On today’s show we are talking about the softening of the residential housing market that is underway across both the US and Canada. 

The seasonally adjusted numbers are in for the month of June which now shows four months of steady decline compared with the previous months. Again, we need to remember that these are seasonally adjusted numbers. The June numbers are still about 2% higher than the same period in 2024. 

This is true for the top 20 primary markets across the US as well as the national averages. The numbers are pretty consistent for both the Case Schiller report as well as the National Association of Realtors. 

The national home builders are also experiencing falling demand. New single family home sales have fallen by 6.6% in the first six months of 2025. 

Home builders have tried to adapt to the falling demand by building smaller and more affordable homes. But sales have fallen even with these adaptations to market demand. 

----------

**Real Estate Espresso Podcast:**
 Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)  
 iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)  
 Website: [www.victorjm.com](http://www.victorjm.com)  
 LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)  
 YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)  
 Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)  
 Email: [[email protected]](mailto:[email protected])  
**Y Street Capital:**
 Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)  
 Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)  
 Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are unpacking the shocking GDP announcement that was published at 8:30 on Wednesday morning July 30. The market expected a 2.3% growth rate and the actual published number blew past the expectation with a 3% annualized growth rate in the second quarter. This is in stark contrast to the negative 0.5% growth rate in the first quarter.

So the obvious question is how did the economy swing from economic contraction in the first quarter to 3% growth in the second quarter?

On today’s show we are going to look at the underlying components of the GDP calculation to get an understand what is happening.

There are only a handful of variables, five of them in fact that move the needle. There is consumption, investment, inventory, imports and exports.

Let’s look at each one of these factors and determine the impact of each one on the GDP calculation.

------------

**Real Estate Espresso Podcast:**
 Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)  
 iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)  
 Website: [www.victorjm.com](http://www.victorjm.com)  
 LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)  
 YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)  
 Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)  
 Email: [[email protected]](mailto:[email protected])  
**Y Street Capital:**
 Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)  
 Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)  
 Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On yesterday’s show we talked about building perimeter access. This is part of an entire building system for your residential apartments. 

The other main question is how to provide keys for your apartments. If you use a hotel key card system then you are sending an indirect message to your residents that you don’t expect them to stay for very long and that idea can get planted in a resident’s mind early in the process. They may not say anything about it, but there is a nagging idea in the back of their mind that they should not think of this apartment like their home. It’s more like a short term stay. 

If your property truly is intended for a short term stay, then there is no problem with that idea. But if you expect people to stay for years and years, that’s probably not the idea you want to reinforce every time they enter their apartment. 

In an ideal world you would want the same database that programs the building’s perimeter to also provide the access to the apartments. 

----------------

**Real Estate Espresso Podcast:**
 Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)  
 iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)  
 Website: [www.victorjm.com](http://www.victorjm.com)  
 LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)  
 YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)  
 Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)  
 Email: [[email protected]](mailto:[email protected])  
**Y Street Capital:**
 Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)  
 Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)  
 Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are looking at one of the most over-looked aspects of real estate product design. The problem is that the architects don’t get involved. The electrical engineer and electricians don’t get involved, and the general contractor doesn’t get involved. These systems often end up as an oversight or an afterthought. 

Let’s start with building access. On today’s show we are going to only focus on securing the perimeter of your building and the common areas and amenities.

The way residents interact with your building is often a function of the technology decisions you make to incorporate systems within your building. The life cycle cost of operating and maintaining those systems is also a function of the choices you make. 

---------------

**Real Estate Espresso Podcast:**
 Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)  
 iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)  
 Website: [www.victorjm.com](http://www.victorjm.com)  
 LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)  
 YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)  
 Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)  
 Email: [[email protected]](mailto:[email protected])  
**Y Street Capital:**
 Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)  
 Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)  
 Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Marc Koran is based in Montreal, Quebec which is the headquarters of Campus Habitations. The first of several projects is in Mont Tremblant, a ski resort just North of Montreal. On today's show we are talking about the benefits of renting apartments to corporate clients and not just individual tenants. To connect with Marc and to learn more, visit https://www.campushabitations.com/ or connect with him on LinkedIn at https://www.linkedin.com/in/marc-koran/

-----------

**Real Estate Espresso Podcast:**
 Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)  
 iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)  
 Website: [www.victorjm.com](http://www.victorjm.com)  
 LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)  
 YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)  
 Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)  
 Email: [[email protected]](mailto:[email protected])  
**Y Street Capital:**
 Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)  
 Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)  
 Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Patrick Grimes is based in Honolulu Hawaii where he is a principal at Passive Investing Mastery. On today's show we are talking about what true diversification looks like. As many of you know, our team develops senior housing and this coming week, I'll be part of a panel on senior housing. To connect with Patrick and to learn more about the panel discussion on Senior Housing, visit https://passiveinvestingmastery.com/.

------------

**Real Estate Espresso Podcast:**
 Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)  
 iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)  
 Website: [www.victorjm.com](http://www.victorjm.com)  
 LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)  
 YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)  
 Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)  
 Email: [[email protected]](mailto:[email protected])  
**Y Street Capital:**
 Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)  
 Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)  
 Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are talking about the conversion of office space. 

