Today and all this week we are talking about business planning. Within our company we have a regular heartbeat for business planning. We meet annually, quarterly and weekly to work on the business plan. The annual meeting is two full days. The quarterly meeting is a single day and our weekly meeting is held on a Friday afternoon and usually last 90 minutes. That’s separate and apart from our daily staff meeting where we review projects and action items.  In the annual plan we construct the revenue plan for the year. This is made up of the same three elements that form the 3 year and the 10 year plan.  ------------- Host: Victor Menasce email: [email protected]

On today show this is the second in our series on business planning. Yesterday we spoke about our company’s mission and how we review and reaffirm the company mission every year when we undertake our annual planning cycle. From the company mission, we established the three-year and 10 year goals for the company. This is the long range outlook for the company’s revenue, profitability, cash flow, assets under management and net worth. This is an essential part of the planning process.  As a real estate development company, we make money by doing taking projects through their life cycle. I’m often asked how we find our deals. The truth is, I have no idea how to hunt for deals. We don’t hunt for deals and we never have. All of our deals have come to us. It’s a matter of positioning ourselves appropriately in the market so that deals come to us. Part of that involves having the business structure that attracts opportunity.  When we plan for the long term, it’s about considering the various sources of income for the sustainability of the business.  Money is generated in three different ways. There is earned income, residual income, and then capital gains. In the context of real estate, earned income comes in the form of fees earned by the consulting division of the company, and development fees from our own in-house projects. These fees don’t exists to create wealth for us as partners, they exist to create consistency and sustainability for the business. The second form of income is residual income. This is usually cash flow from operations and from rental properties whether they are residential or commercial. Residual income is fairly predictable once a project is stabilized and running on auto-pilot with permanent financing. Even then, the cash flow represents the knife edge of the profit margin. If the investors have a preferred return, the profit to the sponsors can be variable depending on how rents, vacancies and expenses unfold in the future. The third form of income is capital gains and results from transactions. The timing of these transactions is difficult to predict. The financial results are usually great when these transactions occur and the company and investors both get to reap the benefits when these large paydays happen. But if you have employees who expect to be paid every month, then it is difficult to make payroll if a transaction gets delayed. These delays are often the result of changes by the buyer. Sometimes these transactions are delayed by administrative delays at the city. Whatever the reason, a sustainable business needs to have enough of the first two forms of revenue in order to maintain stability. -------------- Host: Victor Menasce

Today and every day this week we are going to talk about the business planning process. Every year, every quarter and every week the leadership team works on the plan and the execution of the plan for the business.  It starts with an annual meeting that is usually held in the 4th quarter of the calendar year to prepare for the upcoming year. This year for a variety of scheduling reasons we held this part of the process in the first week of January.  The annual planning cycle is used to reaffirm the goals for the year in the context of the three year plan and the ten year plan for the business.  We revisit the mission of the business and either reaffirm the mission or change it. So far we have not changed it. Our mission is create communities that people feel compelled to call home.  Beyond a bunch of flowery language, the mission is really about helping guide which projects we want to undertake, and more importantly, how we want to undertake them. We have so many opportunities to fulfill that mission. When we are designing a residential subdivision, we have a choice. We can simply cram in as many units as the zoning will allow, maximize density and move on to the next. Or we can be thoughtful in the design of the subdivision and remember that people will choose to live here. 

Justin Greenleaf is the principal at Greenleaf Architects based in New Orleans, Louisiana. His firm is active in designs across the South from Texas to Florida. On today's show we are talking about designing in the face of changing energy codes. To connect with Justin, visit greenleafarchitects.com --------------- Host: Victor Menasce email: [email protected]

Steve Suh is a practicing ophthalmologist in the Columbus Ohio market. He is also a principal at Left Field Investors, an investment club that helps educate passive investors on what makes for a good investment. He is also the author of a book: "Avoiding Rookie Errors As A Left Field Investor: 20 Lessons Learned From 14 Years Of PassIve Investing In Private Syndications". You can connect with Steve at LeftFieldInvestors.com -------------- Host: Victor Menasce email: [email protected]

