Alternative Real Estate Investments

Well, first thing, Paul, let's have you peer into your crystal ball for just a moment. And I understand most crystal balls are at least partially cloudy. Mine always seems to be very cloudy. But peering into there, what real estate sub asset classes seem most attractive to you in 2025? If you're thinking about multifamily and heavy industrial, light industrial and self storage, et cetera, what seems attractive to you?

You know, Warren Buffett, Howard Marks, Charlie Munger, guys I really love. They talk about the importance of investing regardless of what the crystal ball says. And so we like to look for issues we can control versus those we can't. We can't control interest rates, we can't control an economic crash, we can't control a war in the Middle east. But we can look at fundamentals and see where they really stand. Multifamily, if it doesn't get overheated again, would be a great place to invest because of the supply and demand inequity I mentioned. But I can tell you that even if things do get bad in the mobile home park space, we have never seen a bad year and we've looked back for decades in this asset type. It was an under loved, underappreciated asset type. The supply and demand is just always out of whack and they're not building any more mobile home parks to speak of. So that's certainly one that I always like.

Now, office has been real estate's whipping boy for the last five to 10 years as more and more people work from home. It seems like there's been a little bit of reversal of that trend in the last year or two as people are expecting employees to come back to work. But what do you think is office? Office still deserve its miserable reputation it's acquired the last few years.

You know, we don't invest in office or hotels. I'm not saying that they shouldn't be invested in, but I will tell you that whenever someone says something is dead, like they said in 2020 and 2021, as people would never return to work, we're finding that that's not totally true in government and IT and lots of different companies, they are returning to work, office is coming back. In fact, certain office assets are doing as well as they've ever done. Not something I would invest in, but it is certainly doing a lot better than I ever expected it would be within five years of COVID Now, I.

Think there's a lot of people out there that are not familiar with the term light industrial. Tell us, tell us what a light industrial investment looks like.

So if you look at along the freeway in your town, you might see an industrial park. This is a place that might have a wine vault. It might have a church office. It might have a little manufacturing facility. It might have a sales force. There's dozens of different types of companies that rent these flex spaces. They can be anywhere from 3,000 to, let's say, 30,000 square feet per space. Widely diversified, and they're in very, very high demand. And I think with the current economy, they'll be in even higher demand in 2025. These are again, they can be office, they can be warehouse, they can be shipping, they can be light manufacturing, all under the same roof.

Very, very flexible space.

Yeah.

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