Real Assets Adviser

January 1, 2022: Vol. 9, Number 1

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From the Current Issue

Office in the balance: The rest of this CRE story is still being written

To appreciate how significant an impact COVID-19 has had on office properties, including the pivot by companies to remote work, it’s important to first go back more than three decades to the 1986 Tax Reform Act. The TRA reintroduced many of the 1981 tax incentives meant to encourage commercial real estate investment — these incentives would later be identified as contributing factors to the overbuilding of office CRE during the first half of the 1980s. CRE professionals with gray hair and career scars from the savings and loan crisis will likely recall how that single event rippled through the economy and culminated with the Resolution Trust Corp. (RTC), a real estate finance acronym that will forever live in infamy considering its role in cleaning up after the collapse of the savings and loan industry.

Supporting natural gas is key to a cleaner world

Though renewables are seen by some as the only option for a sustainable future, investors need to recognize the realities of global energy demand and the long-term role natural gas assets will play in delivering on economic, societal and environmental goals.

Notes and Trends: EVs yielding to e-bikes

The pandemic boosted e-bike sales by 145 percent from 2019 to 2020, more than double the growth of traditional bikes. Americans bought roughly 500,000 e-bikes in 2020, compared to about 210,000 plug-in automobiles, and that uptick is expected to continue. One report has the global e-bike market growing from $32.5 billion in 2020 to $53 billion by 2025, for annual compound growth of 9.9 percent. Deloitte expects 300 million e-bikes on the world’s streets by 2023.

Interval funds by the numbers

Though interval funds are still a mystery to most retail investors — and to many advisers — the list of sponsors behind many of the funds reads like a who’s who of Wall Street: Bain Capital, Morgan Stanley and BlackRock to name just a few.

The opportunity zone and 1031 energy plays

The real estate sector has not skipped a beat as the United States continues its COVID-19 recovery. Investors in the sector remain resilient, but we are now seeing heightened cap rate compression resulting from significant investor demand coupled with narrow supply. This raises an essential question going forward: Will investors continue their discipline or are we in a bubble in the making? Now is the time to consider portfolio diversification by taking a position in energy via qualified opportunity zone (QOZ) and 1031 investments.

Staying in the driver’s seat: Investors buckle up for the transport transition

While much attention has been paid to the “energy transition,” other sectors, such as transportation, are experiencing their own transformation. With the recent passage of the historic $1 trillion infrastructure bill, which dedicates billions of dollars to roads and bridges, public transit, electric vehicles (EVs), and airports, the sector appears to have the ammunition it needs to make long-awaited strides, bringing about new opportunities for infrastructure investors.

The increasing cyberthreat to infrastructure

During the past two pandemic-disrupted years, the world grew more reliant on cybernetworks. Criminals, some of them backed by sovereign states, had time and motive on their hands. Cyberattacks ramped up significantly both in number and scope.

Anatomy of the rich: Who they are, how they got there, what they own

Heading into 2022 and a third year of living and working in a world plagued by the COVID-19 virus, it seems fitting to take stock, so to speak. Despite the death toll, rampant unemployment, shuttered businesses and emotional distress tied to the pandemic, an unforeseen phenomena occurred over the past 18 months: The rich and ultra-rich citizens of the world enjoyed an explosion in wealth. Not only did the rich get richer, their ranks swelled.

5 Questions: Companies heading back to the office

The fate of post-pandemic office space has been one of most discussed real estate topics of the past two years. One executive who has spent a great deal of time and energy contemplating whether the office has as good a future as past — as well as what it will take to bring companies and their people back to office buildings — is Gio Cordoves, western regional president of KBS.

Robotics, AI and healthcare technology — a perfect storm of capital

Past the halfway mark, 2021 is shaping up to be another record year for mergers, acquisitions and venture funding in robotics, AI and healthcare technology. Over the past six months, eight members of the ROBO Global innovation indices received takeover offers, reflecting a growing corporate urge and appetite for advanced technologies.

The office’s new frontier: Jeff Bezos and Blue Origin plan ‘space business park’

Space may be the final frontier, but it’s also the last place you would think to put a business park. Unless, of course, you’re Jeff Bezos. Although it’s far from what you might imagine a business park to be, Bezos’ Blue Origin has partnered with several aerospace interests to create the first commercial business park in space: Orbital Reef. They plan to have it up and running by the end of the 2020s, just in time to replace the soon-to-be decommissioned International Space Station (ISS).

Investing in rail: A sector on track for growth in a post-pandemic world

The global rail market is on a roll and might just add some locomotion to the infrastructure sleeves within investor portfolios. Consider that the value of the global rolling stock market exceeds $50 billion, and is projected to reach about $65 billion by 2025, driven by an increase in demand for freight and passenger transportation. (Rolling stock is locomotives and other vehicles used on a railroad.) The bulk of the growth is projected to be in Eastern Europe, Latin America and Asia, and can be attributed to the ongoing expansion of railway networks. However, European and North American markets are anticipated to continue expanding at a compound annual growth rate above GDP growth, driven by demand for more sustainable and energy-efficient modes of transport. Fueled by the underlying growth of the rolling stock market, the rail leasing market is anticipated to expand.

Profile: Jim Crowley, CEO of Pershing

Those in the business of goal setting and professional development have long extolled the power of writing your objectives on a sheet of paper and referencing them often. It is the act of documenting your ambitions that more precisely clarifies exactly what you want to achieve and helps guide daily measures toward realization of those goals. It establishes a destination and sets actions in motion.

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