Name: Real estate vs. infrastructure: Family offices in focus with Wendy Craft
Uploaded: 2024-10-16T14:43:21.380Z
Duration: 344.16

Wendy.mp4

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Wendy.vtt

English

{{00:00:12}}
We recently had the interest
rate lowered in the U.

{{00:00:17}}
S.

{{00:00:17}}
I understand we were just on panel and
I understand that's not across the board

{{00:00:21}}
for other family offices, but for U.

{{00:00:23}}
S.

{{00:00:23}}
family offices, it was welcome relief.

{{00:00:26}}
Especially that it wasn't still going up.

{{00:00:29}}
We had anticipated that there would be
another interest rate cut this year,

{{00:00:32}}
but the jobs report just came in.

{{00:00:36}}
I think we're going to be wishing and
hoping in That's not going to really

{{00:00:40}}
happen, inflation is down, so gas is
down grocery prices are down, they

{{00:00:47}}
wouldn't have cut the rates, in the U.

{{00:00:48}}
S.

{{00:00:49}}
they don't cut the rates unless the
inflation's gone down, however there's

{{00:00:53}}
going to be a real lag, it's not like
they cut the interest rates, we throw

{{00:00:57}}
a party and everything's great again,
unfortunately, there are still a lot

{{00:01:01}}
of properties underwater, that's not
necessarily It's not necessarily a

{{00:01:05}}
reflection of Bowering so much as we're
still coming out of COVID, certain

{{00:01:11}}
types of assets, commercial real estate
people have not returned to the office.

{{00:01:16}}
So there's a lot going on there that
isn't related just to the interest rates.

{{00:01:21}}
It's going to be a while yet.

{{00:01:29}}
Elle Family Office kind of
invests in a different way.

{{00:01:33}}
We invest in all real
estate except industrial.

{{00:01:37}}
And I'll get to the infrastructure
in a second, but we do invest

{{00:01:41}}
in commercial real estate.

{{00:01:42}}
We don't convert it so much as we
take it down and replace it with

{{00:01:47}}
multi family housing, townhomes.

{{00:01:50}}
We do covered land plays, assemblages.

{{00:01:53}}
For us, this distressed market has
been really great, but there are

{{00:01:57}}
some commercial empty businesses.

{{00:01:59}}
There have been a lot of new
investments, at least in Southeastern U.

{{00:02:04}}
S., which are putting data centers
into these vacant buildings, as

{{00:02:09}}
opposed Post building new ones, and
then combining them with 10 year

{{00:02:13}}
leases for big companies, Oracle,
Google, Amazon, those kind of things.

{{00:02:19}}
So we're starting to see a real merging
of the two, which I think is fabulous.

{{00:02:25}}
And we'll see where that goes.

{{00:02:28}}
I don't think this has played out yet.

{{00:02:29}}
I don't think we were at
the end of that story.

{{00:02:39}}
Again, it's not anything anybody
hasn't heard before, right?

{{00:02:42}}
Real estate is location, is very
different here in Europe and UK

{{00:02:49}}
and even New York and California.

{{00:02:52}}
What we have in Southeastern United States
is the ability to, in the regulation,

{{00:02:59}}
to change things to suit the investors.

{{00:03:03}}
Whereas you're under a
lot more restrictions in

{{00:03:05}}
other parts of our country.

{{00:03:08}}
So I, again, it hasn't played out yet,
but I think what we're going to see

{{00:03:12}}
is a consolidation into existing CRE
and then the excess commercial real

{{00:03:19}}
estate we're going to see taken down.

{{00:03:21}}
And I don't know how that's going
to play with the infrastructure.

{{00:03:24}}
I really don't have an answer for that.

{{00:03:26}}
I don't have an answer yet
because it's very much in flux.

{{00:03:29}}
We had different answers before
the interest rates came down.

{{00:03:32}}
Now we're all on a wait and see, what are
they going to do by the end of the year?

{{00:03:36}}
Will the election make them hold off?

{{00:03:38}}
I don't know.

{{00:03:39}}
I just, if I had the crystal
ball, I'd be a billionaire.

{{00:03:48}}
So it has not passed the title of our
panel was, are we out of the woods?

{{00:03:53}}
Yeah, no.

{{00:03:56}}
The family I work for,
we invest in distress.

{{00:04:00}}
So we're still buying notes.

{{00:04:02}}
People are still approaching us.

{{00:04:04}}
We have this asset that's under the water.

{{00:04:07}}
We have this distressed note.

{{00:04:08}}
Would with the property,
would you like to pick it up?

{{00:04:11}}
So there's plenty of opportunities,
which tells me we're not

{{00:04:14}}
even close to coming out yet.

