeaways and advice for other agents in the field facing similar challenges.

A native of Cleveland, Ohio, Josh Stein moved to Miami Beach in 2000. Since then, he has developed his high-flying real estate career without ever losing sight of his passions and interests.

Stein is a former powerboat racer and winner of the 2001 APBA Offshore World Championship in One Design. He has been featured on the National Geographic TV Series Years of Living Dangerously alongside comedian Jack Black, discussing how climate change affects the Miami real estate market.

Stein markets luxury properties to international buyers and is the co-founder of one of Miami’s leading real estate marketing and tech firms. Find out how this luxury agent developed his high-flying real estate career without ever losing sight of his passions and interests. Read more.

As the founder of The Katzen Team at Douglas Elliman, one of the top-ranked teams nationwide, Frances Katzen combines exceptional knowledge of the New York City real estate market with a global perspective that allows her to better serve her international clients. Born in South Africa and raised in Sydney Australia, she maintains a network of contacts in the U.S., Europe, Australia and the Middle East.

Find out how this powerhouse team leader built a business that has earned the loyalty of financiers, celebrities, real estate investors, developers and a who’s who of the city’s artistic and cultural life. Read more.

Find out why Buchbinder believes in the power of a relationship-based business, and learn what he’d be doing if he wasn’t selling real estate. Read more.

Daniel Ekerold

A former member of the British Royal Marines, Daniel Ekerold prides himself on his tenacious work ethic and relationship-building ability. Ekerold works with builders, real estate attorneys and industry leaders, offering full relocation and concierge-level real estate services. Recent notable deals include a record-breaking sale at The Bristol and for a residence in Coconut Grove.

Find out what lessons he’s learned along the way, what training has been most impactful in his career, and what advice he’d pass on to agents who are just starting out in the industry. Read more.

Central Florida agent Anne-Marie Wurzel brings her background in advertising and copywriting to bear on the practice of real estate, including marketing experience from more than 300 properties and management of her agency’s largest client, a national REIT. She launched her own business nearly two decades ago and is still growing strong.

When asked what three things best describe her, she said: “I am a relentless advocate for my family, my daughter and my clients. I love Jesus. I am an avid tennis player and very competitive.” Read more.

A native New Yorker and founding agent at Compass Providence, Kira Greene has traveled an eclectic path to the real estate industry. Before real estate, she worked in New York City in the ’90s for one of the first interactive marketing and web development companies in “Silicon Alley,” helping to produce the first Broadway musical website for Andrew Lloyd Webber.

She moved to Providence in 1998, and loves its arts, culture and restaurant scene. She started an online marketing division at an ad agency while at the same time, she and her husband began investing in multi-family homes and renovating single-family homes. She caught the real estate bug and went full-time in 2012. Find out what she’s learned along the way and the wisdom she’d share with agents today. Read more.

As a top-ranked, award-winning real estate professional specializing in Manhattan real estate, Mississippi native Noble Black brings a hyper-personalized approach to the practice of real estate. His law degree from UVA and years of work as an attorney on Wall Street have given him a unique 360-degree perspective on the legal and financial implications of even the most complex transactions, which keeps him interested and challenged even after nearly two decades in the industry.

Although Black is serious about the exceptional client service he provides, that doesn’t mean he’s an extrovert. “While real estate is a very social industry, I’m actually incredibly shy,” he said. Find out how he puts his knowledge and experience to work and what he’s learned in his years in the business. Read more.

Top-producing luxury agent Samantha Curry has sold everything from showstopping penthouses to opulent waterfront estates, including a 2021 record-breaking sale in Highland Beach for $30.25 million. Learn how this Palm Beach, Florida, top producer turned her childhood interest in real estate into $1 billion-plus in luxury sales, and find out what advice she’d give to any aspiring real estate agent. Read more.

In honor of Luxury Month, Troy Palmquist sat down with one of the leading luxury agents in Austin, Texas, at one of the city’s pinnacle properties, The Legacy of Lake Austin. Bridget Ramey of Sotheby’s International Real Estate has sold more than half a billion in inventory since 2020, making her one of the most productive agents in her market and among the top 100 in her company globally. Bonus: Watch the video interview for the full conversation. Read more.

