The Real Estate Market Watch - current events through a real estate lens. Podcast By Dr. Adam Gower cover art

The Real Estate Market Watch - current events through a real estate lens.

The Real Estate Market Watch - current events through a real estate lens.

By: Dr. Adam Gower
Listen for free

About this listen

 A shifting economic order. Rising geopolitical risk. Capital on edge. In The Real Estate Market Watch, Dr. Adam Gower, author, academic, and commercial real estate veteran with over 40 years of experience, examines the macroeconomic signals reshaping the real estate investment landscape. This isn’t a show about deal hype or trend-chasing. It’s about what happens when confidence meets correction - and how investors and sponsors can respond with clarity, discipline, and a focus on downside protection. Each episode features candid conversations with economists, multi-cycle real estate professionals, and respected market thinkers. The aim: to make sense of fast-moving events without partisan noise or clickbait headlines - only the real implications for real estate. There’s no fixed release schedule. Episodes are published in response to market conditions, not calendars. If you're trying to navigate uncertainty with a clear-eyed, capital-first approach, this podcast is for you. Newsletter: GowerCrowd.com/subscribe Email: adam@gowercrowd.com Call: 213-761-1000Unless otherwise indicated, all images, content, designs, and recordings © 2025 GowerCrowd. All rights reserved. Economics Personal Finance
Episodes
  • Bracing for the Real Estate Bang

    Bracing for the Real Estate Bang
    Jun 10 2025
    The Looming Crisis Few Want to Confront Paul Daneshrad, CEO of StarPoint Properties and author of Money and Morons, is sounding the alarm: the United States is barreling toward a sovereign debt reckoning – and real estate professionals are not nearly prepared. Citing economists Reinhart and Rogoff, along with voices as diverse as Jamie Dimon, Jerome Powell, and Ray Dalio, Daneshrad warns that the U.S. has not only crossed the 100% debt-to-GDP threshold, widely viewed as a critical danger zone, but has kept accelerating. "We're at 120 to 140% on-balance-sheet," he notes. "If you include off-balance-sheet liabilities, we're at 300%." While the exact timing of the crisis is unknowable, Daneshrad argues that its inevitability is not. “It’s not a question of if – it’s when.” Politics, Populism, and Normalcy Bias Daneshrad is quick to dismiss the conventional partisan narrative. The deficit is no longer a left-right issue, it’s a bipartisan affliction. Both political parties, he argues, are fueling structural imbalances. Worse, the electorate, while voicing concern, refuses to vote for hard choices. This disconnect is the heart of his book’s provocative title: Money and Morons. “86% of Americans say they’re worried about the debt,” he says. “But they won’t vote for politicians willing to solve it, because that solution involves pain.” The result is what psychologists call “normalcy bias” – an instinct to ignore looming threats and retreat into the comfort of the familiar. Fixed-Rate Fortresses: Real Estate’s First Line of Defense If the debt crisis triggers hyperinflation and a spike in interest rates, as Daneshrad expects, the implications for real estate will be seismic. His response? Radical preparation. StarPoint has already begun shifting its portfolio into 20+ year fixed-rate debt and is moving toward 30-year structures. “It’s painful. It’s more expensive. But if the crisis comes in eight years, and you’ve got two years left on a 10-year loan, you’re vulnerable.” He emphasizes that this is not a fringe view. “Even Powell, whose mandate doesn’t include the deficit, felt compelled to warn the public. That’s how serious it is.” Deleveraging with Purpose Debt levels at StarPoint are also coming down – fast. The firm is targeting 40% leverage, down from a peak of 70%. They currently sit at 54%, and the journey continues. The rationale is clear: when interest rates jump from 6% to 15%, the re-pricing of real estate will be brutal. “That’s trillions in lost value,” says Daneshrad. “You have to de-risk now.” The Forgotten Asset: Cash Cash, often derided for its lack of yield in boom times, plays a central role in Daneshrad’s playbook. “The Rockefellers, Kennedys, Guggenheims – they had cash when it mattered. They bought at two cents on the dollar.” Berkshire Hathaway’s record cash holdings reinforce this strategy. “Buffett sees limited opportunity right now and high risk. That should tell you something.” Daneshrad recommends targeting cash reserves as a percentage of either AUM or annual free cash flow, steadily building them over time. "Public companies get punished for it. Private firms like ours have more flexibility and we’re using it." Why He’s Not Buying (Yet) Despite market dislocation, Daneshrad says StarPoint is mostly sitting on the sidelines. Cap rate spreads don’t justify the risk, and few deals offer the deep value he’s targeting. “We’re looking for rebound plays where sellers are on their third buyer and need certainty of close. That’s where the discounts are. But those opportunities are rare.” Asked whether the mispricing stems from short-term underwriting or optimism bias, he shrugs. “We’ve flooded the system with liquidity. Asset prices are artificially propped up.” Diversification and the Limits of Real Estate Daneshrad is not betting the farm on U.S. real estate. He’s pursuing modest geographic diversification abroad and expanding into non-real estate asset classes. “Historically, real estate hedges inflation well but a debt crisis changes everything.” He’s candid about the difficulty: “We’re not that smart. Timing a crisis is hard. But we can prepare for one.” The Aging America Conundrum One of the more nuanced points Daneshrad raises is the intersection of demography and fiscal sustainability. Aging, he agrees, is inevitable. But the care infrastructure it requires is not financially supported. “The trustees for Social Security and Medicare, not politicians, say the funds go bankrupt in under ten years. That’s $90 trillion in off-balance-sheet liabilities.” Senior housing? “A great idea if the elderly can pay. But with savings rates at historic lows, I’m not optimistic.” Market Signals That Matter Daneshrad watches for three early signs of crisis: A ...
    Show more Show less
    45 mins
  • The Crash You Won’t See Coming — Because It’s Already Started

