Many of you signed up for this newsletter expecting to learn about deals at a more rapid pace, and I regret to say that while we will be purchasing more in 2023 than 2022 (which was nothing at all), it will be at a far slower pace than just about anyone wants.
The gap between bid and ask has never been larger.
And yet… I finally smell the faintest amount of blood in the water.
While pricing expectations are creeping downwards at a snail’s pace, market bid is falling off a cliff.
Personally, it feels strange. I could hear the music winding down for 15 months, for a while I thought I was tone-deaf. Maybe everyone else is right, maybe this is just the melody… but today I can say that the music has finally stopped. We’re past the inflection point and the CRE market has finished its 10 year bull run and is swinging, slowly, in the reverse direction.
If the fed holds steady the rest of 2023, the silver tsunami of baby-boomer sellers will eventually meet the market late 2023 - mid 2023 and our patience will be very well rewarded. If they hold steady well into 2024 then the upcoming balloon defaults will present truly generational buying opportunities. As long as the fed does not back down too soon, at worst we will be cruising and at best we will be grave dancing.
The magnitude of the reversal is hard to tell, but I can say that the pace will be slower than the run up. We will see, we'll keep grinding away searching for deals, and I'll keep you all up-to-date on what's happening on the ground. That’s all I have to report today.
Oh, that and we are under contract and have finished financial and site due-diligence on a beautiful, 22k NRSF climate and drive up property in a great market for an insanely good price. Our debt sucks, but our price is so good it doesn’t matter.
If you are an accredited investor, I would love to get introduced. If the winds keep blowing in this direction, we should have plenty of opportunities coming down the pipeline. And not only in self-storage :)
Thank you all for your patience, and I hope to send out more great opportunities Q2-4 than I have been able to these last 15 months!
Please share your thoughts and feedback, don’t hesitate to reach out!
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