New York City associate broker Burt F. Savitsky is an award-winning real estate professional specializing in condominiums and co-ops. Despite being a 30-plus year resident of the city’s Upper East Side, he’s also a die-hard Boston sports fan. Savitsky is a lover of classic sports cars, and when asked what goal he hasn’t accomplished yet, he says that he’d love to try stand-up comedy.

Find out how this real estate standout helps clients navigate the complexities of the co-op board approval process while leaning into his own inimitable style to stay connected. Read more.

NYC associate broker Reba Miller knows New York like the back of her hand. “My car is my office,” she says. “I always think I would be a great Uber driver.”

Instead, she has built a distinguished real estate business through “nonstop” work and dedication. Among her motivators? “I am a fierce competitor,” she says. “I don’t mind losing; I just always want to give it my best. I can’t sleep at night if I don’t.”

Learn how New York City’s Miller learned that your next big deal can come from anywhere — even lunch. Read more.

Gerard C. Splendore

You probably know Gerard Splendore from his column for Inman where he talks about everything from elevators to early 20th-century home styles. However, it’s not his encyclopedic knowledge of residential architecture that sets him apart. It’s his dedication to problem-solving and his ability to see the humor (and even “ludicrousness”) in real estate that allows him to provide world-class service and attention to his New York City clients.

Find out how this New York City broker provides exceptional client service while maintaining his sunny disposition. Read more.

NYC real estate agent Patrick Clark draws on his decade of experience in finance to inform the guidance he provides to clients throughout their transactions. A lifelong learner, Clark focuses on staying current on the latest trends and best practices in real estate so that he can provide his clients with the most up-to-date information and advice. Discover how his unique background, hands-on approach, and the strong connections he cultivates with clients and colleagues help him to succeed in the fast-paced world of Manhattan real estate. Read more.

After starting out in the fashion industry, Aimee Fink combined her understanding of the luxury market with her knowledge of New York City’s neighborhoods to launch a career in high-end real estate. Her eye for all things luxury combined with her expertise in closing deals affords her clients a decisive leg-up whether they’re looking to buy or sell.

Passionate about giving back to the community, Fink donates part of her commission from each real estate deal to a charity of her clients’ choice and volunteers at NYU Hospital, where she puts her aesthetic sensibility to work making jewelry with children. Find out how she got into real estate and why she’s so focused on making a difference.

Find out how this veteran of the fashion industry turned her knowledge of high-end retail to the business of luxury real estate. Read more.

Before beginning her real estate career, Diana Sutherlin spent more than 20 years as the president of Image Impact, Inc. and Creative Touch Media, giving her unique expertise in sales training, body language interpretation, communication styles, and objection handling is highly valuable in real estate. This unique background allows her to provide hands-on, full-service design, sales and marketing expertise that sets her apart from other agents.

Sutherlin has been the top-selling agent for new construction and waterfront properties for over 14 years, with projects including 77 Hudson, Gull’s Cove, Trump Plaza and more. She has received numerous awards, including Platinum level awards for 13 years and four consecutive Triple Platinum Awards. Sutherlin’s record-breaking sales include the highest-priced waterfront condo in New Jersey’s history. Learn how this Jersey City pro puts her background in acting and marketing to work to improve client relationships. Read more.

As co-head of New Development for Compass Development Marketing Group in New York, Dan Parker works alongside the brightest minds in New York real estate, offering unparalleled expertise and guidance to his developer clients. He has lived in Brooklyn since 2001, first in Carroll Gardens, then in Brooklyn Heights and now in Williamsburg.

Like many New Yorkers, Parker says he “walks everywhere” and is “constantly stopping to look up at buildings. It drives my husband nuts and often makes us late to wherever we’re heading.” Find out how he brings a lifelong love of design to his work with the city’s biggest developers. Read more.

Ranking among Warburg’s top brokers, and currently ranked as the No. 2 producer companywide, Annie Cion Gruenberger enjoys an exceptional professional reputation in her New York City market. Many of her clients are repeat or referral clients, often spanning several generations.

Described by one client as “hard-working, patient and no-nonsense,” Gruenberger splits her time between Manhattan and Boca Raton. Learn how she lives out the lifelong commitment to client service she learned from her father and her top advice for other agents. Read more.

