Real Estate Blog

Follow the Money--Where Wealth is Heading


‘Family Office’ Investors Focusing More on Real Estate

As a possible economic slowdown looms, the people who invest money for ultra-rich families are buying more real estate as a hedge against any possible downturn. 

NEW YORK – Adjusting to market volatility and girding for a recession, some family offices (investment firms that work for extremely high-worth families) in the U.S. are hedging their bets by shrinking their exposure to hedge funds and boosting their exposure to real estate.

That’s one of the key findings of a recently released 2019 report on family offices compiled by UBS and Campden Wealth Research. Principals and executives at 360 family offices around the world were questioned for the report, with one-third of them based in the United States. Nearly three-fourths of the family offices surveyed invest in real estate.

Globally, the report says, real estate experienced the biggest lift in portfolio allocations for family offices, accounting for an average of 17% of the pie. Meanwhile, family offices around the world trimmed their investments in hedge funds, bringing the total portfolio share down to an average of 4.5%, according to the report.

“We have been getting out of equities and putting money into bonds and real estate. We are also putting money aside to make purchases if there is a crash,” an unidentified family member of a single-family office in North America told the UBS and Campden researchers.

Close to one-fifth of family offices in North America will likely raise their real estate allocations on a net basis in 2020, forecasts Rebecca Gooch, director of research at Campden Wealth. She notes that direct investment in real estate represents 14% of the average portfolio of a North American family office. Real estate generated an average return of 11% for family offices in North America, the report shows. Among North America-based family offices, commercial real estate made up 56% of real estate investments and residential constituted 44%.

Falling out of favor among some family offices are hedge funds, with an average portfolio allocation of 6% among North American family offices, according to the UBS-Campden Wealth report.

“Family offices have doubts about hedge funds’ ability to protect wealth during economic downturns, and they dislike what some deem to be relatively high fees when compared to performance,” the researchers wrote.

Raphael Sidelsky, chief investment officer at W5 Group LLC, a single-family office with investment teams in New York City, Miami and Switzerland, says that within the real estate sector, his firm is focusing on co-living spaces and micro-apartments to capitalize on the rise of the “shared economy,” as well as the lack of supply versus pent-up demand.

Last year, W5 Group took a minority stake in German co-living operator Quarters, which recently embarked on a $300 million expansion in the United States. Over the next three years, W5 Group and Medici Living Group, the parent of Quarters, plan to develop 1,300 co-living units across the country. In conjunction with the Medici Living Groupjoint venture, W5 Group said in September that it bought a majority interest in The Highline at Union Market, a 315,000-sq.-ft., mixed-use project in Washington, D.C. where one-third of the residential units will be Quarters co-living apartments.

“Real estate sits between bonds and equities in the risk-return spectrum and should be an element of all well-constructed portfolios,” Sidelsky says. “High-quality real estate in a sector with strong demand, without excess supply that is not over-leveraged, can withstand an economic downturn well and then provide upside during a recovery.”

“We have a long-term investment mindset and are hands-on investors, so direct deals where we control our destiny are paramount,” he adds.

There seems to be a trend of family offices shifting away from investing in real estate funds and switch toward making direct investments or co-investments in real estate, says Scott Kapp, a partner with law firm DLA Piper whose clients include family offices.

“In the past, family offices may have only invested through a fund or a fund of funds,” Kapp says. “Today, there is significant interest in direct deals and co-investment, as family offices have sought to reduce fees paid to increase their overall risk-adjusted returns and to have greater control over their investments.”

While family offices tend to concentrate on real estate verticals such as industrial, multifamily and office, some are taking greater risks in hopes of achieving higher returns through investment in retail properties, Kapp notes.

For his part, Phil Marra, U.S. real estate funds leader at professional services firm KPMG LLP, says family offices are chasing core or core-plus real estate investments that can produce good cash flow while simultaneously being able to ride out a recession, but they’re also hunting for opportunistic investments that can deliver enticing returns. Preferred real estate sectors for family offices include logistics and warehousing, data centers and multifamily, he says.

Fretting about “catching the falling knife” as this real estate cycle winds down, family offices generally are embracing lower risk investment strategies, Marra says. As such, the beleaguered retail sector largely remains on the sidelines for family offices, except for grocery-anchored centers, according to Marra.

“Retail developers and operators haven’t found the right mix yet to intrigue investors to come back into that marketplace,” he says. “That’s going to continue until we see a recession and then see prices drop where there could be enough price depreciation that’ll allow people to enter that market.”

Marra characterizes family offices as “smart money” investors who are proceeding cautiously as the current real estate cycle wanes.

“We are seeing family offices want to do more deals,” he says. “But in those deals, they want to have more control over the selection and the operation, given the timing of this market. They want to make sure that they don’t make a mistake and overextend in a particular market or product type.”

© 2019 Penton Media, John Egan

National and Local Real Estate Services



While we only practice real estate here locally, we have referred clients and friends to the best agents in local markets in Texas, California, South Carolina, North Carolina, Arizona, Nevada, and more.  Finding the best agent for the community, property, and client is not the easiest of things, and is rarely the "big name" in the market.  This free service we provide is part of our Private Client Services blueprint.  Ask us to help you with your next out of area transaction.  We are happy to help!