This week we are doing a mini series on value engineering, this is the process of saving money in a project, without necessarily degrading the project in terms of quality or functionality.  On yesterday’s show we talked about one value engineering optimization. We spoke about how to save money in the construction of floor systems in wood frame construction.  On today’s show we are examining one example of an additional cost that is being driven by new energy codes that are permeating the building code across North America.  There is no doubt that improvements in insulation will reduce energy consumption in a building.  The energy code in many jurisdictions is also looking to accomplish greater insulation. But in some cases, the code is prescriptive in the manner which this is accomplished. The code is prescribing  continuous rigid foam board insulation be attached outside the sheathing. Typically this extra 1” of insulation will give an extra R5, or 2” of insulation contributes an addition R10 of insulation on top of the insulation that is within the wall cavity. The rigid continuous insulation adds nearly $2.80 per SF to the exterior cost of the building. Can you accomplish the same performance more efficiently? Listen and find out. ------------- Host: Victor Menasce email: [email protected]

On today’s show we are talking about value engineering. This episode came from a conversation that we were having internally on one of our projects. The thought process comes down to evaluating multiple ways of accomplishing the same outcome before you know which optimizations make the most sense.  ----------------- Host: Victor Menasce email: [email protected]

Monday was the opening day of the World Economic Forum in Davos Switzerland. This annual five day event hosts many of the world’s leaders and business elite.  The WEF has earned a bit of a reputation for being somewhat prescriptive with the idea that somehow these global elites have some special right to say what is good for you and I. But if you’re willing to put that and some of the political narratives aside, there are some interesting insights to be gleaned from the WEF.  The content on the WEF website is curated in a highly sanitized way. It’s very polished and packaged. Nevertheless, there may be some insights to be gained in understanding our global economy.  The global outlook for jobs varies widely between developed economies and developing economies. In South Africa, for example, the formal unemployment rate has climbed to 30%, five percentage points higher than it was pre-pandemic. One talk focused on the global outlook for jobs specifically related to the disruption from AI. There is an expectation of 23% churn in the global job market as a result of AI in the next four years. 44% of core skills are going to be affected as a result of AI even in those jobs that are not displaced by AI.  As real estate investors, we need to understand the impact of these shifts. -------------- Host: Victor Menasce email: [email protected]

Every year the Consumer Electronics Show happens in Las Vegas in early January. I used to attend this show every year when I was in the tech industry. Today, I don’t attend in person, but I do follow some of the innovations that are showcased at CES.  This show is not real estate per se. But it provides a glimpse into what is happening in our world from a perspective that is not necessarily being reported in the mainstream media. Some of the sessions from CES are actually available in video format to view online from the comfort of your living room. Back when I was attending CES, none of the sessions were live streamed on the internet.  There are a few themes that are noteworthy from this year's show. Some technologies have extreme power, and with that extreme power comes extreme risk.  AI is one of those technologies. Almost all of the booths at CES this year had those two letters AI somewhere in their booth graphics.  For real estate investors, CES is a pilgrimage through the world of smart home automation and smart building systems. This is where you will get to see  For real estate investors, there are some cost saving technologies that can bring some real convenience. There are new smart locks with palm reading technology. Simply present the palm of your hand to the lock and if it matches, voila, the door is unlocked. Some of the new locks also include facial recognition technology.   Headlining some of the announcements is the notion that Home Depot is about to become a major player in smart home automation. They already have a catalog of over 150 smart home products. But they are now also coming out with their own line of smart home hub, and integrations with many of the major manufacturers, along with their own products. 