Born in Puerto Rico and raised in Miami, Camila Lincowski moved to Las Vegas in 2015, building her client book “from the ground up.” With clients ranging from professional athletes to performers on the Las Vegas strip, she’s a 24/7 agent. Along with her husband, a top Las Vegas lender, she prides herself on giving “undivided attention” to her clients from start to finish. Find out how she brings her winning personality to her work and why her mom says she’s “the best Realtor.”

Find out how Las Vegas Realtor Camila Lincowski brings her winning personality to her work and why her mom says she’s “the best Realtor.” Read more.

A former sports journalist and magazine editor, and current podcast host, Val Burmester brings a wealth of experience and entrepreneurial spirit to her work as an award-winning broker with Sotheby’s International Realty. As a Top 1 Percent real estate professional from 2007 through 2023, she attributes her success, in part, to her talent as a connector.

“I am a huge connector. I love to connect with people. I spend most of my day connecting to people and connecting people to each other. I’m usually starting some networking group, a golf group or bringing friends and family together to share amazing wine and food.”

Find out how Seattle real estate broker Burmester started her business by making exceptional connections from Day 1. Read more.

Do you want to be featured on an upcoming “Lesson Learned” column? Reach out to us here.

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Rural Renewables, 45V Hydrogen Fight, Election Year Electric Vehicles, Carbon Utilization Investment, Real Estate Boom For EV Chargers

A clean energy industrial revolution reshaped the United States’ economy in 2023, supercharged by the Inflation Reduction Act and consumers embracing clean energy technology – America finally began building again, this time powering climate action.

But even though Red and Purple state economies are booming thanks to billions in new clean energy investment and onshored jobs, the specter of election year fights looms large in the picture for 2024.

So what will the year ahead hold for the booming U.S. clean energy economy?

Policy experts and clean technology executives shared five predictions for 2024: Rising rural support for renewable energy, a fierce fight over clean hydrogen tax credits, electric vehicles (EVs) in the election spotlight, surging carbon utilization-related investment, and a real estate boom for electric vehicle charging infrastructure.

Support for renewable energy in rural America will grow as new projects are built

Robin Pressman, Head of Embold Research

2023 saw a rise in the politicization of renewable energy development with clean energy opponents increasingly mobilizing in rural communities to build opposition. This is set against the backdrop of new investments in renewables spurred by the Inflation Reduction Act and a looming presidential election, which will intensify debates over renewable energy projects across the country.

My company, Embold Research, recently explored opinions toward renewable energy and what we might expect in 2024. Overall, support for wind and solar in rural communities is growing and outweighs opposition in these typically conservative areas. Supporters are driven by concerns over climate change, the economy, and a desire for energy independence. Renewable energy is solidly supported by rural Independents, with 74% expressing total support for solar and 64% for wind. A slim majority of rural Republicans support solar (54%) and slightly over a third support wind (36%).

But going into 2024, we expect partisan divides will amplify opposition to renewable development and exploit renewable energy as a wedge issue to mobilize conservative rural voters. Self-identified "non-MAGA
" rural Republicans show significantly stronger support (71% for solar, 47% for wind) than their MAGA counterparts, and MAGA Republicans compose a plurality of Republicans in these communities.

Many renewable energy developers have been cautious about engaging in local political debates and neglected to allocate the resources necessary to overcome ideology-based pushback. However, as local-level opposition increases, fueled by resources being poured into these communities, renewable companies must increase community engagement to understand local concerns. They will have to work closely with residents to share information and ensure communities can fully benefit from the clean energy transition. Locally trusted clean energy advocates must also share the opportunities clean energy projects bring to rural American communities.

If this happens, data suggests local sentiment will shift as residents become familiar with renewable energy projects and witness positive impacts in neighboring communities. As more projects get sited and demonstrate success stories, more people will realize the local benefits of these projects, creating a virtuous cycle.

But not without a fight.

A “fierce fight” over the Inflation Reduction Act’s 45V clean hydrogen tax credits

Rachel Fakhry, Policy Director, Emerging Technologies, Climate and Clean Energy Program, NRDC

2024 will see a fierce fight over implementation of the IRA 45V clean hydrogen tax credits. A roiling debate in 2023 muddled several high-stakes policy questions that are fundamental to the clean energy transition—hydrogen policy, what it means to actually be powered by clean energy, and global industrial commodity trade.

