Shlomo in Thirty

Amazon Retail has yet to spring a profit and its side businesses are keeping it afloat.

In 2021 if not for the advertising business they would’ve lost over $20 billion. 

Before you tell me I can’t pick apart the businesses, bear in mind that the advertising business cannibalizes Jeff Bezos customer first focus for the sake of profits which he didn’t want to be judged by. 

Whole Foods seems to be stagnant, and Amazon Fresh early reviews are abysmal both on the experience and performance side. 

Why don’t they just invest it and juice profits?

#amazonretail #cre #20billion #jeffbezos #creinvent #advertisingbudget #wholefoods #amazonfresh

We see the news about rates rising and distress is increasing — funds are being raised, and the war drums are certainly rattling.
 
Distress buying opportunities are not yet here and Lenders are not yet taking major losses. Here are three indications that winter is coming.
 
1.        Deals that supposedly traded are back on the market
2.        Hard money lenders are very busy
3.        Lenders are getting very slow on draw requests
 
If you are seeing the leaves changing in your market, please comment below

#winteriscoming #cre #funduncertainty  #creinvent #lenders #recession #fund

Fortunes are made in a downturn but more than capital requires expertise to get to the right assets at the right price.
 
It's called a downturn for reason -- resolution will not be overnight, it'll take some time.
 
It's possible to buy cheap in a downturn because it doesn't look cheap to the rest of the world. To them, it's a falling knife.
 
So you must ask yourself three questions:
1.    Do I have the tools and relationships to find the right deals?
2.    Do I have the ability to restructure complex messes?
3.    Do I have the patient and knowledgeable funding sources to execute my strategy?

#capitalmarkets #cre #downtown #creinvent #funding #strategyexecution #strategyconsulting

How does one resolve a problem they can't even identify?
 
Work from home is here to stay and the office is necessary. We don't know, however, the level of blending. Sure the labor market is loosening and yes, companies are pushing employees to come back to the office, but to even know what an accepted buildout looks like? 
 
And even if we did, would they give the landlord enough term to amortize those high construction costs across? 
 
Until we identify the problem we will see continued financial stress and collapse of downtowns.

#workfromhome #backtooffice #office #downtown #cre #crepodcast #creinvent

Following the herd is extremely dangerous place to be. Let’s analyze the major food groups. 
 
Residential, like a former New York City mayoral candidate said ,the rent is way too darn high and so are values. 
 
Hospitality, it still hasn't recovered completely from COVID and that followed a period of major development. 
 
Office, COVID’s decimated office and we have a new way of working. 
 
Retail, well we all know e-commerce to the way of the future and retail is dead -- just don't tell the people in e-commerce who can't spring a profit.
 
Industrial, well if e-commerce is dying industrial is declining.

#herdmantality #ecommerce #creinvent #crepodcast #downtown #residentialrealestate #commercialrealestate #industrial #retailrealestate #hospitalityrealestate

Industrial real estate is white hot and now that Amazon is subleasing millions of square feet it's pound for pound hotter than before. 
 
Did you know that pureplay e-commerce as a whole is not a profitable approach to selling?
 
Amazon would have lost over $24 billion in 2021 if not for the advertising business. 

I guess investors I'll just blindly riding a wave. After all Shopify has got a market cap of $41 Billion.

Winston Churchill and FDR didn't just wake up one day and said let's storm the beaches of Normandy. 
 
Over the course of a couple of years countless operations deceptions and preparations were made just for D-Day. 
 
Despite all that work, Eisenhower prepared a speech in the event things went South. 
 
Your loan documents are terribly one sided, banking laws were written by the banks and a borrower has very little chance prevailing in a foreclosure. 
 
So if you call me once the banks already attacked, miracles do happen but your chances of success are very slim.

A real estate loan workout -- it's like a boxing match. It requires months of preparation and heavy work. Then you get knocked down in each of the first three rounds and you can still come back and win the match. 
 
Attempting to work out the loan on your own, well, that can be slow acting poison. You'll never know you failed until it's way too late. 
 
Actions you take six months before you default can have positive or negative implications three gut wrenching years down the road.

If the Fed starts selling off commercial real estate loans from its balance sheet, it will drive up rates even more on new loans, because of a bond buyer can realize higher return by buying at a reduced price from a Fed sale they'll demand the same from a new loan issue. 
 
The double whammy effect however is that institutional real estate allocations, if they're eaten through, along with them will be the appetite for lower yields and what do you have left, but opportunistic funds and investors that will drive prices down even more, to increase rates and returns even higher.

This time it’s different. 

It’s not just the economy or the classic run up in values that’s causing a decline. 

It’s the disconnect between rigid bricks and mortar and the fast pace changes in technology. 

Retail - I can have a store on my phone. Office - I can work from anywhere. Industrial, is in fact classic overcompensation. 

It’ll take property innovation, not just time to get us out of this mess. No, I don’t mean garbage tech, I mean real business process innovation.