{{00:04:17}}
50 basis points isn't going to save
anybody who's underwater, unfortunately.

{{00:04:22}}
We also have lags in spaces where
it's very hard to get debt on hotels.

{{00:04:29}}
Even though hotels, I think you've
experienced a little over tourism

{{00:04:34}}
here and here over the summer, we
still can't get debt on hotels.

{{00:04:39}}
And we were talking about that
on panel today, why that is.

{{00:04:42}}
So we're, lagging a lot.

{{00:04:45}}
This is not going to be solved
soon and it's not going to be easy.

{{00:04:54}}
I think you really have to look at
where are you looking and that's going

{{00:04:58}}
to determine the asset type and what
type of return is it an asset that

{{00:05:03}}
really needs to be torn down or is it
an asset that can just kick off returns?

{{00:05:08}}
Now, most families, and I'm
not saying, Speaking for all

{{00:05:11}}
families, they need returns.

{{00:05:13}}
They're not looking to get involved
in something where it's going to be 10

{{00:05:18}}
years before they get their money back.

{{00:05:19}}
So they're still looking for returns.

{{00:05:21}}
And that leads you to
think multi family housing.

{{00:05:25}}
Multi family housing is
still a pretty good buy.

{{00:05:28}}
You invest, you get a return.

{{00:05:30}}
And a lot of families like that.

{{00:05:32}}
So I think you really have to determine
the best fit for your family and

{{00:05:36}}
the best location to get that fit.

We recently had the interest
rate lowered in the U.

I understand we were just on panel and
I understand that's not across the board

Especially that it wasn't still going up.

We had anticipated that there would be
another interest rate cut this year,

I think we're going to be wishing and
hoping in That's not going to really

happen, inflation is down, so gas is
down grocery prices are down, they

they don't cut the rates unless the
inflation's gone down, however there's

going to be a real lag, it's not like
they cut the interest rates, we throw

a party and everything's great again,
unfortunately, there are still a lot

of properties underwater, that's not
necessarily It's not necessarily a

reflection of Bowering so much as we're
still coming out of COVID, certain

types of assets, commercial real estate
people have not returned to the office.

So there's a lot going on there that
isn't related just to the interest rates.

Elle Family Office kind of
invests in a different way.

We invest in all real
estate except industrial.

And I'll get to the infrastructure
in a second, but we do invest

We don't convert it so much as we
take it down and replace it with

For us, this distressed market has
been really great, but there are

There have been a lot of new
investments, at least in Southeastern U.

S., which are putting data centers
into these vacant buildings, as

opposed Post building new ones, and
then combining them with 10 year

leases for big companies, Oracle,
Google, Amazon, those kind of things.

So we're starting to see a real merging
of the two, which I think is fabulous.

I don't think we were at
the end of that story.

Again, it's not anything anybody
hasn't heard before, right?

Real estate is location, is very
different here in Europe and UK

What we have in Southeastern United States
is the ability to, in the regulation,

Whereas you're under a
lot more restrictions in

So I, again, it hasn't played out yet,
but I think what we're going to see

is a consolidation into existing CRE
and then the excess commercial real

And I don't know how that's going
to play with the infrastructure.

I don't have an answer yet
because it's very much in flux.

We had different answers before
the interest rates came down.

Now we're all on a wait and see, what are
they going to do by the end of the year?

I just, if I had the crystal
ball, I'd be a billionaire.

So it has not passed the title of our
panel was, are we out of the woods?

The family I work for,
we invest in distress.

We have this asset that's under the water.

Would with the property,
would you like to pick it up?

So there's plenty of opportunities,
which tells me we're not

50 basis points isn't going to save
anybody who's underwater, unfortunately.

We also have lags in spaces where
it's very hard to get debt on hotels.

Even though hotels, I think you've
experienced a little over tourism

here and here over the summer, we
still can't get debt on hotels.

And we were talking about that
on panel today, why that is.

This is not going to be solved
soon and it's not going to be easy.

I think you really have to look at
where are you looking and that's going

to determine the asset type and what
type of return is it an asset that

really needs to be torn down or is it
an asset that can just kick off returns?

Now, most families, and I'm
not saying, Speaking for all

They're not looking to get involved
in something where it's going to be 10

And that leads you to
think multi family housing.

Multi family housing is
still a pretty good buy.

So I think you really have to determine
the best fit for your family and

Expert Insight

Wendy Craft, CEO of Elle Family Office-Lazarian SFO, breaks down how family offices are navigating rising interest rates and inflation. She dives into the real estate and infrastructure crossover, discusses the volatility ahead, and reveals what’s driving the next wave of recovery. Fast-paced insights from SuperReturn Infrastructure you can’t afford to miss!

Want to hear more? Register for next year at www.superreturninfra.com 

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