https://www.afire.org/podcast/risingpressurecast/

The increasing burden of state and local taxes required to face the mounting level of unfunded pension liabilities and other committed liabilities could drive widening differentials in local business and living costs, alter regional growth patterns and thereby affect CRE demand.

The COVID-19 pandemic and its impact on the economy and local tax collections is exacerbating this pre-existing issue.

The latest joint report from the Praedium Group and SitusAMC, published earlier this year in Summit Journal, looks at rising fiscal pressures on state and local governments, including large-scale changes accelerated by the pandemic.

Throughout the stages of the past economic cycle, Praedium and SitusAMC Insights have published a series of joint reports analyzing the fiscal pressures on state governments and how the resulting responses to those fiscal pressures may affect demographic patterns, economic growth trajectories and commercial real estate demand.

On this episode of the AFIRE Podcast, report authors Russell Appel, Founding Principal of The Praedium Group, and Peter Muoio, Ph.D., Senior Director for SitusAMC Insights, discuss how this research has evolved, and what it means for the future of commercial real estate investments.

The AFIRE Podcast

Rising Pressure / State and Local Fiscal Challenges

Mosaic Real Estate Investors CEO Ethan Penner, the latest guest on the AFIRE Podcast, doesn’t believe the office sector has hit bottom.

https://www.afire.org/podcast/202407cast/

Yet, at the beginning of 2024, Penner and his business partner Chad Carpenter announced a new US office-focused real estate finance company, Reven Office REIT, that intended to raise $1 billion to provide office owners and investors with bespoke financing solutions.

“Office is a very complicated investment asset today,” Penner says. “It’s something that has inspired fear in investors, and rightly so. But what’s interesting is that when fear becomes pervasive, markets are abandoned. And of course, babies are thrown out with bathwater.”

Penner and his partners are trying to find those “babies”—the office investments that continue to have upside, despite ongoing challenges for the sector. 

In this episode of the AFIRE podcast, Penner explains his sometimes counterintuitive take on the health of the office sector with podcast host and AFIRE CEO, Gunnar Branson. Aside from his enthusiasm for finding overlooked gems in the sector, Penner holds concerns about the effect of AI on the future of office. “The [threat] that looms largest, that’s on the horizon, that people are in denial about,” Penner says, “is the impact of AI on jobs, period. I think that there’s a real threat— technology happens faster than people can imagine.”

Ethan Penner on Curing the Office Slowdown

AFIRE is the association for international real estate investors focused on commercial property in the United States. www.afire.org

Ethan Penner on Curing the Office Slowdown

AFIRE

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