We have been active investors in real estate for the past 35 years. Today, real estate is a rapidly changing asset class moving from "illiquid" to "liquid" with tokenization and crowdfunding, and from "static" to "dynamic" with the blending of co-living and co-working. Furthermore, a growing share of value creation in commercial real estate is now being driven by amenities and first floor solutions. Now we are entering the age of dark fiber and last mile fiber build out analogous to the build out of the highway system in the 1950's. Only instead of cars, it is information moving down the "highway."
We are opportunistic in both investment type and team in order to leverage and execute in the most advantageous manner. Additionally, we have been advisors to qualified opportunity zone funds (QOZ), exploring opportunities in affordable housing solutions, as well as researching ways to play the evolution of "one place" (the secular change from Howard Schultz Starbux as "third place" to now one building, one community (Bertrand Goldberg 2.0), providing all needs and services.) Last, and we would be remiss, if we didn't mention our belief that we have seen a multi decade secular change in interest rates from "always lower" to higher (albeit cyclical counter trends along the way). IF that is a correct assessment then the game of investing in real estate, where cap rates are the primary determinant of success, will be a never ending battle in the "go forward."
Select Real Estate Investments and Solutions
Railway Exchange Building - Chicago, IL
The National Chicago - Chicago, IL
Railway Exchange Building - Chicago, IL
Sunset Village Apartments - Northfield, IL
The New Highways
Fiber is the new “real estate.” Just as assetless models like Airbnb, Uber and the like garner more interest and traction in users and investors, is it possible that the next big growth area in real estate isn’t the traditional asset of a building but the fiber into that building or home? Just as highways - and their respective exits - built out in the 1950’s and 1960’s remade America, it is our opinion we are at the dawning of a new era where dark fiber routes and last mile fiber addressing the ever increasing demands of “on now” and a Web 3.0/ChatGPT world, as well as how we "consume" content, are the valuable assets that generate cash flow more immune to economic cycles and rapid changes in “workplace” and/or interest rates. Real estate has many variables and opportunities to moments in time and just as we were active in allocating to distressed real estate 2010-2014 we are now active in sourcing fiber investment opportunities as well as once again, in 2024, active in CRE distressed opportunities. Tailwinds are preferable to headwinds!
Our first activity in our new real estate thesis of #fiber was forming an SPV investing in half the equity, alongside two family offices, of gixfiber.com which, now completed, is the Southernmost diverse Hudson River crossing with state of the art optical data transport equipment and newly manufactured high capacity optical fiber. This crossing will provide the lowest latency to key colocation facilities, telecom and financial companies in and around Northern New Jersey and lower Manhattan.
Furthermore, we are spending research time and investing in public plays (i.e. BOC) on fiber build out as well as “kicking tires” on other future private investment opportunities fitting to the thesis.
Real Estate & Interest Rate Insights
Yamada, Louise 2023, "Structural Interest Rate Reversal Finally Underway."
lyadvisors.com, accessed 30 January 2024, <https://lyadvisors.com/CurrentWritings/Structural-Interest-Rate-Reversal-Finally-Underway-April-2023.pdf>
Louise Yamada Technical Research Advisors, LLC