    The Crash You Won’t See Coming — Because It’s Already Started
    Jun 5 2025
    The Real Estate Cycle: A Warning for 2026 Insights from Phil Anderson on the Coming Real Estate Market Crash In my conversation with renowned economist Phil Anderson, you will gain unprecedented insight into the mechanics of real estate cycles and why we are right on the precipice of the next major real estate market crash. Anderson, author of "The Secret Life of Real Estate and Banking," presents a compelling case that combines economic theory with historical precedent to paint a picture of where we stand today – and where we’re headed tomorrow. The Foundation: Understanding Economic Rent The Law That Economics Forgot To understand the thesis, here’s a powerful analogy: just as we accept the law of gravity dictates that a dropped pencil will fall to the ground, there exists an equally immutable economic law that has been largely forgotten. Anderson calls this the "law of economic rent" and it’s the principle that all of society's gains and benefits will ultimately gravitate toward land prices. This fundamental concept explains why we experience predictable real estate cycles. When society allows land earnings to capitalize into prices (typically representing 20 years of earnings), and banks are permitted to extend credit based on those inflated prices, a real estate cycle crash becomes inevitable. It's not a possibility – it's a mathematical certainty. The Erasure of Land from Economics Anderson reveals a crucial historical shift that occurred after World War I. Prior to 1907, economists universally recognized three factors of production: labor, capital, and land. However, as land reform movements gained momentum and threatened established interests, there was a deliberate effort to remove land from economic textbooks entirely. Today's economists learn only about labor and capital, treating land as merely another form of capital. This fundamental misunderstanding, Anderson argues, is why virtually no mainstream economists saw the 2008 financial crisis coming, nor will they recognize the signs of the coming downturn. The Cycle Mechanics: Why 18-20 Years? Historical Reliability The 18-20 year real estate cycle has been remarkably consistent throughout American history, documented back to 1800. Anderson traces this pattern through every major economic downturn: the 1920s, early 1970s, 1991, and 2008. In each case, the proximate cause wasn't what most economists claimed – it was the deflation of land prices. The current cycle began in 2012, marking the bottom of the last downturn. We are now in year 13 of the cycle, approaching the critical 14-year mark that historically signals the beginning of the end. Here’s how it works: The Anatomy of a Cycle Anderson explains that real estate cycles run like this: The cycle is 18.6 years on average - "14 years up and 4 years down" 2012 was the bottom - Land prices peaked in 2006-2007, then had approximately 4 years down to the 2012 bottom 2026 is the projected peak - As Anderson states: "14 years up from there [2012] takes you to 2026. It really is that simple." We're currently in year 13 - From 2012 bottom + 13 years = 2025, approaching the 14-year peak in 2026 Years 13-14 are the "Winner's Curse" - The final speculative phase when "animal spirits are truly unleashed." Current Position in the Cycle This precise timing explains why Anderson identifies us as being in "the last couple of years of the cycle." All the current signals he observes - housing stocks rolling over, banking deregulation beginning, frenzied speculation in Bitcoin and cryptocurrency - point to our approach toward the 2026 peak rather than suggesting we've already arrived there. The critical insight is that we're in the dangerous final speculation phase right now. We're experiencing what Anderson calls the "Winner's Curse" period of years 13-14, when speculation reaches fever pitch and "animal spirits are truly unleashed." The peak is expected in 2026, which would then trigger the inevitable 4-year down phase running from 2026-2030. This timeline explains why Anderson emphasizes the urgency of preparation - we're not looking at some distant future event, but rather a cyclical turning point that's rapidly approaching and may have already begun. Presidential Patterns: The Republican Connection A Striking Historical Correlation One of Anderson's most intriguing observations concerns presidential politics. Since Abraham Lincoln's era, every final phase of a real estate cycle has coincided with a Republican president taking office. These aren't coincidences but reflect the political dynamics that emerge during speculative bubbles. Anderson notes the historical bookend: George Washington, the first president and America's largest landowner at the time, and now Donald Trump, the 47th president and a prominent real estate developer, both representing the connection between land ownership and ...
    Show more Show less
    59 mins
  • Real Estate's Margin for Error is Gone

