The Real Estate Espresso Podcast Victor Menasce

On today’s show we are going to look at something that has been making financial headlines all over the world over the past two days. The purpose of discussing it on this show is that even the major financial media like the Wall Street Journal and Bloomberg have been misreporting the story. 
The headline is that another Bank, this time a Japanese bank is running into trouble. The assumption is that the problem has to do with the inversion of the yield curve and investment in long term treasuries is the reason for the bank’s problems. Some of the problems which cause the failure of Silicon Valley Bank, First Republic Bank and Signature Bank last year stemmed from the need to raise additional cash, and in so doing, those banks were forced to sell US Treasuries at a loss. If those banks had the luxury of holding those bonds to maturity, then there would have been no losses. 
What we will discuss today is that the symptoms look similar, but that the root cause of the actual problem is quite different. 
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**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are talking about investing fundamentals. What is an investment worth? If you watch the TV show Shark Tank you will see the contestant say that they are seeking $X in exchange for y% of the company. The sharks then do some quick math to determine the enterprise value and then compare the income as a percentage of the valuation. They are trying to get a sense of the current value of the company based on multiples of net income. That’s how companies should be valued. 

We now have a stock market index that is dominated by five companies which are Nvidia, Microsoft, Apple, Meta and Amazon. 

All of this is being driven by the anticipation of the impact that AI will have on the industry. 

We need to ask ourselves questions as to whether what is happening in the stock market makes sense or not. 

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**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are talking about a new class of apartment living that is starting to make headway in several markets. We too are exploring this product offering for some of our new construction projects. 

When we talk about the continuum of care for aging adults there are several new product types being defined and accepted in the market. 

It used to be the case that the only type of senior housing was a nursing home, which today we call skilled nursing. Some simply called them old folks homes. 

Since then, there are more specialized forms of care like memory care, Parkinson’s care, independent living and assisted living. 

Well there is one more category of housing which is starting to establish market share in many communities. Still on a national level, the penetration of this product type is still tiny compared with other housing types. 

This is what we internally call a concierge apartment, or what many in the industry call an active lifestyle apartment. 

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**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are talking about the right way to build a paper airplane. 

When I first graduated university and was a new hire at Bell Northern Research in the microprocessor development team, I attended a company training course that was an entire week long. 



One of our first assignments during that week was a design exercise. The assignment was to design a paper airplane. We were given two sheets of paper. One sheet of paper was to build the actual prototype of our amazing paper airplane. The second sheet of paper was to write the manufacturing instructions for someone else to build the airplane. The paper airplane had to fly the width of the conference room which was not that large. 

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**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are exploring why so many cities have recently embraced the notion of intensification.



Through the last several decades cities have continued their relentless sprawl out into the suburbs. You have some extremely low density cities that have no natural boundaries and continue to sprawl. Dallas may only stop gobbling up land when it reaches the Oklahoma border. Phoenix may eventually become one with Flagstaff. You can literally drive for hours in Phoenix and the surrounding suburbs and I swear you would think that you have seen this street before. The houses look the same and the strip malls look the same, but you have not made a single turn.

Let’s look at the budget for development of single family homes. We’re going to zero in on the infrastructure for services for a single family home.

These days the cost of building a fully serviced road with 7 utilities is averaging about $1200 per linear foot of road.

If you have to install deep utilities for storm water management or if you have to blast through bedrock, or maybe you need a sewer lift station then those costs can multiply.

If you compare the cost of servicing 200 homes In a subdivision with a 200 unit high rise apartment building, the apartment building is going to cost a lot less in the short term and in the long term.

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**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Jon Weiskopf is based in Sturgeon Bay Wisconsin. His specialty is impact investing. On today's show we are discussing what that means and some of the constraints that are implicit in impact investing.

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**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)