August 2019 Newsletter - Florida is BOOMING and Truckee Heads to College




Most of you know that Karla and I raise puppies for Canine Companions for Independence, the nationally recognized standard of service dog organizations.  Canine Companions provides service dogs for:

Adults- Adults with disabilities are partnered with service or hearing dogs to increase independence.

Children - Assistance dogs perform physical tasks for children with a range of disabilities to increase independence with support from an adult.

Veterans- Wounded veterans and veterans with disabilities are matched with assistance dogs for greater independence.

Professionals - Assistance dogs are expertly trained and partnered with a working professional in a health care, visitation, criminal justice or education setting.

It takes nearly two and a half years for a dog to go through the entire process, one that is so exacting that only 55% of them graduate,  It is estimated that it costs $50,000 to breed, raise, train, place, and provide follow up services for each one of them, and all of these dogs are provided at no cost to the recipient. 

We've raised Truckee for the last 21 months and created the video above to display the skills he's learned while in our care.  Check out Truckee's 30 Command Challenge and enjoy!  He heads off for 6-9 months of professional training on August 9th.  Good luck little buddy! 

To learn more about Canine Companions, visit them on the web at



TALLAHASSEE, Fla. – Florida will continue growing by more than 300,000 people a year and will top 22 million residents in 2022, according to a report posted online this week by state economists.

The Demographic Estimating Conference updated population forecasts through April 1, 2024 and showed steady growth during the multi-year period.

“Between April 1, 2018 and April 1, 2024, population growth is expected to average 330,605 net new residents per year (906 per day), representing a compound growth rate of 1.53% over this six-year time horizon,” an executive summary of the report said. “These increases are analogous to adding a city slightly larger than Orlando every year.”

The report estimated the population on April 1, 2018, at 20.84 million, with an increase to 21.2 million on April 1, 2019. It’s forecast to hit 22.2 million as of April 1, 2022 and 22.8 million on April 1, 2024.

The population increases will primarily stem from “net migration” as people move into the state, rather than births, which are largely offset by deaths.

The report noted that the state’s forecasts are actually lower than population predictions by the U.S. Census Bureau, saying they use different methodologies in reaching their estimates.

Assignment of Benefits Reform Credited with Reduced Rate Hike Request in Florida


Citizens Insurance Lowers Rate Hike Request, Cites AOB Reform

The Florida-owned insurer advanced a plan to lower a proposed average residential premium increase from 8.2% to 4.7% and sent it to its oversight board for approval.

TALLAHASSEE, Fla. – Citizens Property Insurance is scaling back a proposed rate hike after lawmakers and Gov. Ron DeSantis approved an overhaul that the state-backed insurer has long pursued.

Members of Citizens’ Actuarial and Underwriting Committee advanced a plan Tuesday to the full Board of Governors to lower a proposed average residential premium increase from 8.2% to 4.7%.

The 8.2% increase was approved in December but has not taken effect.

The reduction in the overall hike is possible, according to Citizens officials, following passage of a new law (HB 7065) that overhauled the controversial practice known as assignment of benefits (AOB), which involves policyholders signing over insurance claims to contractors.

The initial rate hike was approved with members blaming water-damage claims and related litigation, particularly in Miami-Dade, Broward and Palm Beach counties, for driving up costs in the broader property-insurance market.

In AOB, property owners in need of repairs sign over benefits to contractors, who ultimately pursue payments from insurance companies. While insurers contend the practice has become riddled with fraud and litigation, plaintiffs’ attorneys and other groups say AOB helps make sure claims are properly paid. They accuse insurers of often trying to low-ball amounts paid for work.

Passage of the bill was a victory for insurers. The changes include limits on attorney fees in AOB lawsuits. Also, the bill lets insurers offer policies that do not allow or restrict assignment of benefits.

Citizens Board of Governors member William Kastroll warned Tuesday during the committee meeting in Maitland that the changes will result in an increase in Citizens policy counts, “as other insurance companies out there are taking larger rate increases than this.”

However, Citizens President and CEO Barry Gilway disagreed, though he acknowledged that most private insurers will wait to see the impact of the legislation, which fully takes effect July 1, before adjusting their rates.

“The private market is in a very different position. They, without question, will wait and determine what impact AOB legislation is having on the litigation rates, and they will subsequently file increases that reflect the actual experience,” Gilway said. “Citizens is actually estimating their experience upfront, whereas the private market will most likely delay an increase until they can show real progress relative to the reduced litigation.”

The new law will also require insurers to start providing annual data on claims and settlement timeframes starting in 2022, so the state can see how the bill is working.

Citizens’ planned rate increase still needs approval from the state Office of Insurance Regulation. If approved, the hikes would begin in September and fully take effect over the following year as policies renew. Citizens has about 420,000 policies.

The average hike would hit “personal lines” policyholders, including owners of single-family homes, owners of condominiums and renters – though increases would vary across the state depending on factors such as location.

Some 67,000 residential policy holders, just over 15% of the overall policies, won’t see increases. Commercial policies face an average 8.9% increase, unchanged from December.