The problem with most office buildings is that they are the wrong shape to build apartments. Many office buildings are square in shape and most apartment buildings are rectangular, or L shaped, or U shaped. 

Apartment buildings need lots of windows. Living rooms need windows and bedrooms need windows. Offices do benefit from natural light, but in truth, a sunny south facing window creates so much glare that it makes it impossible to read the screen on your desk. Windows remain covered for much of the day. 

We’re going to be using a case study of an office building that is part of the Kanata Research Park. The building is part of a very large office park and is located next to a four star hotel that is also located within the office park. 

It’s no surprise that office vacancy has hit this location, just as it has impacted many offices during the pandemic and the slow return to office trend since the pandemic. 

So the owner of the building made the decision to convert one of the half dozen buildings on this particular site to residential and move the remaining commercial tenants to other buildings within the same complex. 

-------------

**Real Estate Espresso Podcast:**
 Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)  
 iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)  
 Website: [www.victorjm.com](http://www.victorjm.com)  
 LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)  
 YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)  
 Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)  
 Email: [[email protected]](mailto:[email protected])  
**Y Street Capital:**
 Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)  
 Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)  
 Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are looking at what might become another tectonic force in the world of real estate investing. 

The White House provides a steady stream of topics that are worthy of discussing on any real estate podcast. This week is no exception. On Tuesday of this week, the President floated the idea that maybe houses will be exempted from capital gains tax. The thinking is that this would stimulate the real estate market. 

A change like this to the tax code would require Congressional and Senate involvement. The final definition of what type of property would qualify to achieve the tax exempt status has not been articulated. 

So on today’s show we are going to dive into the dangerous realm of speculation for what that might be the consequences of such a change. 

------------

**Real Estate Espresso Podcast:**
 Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)  
 iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)  
 Website: [www.victorjm.com](http://www.victorjm.com)  
 LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)  
 YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)  
 Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)  
 Email: [[email protected]](mailto:[email protected])  
**Y Street Capital:**
 Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)  
 Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)  
 Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are looking at the impact of data centres on the local economy where these are located. We are looking at the energy component, and the technology life cycle. 

You have no doubt heard the statement that “energy is the economy.” It is true that for every unit of GDP there is an equivalent unit of energy consumed somewhere in the world. 

But in this instance, energy is the lifeblood of the AI industry. In addition to the gold rush in AI, there is a recognition that the world is not generating enough electricity to satisfy the incremental demand from data centres. 

What caught my attention this past week was not the plethora of announcements of new power generating capacity. Although that is impressive, there is something even more important that we will explore. 

Let’s take a look at the aggregate power generation announcements in just the past month alone. Several of the announcement have been in the range of 2GW. We need to put this in perspective. 2GW of power generation is enough to power 1.5M homes. This is enough to power a city like Phoenix or San Diego or San Antonio. So when we measure the power consumption of a large data centre complex, we are comparing it to the GDP of an entire city of 1.5M homes, or about 3m people. 

The primary driver of obsolescence is the relentless pace of Nvidia's (and other manufacturers') innovation cycle. New generations of AI chips are released frequently, every 12 to 18 months, bringing significant leaps in computational power, efficiency, and new features.

Meta's studies, for example, have shown significant GPU failures during the training of large models like Llama 3, with an estimated annualized failure rate of around 9%, potentially reaching 27% over three years for H100 GPUs. These chips consume a lot of power (700W for H100s, over 1000W for future chips) and generate intense heat, putting immense stress on the hardware.

------------

**Real Estate Espresso Podcast:**
 Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)  
 iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)  
 Website: [www.victorjm.com](http://www.victorjm.com)  
 LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)  
 YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)  
 Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)  
 Email: [[email protected]](mailto:[email protected])  
**Y Street Capital:**
 Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)  
 Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)  
 Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are talking about changes in lending policies and how these are affecting commercial real estate loans. 

But first. I’d like to give the listeners to the podcast the opportunity to be among the first to get visibility of an exciting new project that will form part of our industrial portfolio. The project is located on a 21 acre parcel in Bradenton Florida. This is an area that has an acute shortage of property that is even zoned for industrial uses. The project is not open yet for investment. This is an opportunity for interested parties to learn more about the project. If you are interested in learning more, send an email to [email protected] and put the word industrial in the subject line. We will get some information over to you shortly. That’s [email protected]. This is not a solicitation for investment, and any investment would be by prospectus only, limited to accredited investors residing in the US in compliance with SEC regulations.

On today’s show we are talking about changes in lending policies and how these are affecting commercial real estate loans. 

When a lender or an agency issues and update to a lending policy , it is worth paying attention to the details of the new policy. Chances are, it will either make it easier to get the loan you need or perhaps make it impossible. 

We have seen both situations in recent months. We’re going to give several examples on today’s show. 

---------------

**Real Estate Espresso Podcast:**
 Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)  
 iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)  
 Website: [www.victorjm.com](http://www.victorjm.com)  
 LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)  
 YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)  
 Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)  
 Email: [[email protected]](mailto:[email protected])  
**Y Street Capital:**
 Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)  
 Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)  
 Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)