On today’s show we are taking a look at something that has been happening in the bond market during the holiday period while much of the western world has been distracted and not paying attention. Of course the mainstream media is fixated on the instability in the Middle East and rightly so. The situation in Israel, Gaza, Syria, Lebanon, Yemen, Saudi Arabia, and Iran is carries a very real risk of a larger and very serious regional conflict.  While all of this is happening, the yield curve which has been steeply inverted for much of the past two years is on the verge of becoming uninverted. When the yield curve is normal, long term rates are higher than short term rates. Intuitively, it makes sense that long term rates should be higher. The farther you look out into the future there is more uncertainty and therefore you should expect to pay a premium for that uncertainty.  Economic conditions and market conditions should be more predictable in the short term and subject to less fluctuations and therefore the interest rate you pay for money should be lower due to the lower uncertainty. That is the normal situation. Yield curve inversions are a little bit like atmospheric inversions. They can and do occur, but they are not very stable and don’t stay inverted for very long. When you have an interest rate inversion there are only two ways for the curve to uninvert. Either the long term rates rise above the short term rates, or the short term rates fall below the long term rates, or some combination of these two factors.

Today's show is a live talk held in Ottawa in mid November. We're talking about how to invest in a high interest rate environment. -------------- Host: Victor Menasce email: [email protected]

Pasquale (Pat) Zingarella is based in Clinton Connecticut where he is a principal at Invest Clearly. The company specializes in providing verified reviews of real estate sponsors from verified investors. To connect and to learn more visit https://goinvestclearly.com/ --------------- Host: Victor Menasce email: [email protected]

On today’s show we are talking about anti-development movements that are becoming increasingly organized in communities across North America. The objection of these groups seems centred around the additional noise, traffic, and congestion that can result from additional people moving into an area.  Some have become so militant that they use all legal means available to object to development applications and even building permits. That’s right, in some jurisdictions it is possible to object to a project that is fully compliant with zoning at the time of building permit.  We were made aware of one such case this past week where community groups are monitoring the submittal of building applications and then launching an appeal of the building permit on the last day that an appeal is legally permissible under the statute. This is a tactic that is designed to inflict maximum pain on a property owner who has spent 100% of the funds required to invest in the pre-construction phase. The goal of the appeal is not necessarily to cause the project to be disqualified on the merits of the actual development proposal. The goal is to use the legal process to frustrate the developer and inflict financial pain on the developer with the hopes that they will voluntarily abandon the project as a result of the delays.  The hypocrisy of these objections should be clear. The very people who enjoy living currently in a community, send their kids to school, shop at the grocery store, exercise at the local gym and ride their bike in the park are only able to do so as a result of many developers taking considerable financial risk to bring these amenities to the community. 

You might have read headlines in the past couple of days that the Federal Reserve is planning to wind down its bank term funding program when it expires on March 11, literally two months away. Michael Barr is the Fed’s vice chairman for bank supervision and he signalled that the program would not be extended.  The purpose of the bank term funding program was to provide emergency liquidity to banks that needed cash by pledging collateral with the Fed at face value for up to a year. This program was implemented in the wake of the failure of silicon valley bank as a way for banks that were experiencing liquidity issues to access cash without having to sell assets that are in the “held to maturity” category. The Fed would hold these as collateral on the balance sheet at their face value.  So why is the use of this project growing rapidly at a time when the program is about to expire? ------------- Host: Victor Menasce email: [email protected]

On today’s show we are talking about the recently introduced piece of legislation in the US Congress dated December 5. There is a corresponding bill that was introduced in the Senate by Democratic members of both the house and the senate.  The Congressional Bill is called the “End Hedge Fund Control of American Homes Act”.  The second bill is a Senate Bill called the American Neighborhoods Protection act.  The Senate version of the bill would limit ownership to 75 single family homes. Those owners who continue to hold these properties shall be subject to an annual tax of $10,000 per unit for each year that they hold the property. The taxes collected by the IRS shall go into a newly established fund that is designed to help create and subsidize affordable housing.  Single family homes in some markets are experiencing a large number of transactions being purchased by large corporate buyers. But still they represent a tiny fraction of the transactions in the market.  The stories being reported widely across the internet of large corporate buys purchasing a dominant share of homes in the market is simply false. Are big Wall Street investors really buying 44% of homes this year? The answer is no — not even close. ----------- Host: Victor Menasce email: [email protected]

