Services Inflation Persists Amidst Core Goods Deflation

Unveiling the Market's Secrets from Behind the Scenes

Author

Nuvo Capital
February 15, 2024

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”We expect more core goods deflation this month, mainly driven by weak used car prices. Gradual deceleration is confirmed, but services inflation remains sticky with some deceleration in rents inflation but a slight rebound in insurance prices and hotels.”

- Diego Anzoategui, Economist at Morgan Stanley

Recent Multifamily Sales (Click to view details)

Recent Multifamily Loans (Click to view details)

Question: 

When exploring opportunities for multifamily investments in a competitive market, how do you differentiate between short-term trends and sustainable indicators to make prudent investment decisions?

Answer: 

Navigating a competitive multifamily market requires a discerning eye to differentiate short-term trends from sustainable indicators. Scrutinize market data over an extended period to identify consistent patterns. Assess the economic fundamentals, such as job growth and population trends, which contribute to long-term demand for rental properties. Consider the impact of macroeconomic factors on the local market, and be cautious of speculative trends. Engaging with local experts and staying attuned to the broader economic landscape helps investors make informed decisions that align with the enduring potential of the multifamily investment.

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Unpacking The CRE CLO

After the 2008 financial crisis, investment managers came up with a new securitized product: the collateralized loan obligation, or CLO, for commercial real estate. It was designed to correct some of the risks that came with its predecessor, the collateralized debt obligation.

But what exactly is the CRE CLO and how does it work? Deconstruct enlisted attorney and CLO expert Stewart McQueen at Dechert to break down the product.

Quiz of The Week

What is the role of a property manager in multifamily real estate?

a. Designing property layouts

b. Marketing the property for sale

c. Overseeing day-to-day operations

suoᴉʇɐɹǝdo ʎɐp-oʇ-ʎɐp ƃuᴉǝǝsɹǝʌO .ɔ

Random Tip of the Week

✍️Assess Risk Tolerance - Before making any real estate investment, evaluate your risk tolerance. Different types of properties and markets come with varying levels of risk. Understanding your comfort level with risk will help you choose investments that align with your financial goals and ability to weather potential downturns.

Current Rates (Weekly Update)

10-Year Treasury - 4.31% (⬆️.22%)

Fed Funds Rate - 5.33% (0%)

1-Month Term SOFR - 5.32% (0%)

About Nuvo Capital Partners

Nuvo Capital Partners is a niche market-focused multifamily investment platform operating in the Southeast. As a dedicated sponsor (General Partner), we specialize in institutional quality real estate investments within these regions. Our team comprises industry professionals with 25+ years of combined experience, ensuring expertise and market knowledge. We pride ourselves on offering a transparent investment process, providing our investors with access to high-quality real estate opportunities while upholding integrity throughout.

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