Net Seller? Or Net Buyer? You decide…
As many of you know, we had an intellectual debate of sorts, last week, discussing whether net sellers or net buyers would be the winners in 2021.
Moderated by Ben Lapidus with panelists: Brandon Kramer, Senior Associate and Associate Director with Marcus & Millichap, Anna Dwyer, Senior Acquisitions Associate with City Line Capital, Josh Satin, Vice President of Acquisitions with Gelt Inc., and Scott Lebenhart, Director of Acquisitions with Ashcroft Capital, the debate was informative and had several good points for both sides.
While I wish we could say we have a clear answer for you, we don’t. Truly, both have their benefits and drawbacks. A lot will depend on where you are with your real estate investing and what will work best for you personally.
Though thoughts were divided, those that argued FOR net selling said, while buying is still on the table, there will be more opportunities to sell than buy in 2021 and this may be the last opportunity to take the chips off the table.
The FOR team also made the argument that the asset choice matters…several industries, such as self-storage or hotels, are consolidating rapidly and creating cap rate compression. Additionally, real assets move with inflation. And, with financial assets at an all-time high, where would you put proceeds from real estate sales? Where else is there to invest?
Definitely food for thought.
Now, here comes the AGAINST net selling…saying CASH is king (which is hard to argue) and proceeds won’t need to be placed anywhere. Sometimes, the best answer is to take a knee, “be still”, and assess the operating environment. There is an opportunity cost to trapping your capital into long holds when greater opportunity could be just around the corner.
All in all, with audience participation, the team debating AGAINST the motion “Winners in 2021 Will Be Net Sellers” had audience sentiment at +13 points compared to the FOR team’s at +1 point.
If you missed the seminar and would like to see the full playback, those that are ticket holders for BEC 2021 have access to it via the private Facebook and LinkedIn groups. So join the groups, if you haven’t already, and check in.
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Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.