On today’s show we are talking about how to size your business into the future.  Some people think that profitability in a business is something that happens. Profit is what is left over after you subtract expenses from your income. Yes, that is the math for calculating what your profit will be.  But that doesn’t mean you don’t have control over your revenue or your expenses.  What should you do when you are experiencing a downturn in business?  There are three ways to grow your business.  You can acquire more customers You can raise your prices You can sell additional products to your existing customers But then there is another tactic. Some businesses lower their prices in the hopes of stimulating more sales.  There is one more way to grow, and that is by growing inorganically. That could involve the purchase of another company, a production, a division, even a customer list. Growth through acquisition is a legitimate way to add top line revenue, and even bottom line contribution. It represents an opportunity for operational savings. You might be able to rationalize and reduce core admin functions like HR. Finance, maybe some marketing overhead and so on.  It often seems counterintuitive. In moments of stress, the natural instinct is to tap the brakes. But you know that if your car starts to skid, applying the brakes will cause you to spin out. Sometimes the proper corrective action is to hit the gas in order to get the car moving along the right trajectory.  So it is with a business. --------------- Host: Victor Menasce

On today’s show we are talking about property taxes.  We have experienced dramatic increases in costs for owners of multi family apartment properties over the past couple of years. The biggest contributors have been the cost of capital as a result of rising interest rates and the rising cost of insurance.  In some areas of the southern United States, insurance costs are up by 500%-700%. Insurance increases of 30%-50% are routinely being reported by  property owners that I speak with.  The cost of providing government services naturally has increased as well. Local governments derive the majority of their revenue from property taxes and to a lesser degree from development impact fees.  From time to time the jurisdictions can also alter the formula they use to determine property value. For example in the wake of the 2008 crisis, property values fell widely across many parts of the United States. The net result was that the assessed value for tax purposes also fell. Many property owners appealed their tax assessments and were successful in having their property taxes reduced significantly.  Of course the cities in which the values fell did not have a corresponding fall in operating expenses. They still needed to pick up the trash, cut the grass, pay the school teachers, provide police and fire service and so on.  In response, some cities changed the formula by which the property values were assessed. The housing market surged during the pandemic sending the value of the typical U.S. home 37% higher than in February 2020 prior to the crisis.  Cities and counties typically reassess property values every year or two, although some regions have gaps of several years between reassessments. That means homeowners are just now seeing the real estate boom reflected in their tax bills. ------------ Host: Victor Menasce email: [email protected]

Ken Brown is based in Washington DC where he is a principal at Lion Chase Holdings. On today's show we are looking at the outlook for the coming year. To connect with Ken visit https://lionchase.com --------------- Host: Victor Menasce email: [email protected]

Scott Lewis is based in Golden Colorado where he is a principal with the Spartan Investment Group. Our team at Y Street Capital is also work with the Spartan Group on a couple of projects including the construction of a new storage project in Grand Junction Colorado. On today's show we are talking about project execution and scaling the business. To connect with Scott, visit spartan-investors.com --------------- Host: Victor Menasce email: [email protected]

On today’s show we are taking a look at the build to rent trend that’s growing across many parts of the United States. This is where you build an entire community of detached single family homes or in some cases townhomes. In fact there is a continuum of product offerings that are possible to bridge the gap between the density and cost of detached homes versus a multi story apartment complex. The traditional thinking is that the most lucrative investment is always the highest density property. The more units you can put onto a piece of land, the more you can get in terms of income and value. On today’s show we are going to look at the cost of construction associated with these different building styles to see how that might influence the choice of one over another. --------- Host: Victor Menasce email: [email protected]

