Brookfield Asset Management (BAM), one of the world’s largest alternative investment management companies, is bullish on commercial real estate (CRE). Very, very bullish.
CEO Connor Teskey believes there’s much more potential here than people realize – and at very nice prices. As such, the firm plans to get in on $20 billion worth of CRE transactions over the next two months alone.
Most of that money, he says, will go toward hospitality, housing, and logistics. But that doesn’t mean the firm is completely discounting office buildings. The way Teskey sees it, that out-of-favor category is actually experiencing a solid and rapid strengthening of its fundamental.
In fact, years of limited construction are now beginning to pay off for existing office landlords… though that recovery is mainly limited to newer, Class A buildings. Older structures aren’t necessarily seeing the same boosts.
Another rebounding real estate sector that might surprise you is retail, as I covered on Thursday. Once again, tight supply is making grocery-anchored shopping centers very attractive right now. Well-placed strip malls with well-planned main tenants – whether grocers, pharmacies, or big-box stores like Walmart – are making real money these days.
Even malls are experiencing a resurgence. Real estate investment trust (REIT) Macerich (MAC), for one, is not only remodeling its existing malls but buying up even more as it seeks to cater to Gen Z. And GGP Retail – a division of Brookfield Property Partners (BPYPP) – is doing the same with its own portfolio.
eBay says no (in no uncertain terms)
You probably did see that eBay (EBAY) rejected GameStop’s (GME) $56 billion bid. The initial offer last week created too much of a splash to completely leave investors’ minds – even in the face of inflation data, Trump’s China visit, and stock market volatility.
But considering how I wrote on the topic last week, I feel as if the follow-up is warranted.
Speaking of justified, eBay’s official response was outright blunt, telling GameStop CEO Ryan Cohen that his “proposal is neither credible nor attractive.” As for the allegations that it’s a poorly run business and needs different management to unlock its true potential, the board wrote that:
eBay is a strong, resilient business that has delivered meaningful results over the past several years. We have sharpened our strategic focus, strengthened execution, enhanced our marketplace and seller experience, and consistently returned capital to shareholders. With its differentiated global marketplace and a clear strategy, eBay’s Board is confident that the company, under its current management team, is well-positioned to continue to drive sustainable growth, execute with discipline, and deliver long-term value for our shareholders.
In other words, take that, Mr. Cohen. And don’t let the door hit you on the way out.
Jet fuel, smoke, and mirrors
Greg Raiff knows the aviation industry inside and out considering how he runs private jet services company Elevate Jet. So his interview with Fortune magazine this week was very telling.
According to him, there is no jet fuel shortage. Which means there’s no oil crisis forcing national and global airlines to cancel flights the way they are.
Far from it, he says:
Not only has demand not slowed for private aviation. Since fuel prices went up and the war started, it’s actually gone up slightly. Aviation is up this year in terms of total demand, total hours flown, [and] total volume of arrivals and departures on a global basis.
The reason why airlines are pulling flights is therefore because they want to, not because they have to.
Completely acknowledging that fuel prices have doubled since the Iran war began, Raiff pointed out how some routes have become unprofitable. And others – to places like Dubai and Riyadh, Saudi Arabia – were already unprofitable.
So airlines are taking advantage of the situation to just end them altogether, at least for now.
As for the mainstream media’s headlines saying we’re running out of jet fuel, he believes:
Those stories are largely politically driven by governmental authorities who are trying to pressure an end to the war. And [there’s] no better way to get people out than [to] tell them that they can’t get to their summer holiday.
Raiff himself doesn’t see a problem (minus higher costs, of course) for the industry until the fall. If the war runs all the way through the summer, then he expects real shortages to occur.
Until then, he’s calling bull on the narrative.
Happy SWAN Investing!
Brad Thomas
Editor, The Wide Moat Daily
The Wide Moat Show
Source: ChatGPT
There are so many ways to lose money in the markets – even when you’re committed to purchasing dividend-paying assets.
People think of income stocks as safe portfolio purchases. And they’re right… in theory. But in practice, there are still dangers you need to be aware of.
In this week’s Wide Moat Show, Nick Ward and I discuss one of the biggest dividend-stock pitfalls you need to know about, including five real-time examples to avoid.
Catch the full episode right here.