    Real Estate's Margin for Error is Gone
    Jun 4 2025
    The Margin of Error Has Vanished: What CRE Investors Should Be Watching Now Commentary on a conversation with John Chang, Senior Vice President and National Director, Research and Advisory Services, Marcus & Millichap The New CRE Investment Mandate: Survive First, Then Thrive “The margin of error has narrowed to virtually zero.” This was John Chang’s stark assessment of today’s commercial real estate environment – an era marked by fragile capital markets, rising Treasury yields, policy instability, and speculative hangovers from a decade of cheap money. According to Chang, the headline playbook hasn’t changed: keep leverage low, maintain reserves, underwrite for downside. But the stakes have changed. What used to be prudent is now required. Those who forget that, particularly those lulled by the long post-GFC bull run, risk extinction. Cap Rates, Treasury Yields, and the Compressed Spread A central theme of our conversation is the vanishing spread between borrowing costs and asset yields. Cap rates have risen 100–200 bps depending on asset class and geography, but Treasury rates have risen more. That’s compressed spreads, rendering most acquisitions reliant on a value-creation story or an eventual rate reversal. Investors are still transacting, says Chang, but only if they believe they can bridge the spread gap through operational improvements i.e. leasing, renovation, management upgrades. Passive cap-rate arbitrage is no longer viable. “The potential for something to go wrong is high,” Chang warns, especially in a policy environment that remains erratic. The Treasury Market’s Imminent Supply Shock Chang outlines why he expects upward pressure on Treasury yields for the balance of the year – contrary to the market's general expectations of rate cuts. Key reasons: Federal Deficits: With a delayed budget, Treasury issuance has been running below historical norms. That’s about to reverse, with $1–1.5 trillion in supply expected by October. Shrinking Buyer Base: The Fed is reducing its balance sheet. Foreign holders, especially China and Japan, are net sellers. Even traditional allies are showing less appetite, driven partly by frictions over U.S. trade policy. Trade Tensions: Tariffs of up to 145% on imports from China, EU saber-rattling, and a broad retreat from globalization are alienating the very buyers of U.S. debt. “People don’t want to do us any favors right now,” Chang says. “That uncertainty alone elevates risk premiums.” Normalcy Bias and the Myth of the Perpetual Up Cycle Chang pulls no punches on the market psychology underpinning risky underwriting in recent years. He describes a bifurcated investor landscape: Those who entered post-GFC and think 2–3% interest rates and infinite rent growth are normal. Veterans of the 1990s S&L crisis, the dot-com bust, or the GFC, who know better. What’s striking is the lack of long-term data. Even Marcus & Millichap, he notes, only has robust CRE data going back to 2000. Without context, many have mistaken the tailwind-fueled 2010s as a standard baseline. “We’re back to old-world real estate,” Chang says. “Where you have to actually understand the property, the tenant mix, the microeconomics of location. The era of pure financial engineering is over.” Lessons from the Pandemic and GFC: Underwrite for Downside, Not for Hype Chang recounts closing on an investment in April 2020 at the very onset of pandemic uncertainty. “What if we rent at breakeven?” he asked. If the answer was yes, he proceeded. That conservative approach worked then and still applies today. The biggest blow-ups, he says, came from sponsors who: Modeled double-digit rent growth. Over-leveraged. Used floating-rate debt without hedges. Ignored capex and reserves. By contrast, Chang praises sponsors who locked in fixed debt, kept leverage under 65%, and stayed humble. “They’re embarrassed to be earning 7% IRRs,” he jokes, “but in this climate, that’s a win.” Washout in the Syndication Space: Good Riddance? Perhaps most damning is Chang’s commentary on the wave of underqualified syndicators who entered during the boom years. “Thousands came in with no operating experience,” he says, pointing to the proliferation of coaching programs offering checklists instead of expertise. These new entrants mimicked industry language – AUM figures, fund manager titles – but often had no institutional track record or risk management skills. Many of them, Chang believes, are now out or on their way out. And while some may return with hard-earned wisdom, he expects the flow of “tourists” into the syndication world to dry up for the foreseeable future. Tailwinds Still Exist: But Only for the Well-Prepared Despite the short-term risks, Chang sees multiple long-term tailwinds: Demographics: Millennials are delaying homeownership, renting ...
    Show more Show less
    59 mins
adbl_web_global_use_to_activate_webcro805_stickypopup
All stars
Most relevant  
Good insights to terms for investors. Found out about south and tax free states. I’ll listen again!
Cheers

Comprehensive

Something went wrong. Please try again in a few minutes.