On today’s show we are talking about different types of trusts. Now before we begin, let me state categorically that I’m not a lawyer and I’m not an accountant and I’m not here to provide any form of tax advice or legal advice.  The purpose of today’s show is merely to discuss different types of trusts so that you are armed with enough information to conduct additional research of your own, and then in turn seek advice from your own advisors, licensed to practice in the jurisdiction where you reside.  So here we go.  A trust is a legal relationship that entails the separation of legal ownership and beneficial interest. It is created when property is transferred by a settlor, who owns it, to a trustee, who holds legal title to it for the benefit of another person or persons, known as the beneficiaries. Most trusts have a trustee whose primary role is to enact decisions on behalf of the trust’s beneficiaries. There are many types of trusts and we’re going to briefly define a few of those today. 

On today’s show we are talking about how and when to hire an interior designer.  As developers and as building owners we often look to the architect to help us determine the aesthetic of our buildings. But often the skillset is not sufficient to cover the breadth of interior design.  We often hear the term interior decorator and some people use these terms interchangeably. But they are very different in my mind. While there is some overlap in their responsibilities, there are distinct differences in terms of education, scope of work, and professional expertise. -------------- Host: Victor Menasce email: [email protected]

Today is another AMA episode. Steve asks “Without a crystal ball but more broadly, what is your opinion of bitcoin as an investment?” ------------ Host: Victor Menasce email: [email protected]

Our book this month is called “Noise: A Flaw in Human Judgement” by Daniel Kahneman, Olivier Sibony, and Cass Sunstein. Daniel Kahneman is an author, psychologist and economist notable for his work on hedonic psychology, psychology of judgment and decision-making. He is also known for his work in behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences. He is also the author of Thinking Fast and Slow which we reviewed on the show last year. In this book, the authors make the distinction between different sources of deviation from the ideal target. The most obvious source of error is bias. But in many cases, noise can be as large as bias when it comes to introducing error or any unwanted form of variation.  ------------- Host: Victor Menasce email: [email protected]

Sean Roberts is based in Denver Colorado and is the CEO of Villa Homes. The company is focused on designing and building a wide product line of factory built accessory dwelling units for the California market. They are the largest supplier of volumetric ADUs in the state and target both residential in institutional clients. To connect with Sean and to learn more, visit villahomes.com ---------------- host: Victor Menasce email: [email protected]

Tim Lyons is managing two careers simultaneously. He's a Lieutenant with the NYC Fire Department and is also a managing partner with City Side Capital, a FINRA registered broker dealer license. On today's show we're talking about managing dual careers and capital allocation in today's environment. To connect with Tim, visit citysidecap.com or check out the Passive Income Brothers Podcast. ------------- Host: Victor Menasce email: [email protected]

It appears as though a lot of people got 2023 wrong. What happened happened, and what didn’t happen, didn’t happen. But the history books are actually based on the narrative that is attached to what happened.  I was thinking hard about what to say about 2023 that would be insightful and meaningful.  We could attach the narrative that In 2023 interest rates went up. Or did they? The yield on the 10 year treasury was 3.83% on January 1 and we closed out the year at a yield of 3.88 today, up slightly from yesterday’s 3.77%. Hardly a monumental shift in a year. Yes the rate fluctuated substantially in the middle. In the end, it went sideways, it was a huge nothing burger.  We could say that interest rates went nowhere in 2023. It would actually be a true statement. But short term rates did increase in 2023 which definitely impacted many borrowers.  The Fed Funds rate went up from 4.5% at the start of 2023 to 5.5% today. When you look at the numbers in that context, it doesn’t seem monumental either. If you take it back to March 2022, then you see the most rapid increase in rates in modern history. But here too, the conclusion is subjective.  ------------ Host: Victor Menasce email: [email protected]

On today’s show we are examining the ways in which energy efficient systems are not achieving their performance goals due in part to the way traditional systems have been used. As we are getting deeper into the winter heating season this is an important factor when it comes to energy efficiency and saving money in particular. To understand this we need to take a closer look at how energy use is charged to the end customer and the interaction between the customer behaviour and the billing process and the third variable in the system which is the thermostat. There is a very clear trend towards eliminating traditional heating systems replacing them with heat pumps. Heat pumps are theoretically more efficient than traditional counterparts like electric heaters, or petroleum based furnaces.  Increasingly the electric utilities have introduced a multi tiered time of use pricing model. The rate that you pay for electricity use varies widely based on when you use it. On today's show I will show you how to avoid some traps that can cost you a lot of extra money for no good reason.