45V is the world’s largest clean hydrogen production subsidy. They are uncapped, expected to pay hundreds of billions to the nascent industry, tied to the greenhouse gas intensity of hydrogen projects, and the Treasury Department is responsible for prescribing how hydrogen projects will account for their emissions to qualify.

Late last week, Treasury published proposed guidance defining how hydrogen projects should account for their emissions, raising a challenge for electrolytic hydrogen projects, eligible for the generous top credit. Electrolyzers are power hungry—a large-scale hydrogen production facility could have similar electricity demand to a medium-sized city. Unless they are 100% powered by clean energy, electrolyzers will spur fossil fuel generators online to help meet their electricity demand, generating hundreds of millions of tons of increased emissions and spiking electricity prices.

Treasury’s proposed electrolytic hydrogen guidance includes strong protections for the climate, communities, and electricity consumers to avoid those harmful consequences. It is also set to turbocharge substantial industry growth. Several industry groups, academics, environmental groups, consumer groups and policymakers have strongly supported – or are coming out supporting – the proposal. But some industry groups including oil and gas majors and large utilities are fiercely opposed.

The fight will reach its apex in 2024 as Treasury finalizes guidance determining the course of this nascent industry, and whether hundreds of billions of dollars in subsidies will bolster or hinder our clean economic transition. Some of the broad loopholes Treasury is considering would cater to a few incumbent energy companies and act as a sledgehammer to the strong proposed rules.

The Biden administration must hold firm against expected lobbying to weaken 45V. Given the climate and consumer risks, Treasury must surgically providing additional leeway in final guidance. We will be closely watching.

Electric vehicles in the spotlight during the 2024 election

Rachel Muncrief, Acting Executive Director, International Council on Clean Transportation

“Election Year” – these two words will define 2024 in the United States. Jobs and the economy will again be central for voters – when haven’t they been? And there’s evidence that climate change continues to surge as a voting issue, especially for younger voters. Taking this into account, and considering broad media coverage of the UAW strikes, China’s role in the battery supply chain, and billions in investments being delivered by the Infrastructure Investment and Jobs Act and Inflation Reduction Act – I predict electric vehicles (EVs) will be in the spotlight during the 2024 election.

The facts are clear: EVs can be a win-win for the environment and economy. Overwhelming evidence shows we don’t need to choose between saving our environment and having a thriving economy. In fact, a smart EV strategy would significantly boost U.S. jobs.

This might sound like good news for President Biden – who has worked to promote EVs and bolster U.S. EV manufacturing. And it would be good news, except…

More EVs means less burning of fossil fuels. And that means EVs have powerful, well-funded opponents who don’t care about facts. Their strategy centers on sophisticated misinformation campaigns and big donations to anti-EV candidates; their aim is to make EVs a polarizing political issue.

That polarization is frustrating to those of us who work on clean transportation. We know EVs are a better technology – more fun to drive, quieter, lower maintenance. They’re a cleaner technology – much lower emissions, even when considering mining for battery materials. And, they’re a cheaper technology – some are already cheaper than comparable conventional models and others will get there soon.

So EVs will be centerstage in this election - but will facts or propaganda win the debate? Only time will tell.

Investment in carbon utilization fuels emissions reductions

Etosha Cave, Co-Founder and Chief Science Officer at Twelve

In 2024, we expect a surge in carbon utilization-related investment, which is carbon dioxide (CO2) captured and upcycled into other products, rather than released into the atmosphere. There is growing recognition that carbon isn’t the enemy — wasted carbon is. Carbon Transformation and other utilization approaches are critical to reducing emissions from hard-to-abate industries and can transform everyday products into carbon sinks.

The aviation industry will continue driving most carbon utilization investment as airlines double down on sustainability commitments and support efforts to scale up production of power-to-liquid sustainable aviation fuel (SAF). We recently broke ground on the first commercial-scale U.S. plant for producing SAF from captured CO2, and the industry has a long way to go to scale production to meet global aviation fuel demand. The first commercial-scale facility is expected to reach a production capacity of 1 million gallons per year by the end of 2024, but that’s a drop in the bucket compared to the 8 million barrels per day the aviation industry currently consumes.