Source: News Service of Florida, Jim Turner

Ragtime Tavern Happy Hour...All Day Every Day!


Ragtime Tavern Savings No Coupon Required

Ragtime Tavern is an institution in the Atlantic Beach and Neptune Beach Town Center.  Easily the largest restaurant and bar, it features live music, and three different venues within the facility to lounge, laugh, eat and drink.  Locals call it "The Corner", as it sits on the corner of Atlantic and Ocean, one block from the beach.

If you are like me, you like to get out with friends and have a good time, and also look for deals and ways to do so while saving money.  Now, when I go to Ragtime, I save on every purchase, every day, up to 27% off the entire bill, no matter what time of day or what you order.  Well, this is among the easiest and best deals I've found to save money at a restaurant, and it never requires coupon clipping or getting the server to enter a membership number or anything like that.  Your savings happens automatically!

There are a few easy steps to get started with your own personal Ragtime "Happy Hour", but once you set things up, you just set it and forget it.

Step 1)  Many of you may already participate in what is called the Rewards Network, more commonly known to give airline miles when dining at restaurants who participate in the program.  My favorite flavor of this program is at as it offers 5% cash back for dining.  It takes a LONG time to get enough miles for quality reward airline tickets, but after just $20 in earnings from idine, you get a debit card in the mail good to use as you like, and not just for dining!  Use it at the grocery store, hair salon, or anywhere American Express cards are welcome.  Register the Visa card you like to use most for dining.

Step 2)  Log in to your Uber app.  Swipe up from the bottom of your screen, and you will see the option to instantly join the Visa Rewards network.  You need at least one Visa card linked to your Uber account to have this option appear.  Go ahead, add your Visa, then wait 5 minutes and try again, it should appear when you swipe up.  PRO TIP:  Make sure to register the Visa card you typically earn the most with when dining, as this is the card you must use to get the Uber cash back at Ragtime Tavern.  Yes, this credit will go in to your Uber account and can be used toward your next ride.  Uber Visa Rewards Savings 7%.

Step 3)  Register for Dosh.  Dosh is an app that gives cash back for everyday purchases, so you should expect to get some bonus bucks at other places not named Ragtime.  If you use this link, you'll get a $5 bonus and I will get a $5 bonus as a thank you for referring you to the app. $5 Dosh Link  Once you download the app, register the same card you did for iDine and Uber.  Dosh savings at Ragtime 5%

Step 4)  Register for the Pei app.  Just like Dosh, it is a card linked program that delivers cash back at store locations around the country.  Just like with Dosh, my link will give you $5 for registering, and I'll receive a $5 bonus as a thank you but you need to enter my referral code "v3as6a" for it to work.  $5 Pei Link  The GREAT thing about Pei, is that it offers between 5-10% back at Ragtime Tavern.  When I looked right now, it was offering 10% on your entire bill!  Pei App savings at Ragtime 5-10%.  Pei is great as it also offers cashback at Wallgreens and CVS on anything you purchase, so there will be bonus bucks in your account and you won't need to do anything more!  A little hack I use at CVS is to pay my health insurance bill there.  CVS and Pei gives me a $5 cashback bonus when doing so.  

Savings Summary:  5% iDine cash, 5% Dosh cash, 5-10% Pei cash and 7% Uber cash = up to 27% cash back on on every purchase, every day!  It is like always have a secret happy hour any time you want! 

Regarding cashing out of the different programs, I just log in to my apps a few times per year and send the accumulated cash I have to my paypal account.  It is easy and seamless.  iDine just sends you a debit card when you hit the $20 mark, and Uber cash is super easy to use in app as a form of payment on your next ride.

Now that you have done the background work, you don't need to do anything else except enjoy yourself and your new free cash back during your next visit to The Corner.  Enjoy!

Are we in 2019 housing bubble?


Experts: Can’t have a bubble with under-supply of homes


NEW YORK – Feb. 15, 2019 – Some housing experts argue that the housing market isn't heading toward another bust – it's still feeling the impact of the last one.

Instead of an oversupply of homes, they stress that not enough homes are being built, and that's pushing prices up to levels that exclude many Americans from homeownership.

"We are underhoused," says Zillow senior economist Aaron Terrazas.

Among other things, the home shortage is aggravated by low unemployment, which is making it hard to hire construction workers, and not-in-my-backyard zoning rules exacerbate the issue of an already small pool of construction-ready lots.

Tight supply and a subsequent boost in home prices have made homeownership out of reach in some cities, like Manhattan, where the median condo price has hit about $1 million. Even outside of the United States, there has not been much speculative building, says UBS Global Wealth Management's Jonathan Woloshin.

"Nobody asked the question back during the bubble, 'What would happen if prices went down?'" Woloshin says. "Better questions are being asked today."

Dangerous practices like no-documentation loans have been ended through tighter regulation, making it harder for people to buy houses. However, only 1 percent of lenders surveyed recently by Fannie Mae blamed tight standards for credit and underwriting for the weakness in sales – 48 percent cited "insufficient supply."

Source: Bloomberg BusinessWeek (02/11/19) Coy, Peter

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