On today’s show we are looking at Florida’s Live Local Act. Florida is an example of how one state has taken real steps to create the incentives for new affordable housing to be created. This legislation is a series of incentives designed to stimulate the development of workforce housing. Many of Florida’s high priced communities have become impossible for the people who work in those communities to live in those same communities. The result is that service staff that work in restaurants, clean  homes, cut the lawn, teach in schools, work in hospitals are commuting from a long distance away.  Cities like Miami have very unusual characteristics in their housing market. There is very expensive new construction, and much less expensive housing that is quite old housing stock. The average is somewhere in the middle. But the averages can be misleading. There is virtually zero housing at the average. It’s almost a bipolar distribution with nothing in the middle. Many cities in Florida are increasingly experiencing this phenomenon. Cities like Palm Beach have virtually zero workforce housing.  The Act provides for a comprehensive, statewide workforce housing strategy, designed to increase the availability of affordable housing opportunities for Florida’s workforce, who desire to live within the communities they serve. To date, the funding program has enabled housing for about 13,000 families. That comes to an average of about $15,000 per household. ----------- Host: Victor Menasce email: [email protected]

Today is another AMA episode. Today’s question comes from J who writes: I’m performing due diligence on an investment opportunity for a conversion of an existing property into a multi-unit property. This is essentially a repartitioning of an existing 3000 SF property into multiple units. The total investment is about $1.5M and the deal sponsor is estimating that the property will be valued at $3M based on the income approach. It’s in an area that is not known for the most expensive properties. What questions should I be asking from a due diligence perspective? -------- Host: Victor Menasce email: [email protected]

On today’s show we are looking at real estate in China to try and understand some of the factors that have molded that industry into what it has become today. Private ownership of property in China began in the late 1970’s and accelerated through the 1980’s and 1990’s. At the same time, there was a mass migration from the farms in rural areas to the cities to work in factories.  In North America and Europe, when you buy a new condo apartment, you might give the developer a small deposit to show your commitment to purchase the unit when completed. But in China, buyers give typically a 40% downpayment and then secure a loan for 60% of the purchase price. The developer then gets the downpayment and the loan proceeds pre-construction and the new owner starts making payments to service the loan immediately, even though they might not take possession of their home for another 2-3 years.  Over the last 10 years the population has continued the shift from rural areas to the cities with the urban population growing by 200M people and the rural population shrinking by 146 million people.  So just like in the US where some cities have been shrinking. I’m thinking of cities like Detroit which has lost more than 50% of its population since the peak in the 1970’s, many small Chinese cities are getting hollowed out.  Some estimates put the number of vacant homes between 60M - 80M empty homes.

Ray Heimann is based in Pittsburg, PA where he is a principal with Terra Capital. His firm specializes in redeveloping historic properties in mature neighborhoods and converting them into luxury class multi-family properties with old world charm. This is a unique angle on multi-family investing and redevelopment. To learn more and to connect with Ray, visit usaterra.com ------------- Host: Victor Menasce email: [email protected]

Anna Olin and Weina Zhang are based in Las Vegas where they manufacture unitized building structural systems that embed the buildings structural elements in the core which correspondingly simplifies the building facade construction. The labor savings of 40% means significantly lower cost compared with other conventional systems. Connect with Anna and Weina at zlifeco.com or visit their most recent project at midtownvegas.com. ------------------ Host: Victor Menasce email: [email protected]

