LP Digest #61
Gain on lease, 4% caps, macro optimism & sources and uses
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Just like most LPs haven’t heard of cash *in* refinances before investing prior to 2022, I think “gain to lease” is the next surprising term with a bite.
I’ll write more on this soon, but in the meantime just a reminder that rents don’t always go up against an existing rent roll
As I wrote in Minimum Viable Deck, a sources and uses is critical to an LP when making an investment decision.
Brandon makes a good point on further advances (i.e. when a lender agrees to fund in the future for something like construction)
A well written summary, you can see more on my thoughts on this topic here
May sound counterintuitive but it’s spot on.. and also why cap rates are misleading
Always have to read these with some skepticism considering the bias (KKR raises money from investors), but interesting nonetheless
I found this exchange to be interesting; perhaps the first exchange I’ve seen addressing the impacts of AI on capital allocation
I’ll add some color on this prediction and others next week
Have a wonderful weekend!
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