However, airlines recognize the critical role that power-to-liquid SAF will play meeting emissions reduction goals and are helping bring production to scale. SAF is necessary to reduce emissions from long-haul flights, which contribute a majority of CO2 aviation emissions, because of battery density limitations. Power-to-liquid SAF are newer to market than SAF made from biomass, but provide advantages in terms of emissions reductions and feedstock availability, and can reduce lifecycle emissions up to 90% while bio-based SAF delivers at most an 80% reduction on average.

Furthermore, we’re also seeing interest in SAF from corporations working to reduce Scope 3 emissions from business travel. We have a joint MOU with Alaska Airlines and Microsoft for this reason, and the first company to publicly support the production of E-Jet fuel wasn’t actually an airline, but Shopify.

Interest and investment in power-to-liquid SAF will reach new heights next year, driving the majority of carbon utilization conversations.

Billions spent on real estate to build electric vehicle charging infrastructure

Hannah Jacobus, Vice President of Real Estate at Voltera

Some $1 billion will be spent on acquiring real estate for fleet charging facilities within the next year, at least double that will be spent on public charging station sites.

In California, the competition will be highest, largely due to its regulations, like the California Air Resources Board's Advanced Clean Fleet Rule, which goes into effect on January 1, 2024, as well as the limitation of qualified and developable land in prime locations. Beyond California, competition for land will be greatest in states with lots of port activity, including in the Northeast, Midwest, Southeast, and Texas as again, land is limited in those areas.

Identifying and acquiring real estate for commercial zero emission vehicles (ZEVs) is made more complicated by the fact that many operators require their facilities to be strategically located in particular locations. This means many charging developers are often vying to deploy ZEV infrastructure facilities in constrained geographic areas, which often exacerbates time, complexity, and cost.

In areas where competition for sites is high and/or permitting is particularly complex and/or utility interconnection is particularly lengthy, developers have to evaluate multiple sites in order to ensure successful acquisition. This is of course only after identifying the target market and submarket – intensive processes on their own. This translates to drumming up the market, maybe with additional artificial demand due to multiple negotiations ongoing at once, and therefore drives costs up.

Here’s another major sign Toronto’s real estate market is in big trouble right now

There are a handful of trends that show how badly Toronto's housing market is flopping right now, and the latest may be the most concerning of all.

As noted by local mortgage expert Jason Geall on his well-followed TikTok account covering the market, more and more owners are defaulting on their mortgages, leading to an increase in cases of power of sale.

"Is this going to be the new norm? Seeing 'power of sale' on top of for sale signs?" Geall asked in a video Monday, standing in front of a property in the bougie York Mills area of Toronto.

In the background, viewers can see an example of the phenomenon he's talking about, in this case, for a vacant plot of land that lenders have seized to sell and get their money back.

The property on Bayview Ridge Crescent is currently listed for $3.15 million, advertised as the perfect, building permit-ready opportunity for someone's dream castle — except that virtually everyone is balking at the current market with its high interest rates and instability.

"We've been hearing so much about power of sales going up and up in the last little while — is this the start?" he adds, referring to a graph showing, per data from the Toronto Regional Real Estate Board, that residential power of sale listings in the GTA broke new records in October.

"Seeing this type of stuff even in the high end areas is definitely kind of concerning."

This is just one example of things extremely atypical of our perpetually (and still) overpriced market: major developments put on hold, sales slowing to a trickle and buyers walking away from hefty deposits knowing their finished home won't be worth what they paid.

Then there are the indications of a new type of desperation from those who have always had the upper hand in the market — sellers — with homes sitting on the market for far longer than ever, going for below asking price.

In addition, strange new rentals popping up as they try to acquire tenants to cover higher mortgage costs.

While this is all good news for buyers, those who can afford a home in and around Toronto right now, even if prices slide, are limited to a select few demographics, given current lending rates.

Even wealthy investors, who have an alarmingly vast stake in the city's real estate, are being scared off.

Lead photo by

Royal LePage Realty Centre, Brokerage via Strata.ca

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