On today’s show we are talking about the law of supply and demand. This is one of those principles that I treat with the same reverence as a law of physics. It’s a little like gravity. If you try to fight gravity, you’re probably going to come out on the losing end of that battle.  Back in the 1950’s we had explosive population growth in North America. This was the so-called baby boom. Demographics following the apocalypse of WW2 meant growing population and the associated economic boom that comes with it. We no longer have these conditions in our society. Many western economies are experiencing aging populations, declining birth rates and falling demand for housing, along with shifting demand for services.  If populations are growing, it’s the result of immigration. ------------ Host: Victor Menasce email: [email protected]

On yesterday’s show I speculated on some of the reasons why the Fed might have pivoted. These reasons all sounded pretty plausible. Then I listened to an interview with Chicago Fed President Austan Goolsbee, who was on the Fed’s rate-setting committee this year. He spoke with the WSJ’s Take On the Week podcast host to discuss why “all things are on the table” when it comes to interest rates, including potential rate hikes, and why he thinks there is still a risk of recession. Plus: what’s keeping him up at night, and why he says it may be time for the Fed to shift its focus from inflation to the slowing U.S. labor market. Naturally, Austan Goolsbee was careful not to make any predictions. But he did provide some meaningful insights as to why the change of heart at the Fed. He was asked about the spectrum of opinions across the members of the Fed. While all of the FOMC board members and all of the regional bank presidents have a voice at the table,  not all members have a vote. There is a rotating voting structure where each board member serves a term on the rate setting committee.  In retrospect, I totally missed what was an obvious reason for the change.  The Fed is well known for relying on the so-called Phillips curve as one of the core financial models when it comes to understanding the economy. 

On today’s show we are talking about why the Fed made a surprise announcement last week which involved the potential for several 0.25% rate cuts in 2024. This seems like a dramatic about face compared with the rhetoric from the Fed only a few weeks earlier.  So the question is, what did the Fed see that caused them to change their tune?  ----------------- Host: Victor Menasce email: [email protected]

On today’s show we are taking a look at a new report issued by the staff at the US SEC to the SEC and to the Congress. The law requires the SEC to undertake a review of the accredited investor definition, at least once every four years to determine whether the requirements of the definition should be adjusted. This 53 page report is packed with tons of interesting data. Based on the findings, I'd be shocked if we don't see an amendment to the definition sometime in the first half of 2024.

On today’s show we are talking about the shrinking influence of governments around the world. Politicians act as if they can control what happens within their borders. They act as if the national economy is under their control, and that if they set the rules for the nation, they can control what happens within their borders.  But the fact is, we have a globally interconnected world.  It’s becoming more and more difficult for governments to control what happens within the borders. The Euro dollar system which involves the movement of funds internationally can have as large an influence if not even greater influence on financial markets than governments. Investors influence the market more than governments do.  Interest rates around the world are going down all over the world. Central banks are not doing much to push rates lower. The Fed did not lower rates this past week. The bank of Canada kept rates constant at the December meeting. ECB officials agreed Thursday to hold the bank’s deposit rate at 4% for a second straight meeting. The Bank of England Thursday also announced that it would leave its key rate unchanged for a third straight meeting. The Swiss National Bank on Thursday kept interest rates on hold at 1.75%. So then why are rates falling?

Dr. Neel Chadha is a practicing physician in Ottawa Canada and is also a part-time developer of senior housing, assisted living and memory care facilities. On today's show we're talking about designing service offerings. You can connect with Neel at [email protected] ------------- Host: Victor Menasce email: [email protected]

Richard Crouch is based in Richmond Virginia where he is with the law firm of Woods Rogers Vandeventer Black. On today's show we are talking about some of the common pitfalls when structuring agreements. To connect or to learn more you can email Richard at [email protected] or visit their website at https://wrvblaw.com/ -------------- Host: Victor Menasce email: [email protected]

