CrowdStreet’s Ian Formigle is joined by Townsend Baldwin, a 16x CrowdStreet Marketplace investor, to talk about the overall state of the market, the impact of the federal stimulus package, and how Townsend’s overall investing strategy may change going forward.

Comments:

Howard Martin Mintz |

I think Townsend is a smart guy.

I typically avoid class A apartments. I have two reasons:
1. Excessive inventory of class A apartments (developers have a difficult time making the numbers work building class B),
2. Struggling A class tenant might move to a class B apartment when financially stressed.

In regards to office buildings, I believe that the reduction in persons in these buildings because of telecommuting will be offset by the need for social distancing. People want the social interaction of a workplace. Being face to face with other workers allows for improved communication and the sharing of ideas. I foresee tenants increasing the allotted space for each worker. Co-working is going to die. Nobody wants to be rubbing elbows with strangers. Some accounting firms are going to have to migrate from work spaces to small offices to be able to attract the best talent.

This event will cause a pause in rental incoming flowing to investors lasting 3-6 months. I own a small portfolio of single family properties, 5 units without debt. Every tenant paid on time!

Retail was already on its death bed, hard to imagine what retailers besides Target, Costco, Walmart, and Sam’s surviving. However, upper income persons want quality clothing, furniture, etc. This will lead to the rebirth of specialty retailing. LBO of retail companies should be prohibited in the future. This is the path to debt destruction.

Distribution centers are well positioned along with manufactured housing facilities.

Lastly, I foresee a re-purposing of hotels to apartment complexes because of excessive inventory and need for fast sales.

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