Real Assets Adviser

February 1, 2022: Vol. 9, Number 2

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From the Current Issue

Five trends that shaped real estate during 2021

From the start, it was clear that 2021 would not be like other years in recent memory. But exactly how the year unfolded wasn’t completely as imagined, either. That’s the word from a recent JLL report about the biggest trends that shaped real estate during 2021. In essence, hybrid work moved firmly into the mainstream at a pace quicker than some anticipated (or even hoped).

VC firms facing a raft of nontraditional competition

Traditional venture capital firms have never faced more competition, a dynamic that has given rise to hastier and pricier deals that are frequently led by non-venture investors. Against this backdrop, private equity firms have ramped up their exposure to startups and are participating in more than half of all U.S. venture capital deals by value, up from 36.9 percent just two years ago. Growth-focused firms Insight Partners, General Atlantic and OrbiMed are among the most active leaders of this recent wave.

Infrastructure fundraising report: Q3/2021 capital flow is 41% higher than Q3/2020

Following a significant uptick in the second quarter, private equity infrastructure fundraising activity fell back to a more normal level in Q3/2021, according to the i3 fundraising database. Despite trailing Q2/2021, the third quarter still came in well ahead of Q3/2020. By the end of Q3/2021, 12 funds had raised more than $22.5 billion in equity capital. This is about 37 percent less than the $35.6 billion raised through 16 fund closings in the second quarter, but 41 percent more than the $15.9 billion raised a year ago in Q3/2020.

Talking Points: Quotations from people in the news

Matthew Ball, venture capitalist, on the metaverse: “We’re in a world where people several times per day send out an image reflecting themselves. The next phase takes that visual representation and dimensionalizes it. You go into an environment and express yourself through an avatar.”

What’s next for retail: Unwrapping changing expectations for the shopping experience

Experiential retail was all the rage heading into 2020. As the retail sector continues to gain momentum in its recovery, are consumers and landlords ready to pick up where they left off prior to the COVID-19 pandemic? The simple answer is “yes.” Strategies across discretionary retail assets, such as malls and lifestyle centers, that focused on increasing food and beverage offerings, entertainment, placemaking, and densification are still very much in play today. The broader answer is a bit more complicated because the “retail experience” is ever changing and means different things to different people.

Prepare for the invasion of smart building technologies following COVID-19

The past two years were a busy time for real estate professionals. While commercial buildings like office towers, shopping malls and hotels stood empty for months in a row as a result of the COVID-19 pandemic, building owners and their corporate tenants were pondering how to bring people back to their properties. Technology plays a big role in these plans.

5 Questions: Building cities to create opportunities for all

As far back as the early 1980s when much of the industry was prioritizing suburban development, Jonathan Rose, founder and president of New York-based Jonathan Rose Cos., proposed mixed-use, mixed-income, green transit-oriented urban development. His 2017 book, The Well-Tempered City: What Modern Science, Ancient Civilizations, and Human Nature Teach Us About the Future of Urban Life, has informed urban planning thinking from Sao Paolo to Bhutan, where he is helping to guide the nation’s regional and urban planning.

Planning your departure from a broker/dealer

If you’re planning to transition away from your current broker/dealer, it’s imperative to take a knowledgeable and cautious approach to communicating with your clients. Naturally, you will want to retain as many clients as you can, and it might feel counterintuitive to refrain from speaking to them about the impending transition ahead of time. However, any mention of your upcoming move, including even a veiled hint, could have significant consequences.

Social commerce — the next wave in online shopping

In 1994, the first online retail transaction involved a Sting CD that cost $12.48 plus shipping. That transaction catalyzed the global ecommerce market, which since has scaled to around 19 percent of global retail sales, or $4.9 trillion. During the past year, the COVID crisis accelerated the shift from brick-and-mortar retail to online shopping, a shift that surveys suggest will be sustained.

2021 crypto highlight and five predictions for 2022

2021 was a huge year for crypto adoption and breakthroughs, and this momentum is expected to continue through 2022. Here we take a look at five of the biggest stories in the crypto sphere for 2021 and predictions for what the biggest stories in the space are likely to be during 2022.

Profile: Dave Butler, co-CEO of Dimensional Fund Advisors

During the Boston Celtics heyday, the team’s legendary coach and general manager Red Auerbach would ignite and start puffing on a victory cigar after it became apparent his team would, yet again, come out on top. One could easily imagine that in 1987, when 6-foot-9 UC Berkeley basketball star Dave Butler received word that Auerbach had drafted him to play for the NBA dynasty franchise, he might have also put a match to cigar in Auerbach’s honor, and as a display of his adulation at becoming one of only about 250 athletes in the entire nation good enough to play NBA basketball. Alas, before Butler could don the Celtics’ green and white uniform, the NBA players and owners found themselves at loggerheads about financial compensation, and the players went on strike.

Crypto at death’s door: Some tips and considerations for bequeathing digital assets to your survivors

Cryptocurrencies remain an exciting emerging asset class. Given the high volatility and indefinite expected return, our firm does not recommend cryptocurrencies as part of an asset allocation at present. However, increasing numbers of investors hold such assets on a speculative basis — it’s certainly more exciting than the traditional lottery ticket. Even though few, if any, investors hold more than 5 percent of their wealth in cryptocurrency, the rise of how and where such assets are held has prompted the question: What happens to crypto after death?

Rethinking currency monopolies: Bitcoin could fix Turkey’s financial crisis

It’s January 2021, and the Turkish lira is near an all-time low against the U.S. dollar as President Recep Erdogan continues to implement what the Wall Street Journal calls “unconventional economic policies.” Turkish households saw the value of the national currency plunge nearly 30 percent in November alone, making everything from food to fuel significantly more expensive for already-struggling families.

Second-tier cities thriving in post-pandemic environment

Second-tier cities suffered the economic ravages of the COVID-19 pandemic just like their counterparts in large global cities. But as the virus recedes across the country, many of these smaller metropolitan areas seem to be gaining jobs and recovering more quickly than the United States as a whole, according to commercial real estate experts. There are several reasons.

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