On today’s show we are talking about a concept in project management that is rarely discussed. When we think about the items that determine a project’s timeline, there are all of the text book steps in developing a project plan. More advanced project management means identifying those project constraints that are critical in nature. This is taken from the theory of constraints work by Eli Goldratt. The idea behind the theory of constraints is that there can be other critical resources apart from time. The impact of a critical resource can result in time delays, but in that instance it is not time that is the critical resource. This is a subtle but important distinction.  ------------- Host: Victor Menasce email: [email protected]

On today’s show we’re going to the dark side to listen to Jim Cramer from CNBC and try to learn why the DOW skyrocketed over 500 points in the wake of yesterday’s interest rate announcement by J Powell.  ----------- Host: Victor Menasce email: [email protected]

On today’s show we are talking about the latest CPI data announcement. This data is important going into the final FOMC meeting for the year, where the Fed held interest rates steady again for the third meeting in a row.  The month over month data showed an increase of 0.1% in consumer prices compared with a month over month increase of 0% in the month of October.  -------------- Host: Victor Menasce email: [email protected]

On today’s show we are talking about geopolitical stability and the vulnerability of nations. The idea behind globalization was that by creating economic interdependency, the world would become a more peaceful place. Many wars have an economic underpinning. But if both sides in a conflict would be harmed by economic disruption, the incentive for confrontation should be reduced.  It turns out that every nation has a weakness when it comes to globalization. No country is an island unto itself that can be fully self sustaining.  --------- Host: Victor Menasce email: [email protected]

If you’ve been listening to the podcast for a while, you will know that I’m a proponent of the laws of supply and demand. If you ignore the laws of supply and demand, you do so at your peril.  It’s always been the case that a new building will go through a process of offering leasing incentives for some of the first tenants and then remove the incentives at certain occupancy thresholds, and eventually raise starting rents as the building approaches stabilization. That’s a pretty standard process and applies equally to both residential and commercial buildings.  According to a recent study published by Costar, new properties in some over supplied markets are offering deeper and deeper leasing incentives in order to attract clients. Last year was a 40 year record year with new supply of over 950,000 multi family apartments entering the market. Some the hottest sunbelt markets can only be described as over supplied. It will take time for those markets to absorb the extra units.  ----------- Host: Victor Menasce email: [email protected]

Ed Mathews is based in central Connecticut where he runs Clark Street Capital. On today's show we are talking about what forms of marketing are effective in today's environment. To connect with Ed, visit Clark Street Capital on all the social media platforms or check out his podcast at Real Estate Underground. -------------- host: Victor Menasce email: [email protected]

Ryan Smith is based in San Diego California where he specializes in SBA financing for business across the US. On today's show we are talking about the nuances of the different SBA programs. You can connect with Ryan at thinkSBA.com ------------ Host: Victor Menasce email: [email protected]

On today’s show we are talking about why we are seeing long term interest rates falling, even though short term rates have held steady since mid summer.  We can see clearly what has happened in the market. Long term rates went up from June to October, peaking at nearly 5% for the 10 year treasury. The rates have dropped by nearly a full percentage point since the end of October. The yield curve had nearly flattened after being inverted for much of the past 18 months. Now the yield curve is deeply inverted again. As of publication of today’s episode the yield for the 10 year was 4.12% The rates for permanent financing are indexed to the 10 year treasury in the US, and the commercial bond rate in Canada. Canadian CMB bond rates are even lower at 3.66% for the 5 year and 3.72% for the 10 year. It’s tempting to simply rejoice at the lower borrowing costs and ride off into the sunset with new commercial loans at respectable rates. But life’s not that simple. The real question is why are rates falling so rapidly after rising sharply in the weeks leading up to the middle of October?  What is the market telling us? What is the bond market telling us about the economy?  What is the bond market telling us about inflation?  What is the bond market telling us about the future trajectory of interest rates?  What is the bond market telling us about the future price of the medium term treasuries, and is there anything we can learn from that?  ---------- Host: Victor Menasce email: [email protected]