Our Safe Haven

During the first half of the year the REITs were able to raise substantial sums at a low cost of capital, and to out bid private investors. The CMBS 2.0 market was ramping up and as many as twenty five firms entered the market and began to staff up. Money was flowing and values were beginning to rise rapidly, especially in the usual major markets where cap rates were getting to silly levels for office and even for larger hotels. Money literally poured into Manhattan properties as though it was 2007 all over again, and CMBS lenders were even starting to go to covenant lite. It began to look like amnesia had set in and the same old mistakes were starting to be made. Some of us who are older and who had seen the huge irresponsible behavior a few years ago, and had called the collapse in 2007-2008, began to talk about here we go again, doesn’t anyone remember anything. Then it happened right on schedule-August. Just like in 2007.

This August it is Europe and its lack of leadership with Angela Merkel, adding on top of the sheer disgust everyone feels with both the president and Congress over the debt talks. Once again they showed there is nobody with the slightest leadership skills and the president, instead of leading a compromise, moved left and started to rehash his class warfare and attacks on all of us who work hard to make money. Why would any businessman invest and hire when we are attacked for success and then told those of us who pay almost all of the tax don’t pay our fair share?