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Cove Investments Blog

On The Real Value of Strategists

Earlier in the week, I read a thought-provoking year-ahead strategy piece by KKR’s Henry McVey. In the note, called 2021: Another Voice, McVey shares a reasonably bullish outlook on the global macroeconomic landscape. I couldn’t tell you his 2021 year-end price target for the S&P 500, but I appreciated his framework and the way he distilled his thoughts into six themes. Specifically, we think that global allocators will need to champion investments that not only are set to thrive in a faster nominal GDP environment than in recent years, but also synch up with our six “mega macro themes”: the

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Risks to Class B/C Multifamily Investing

In our recent post, “Fears of An Apartment Exodus” we shared our views around the significant shortage of affordable housing in this country and why it’s unlikely that “everyone” will leave their apartments in the city for a single-family home in the suburbs. Supply constraints make an apartment exodus impossible in practice – we can’t push a button and automatically have millions of new homes – it also ignores the issue of affordability when demand exceeds supply. Millions of apartment residents would probably move to a home today, either to rent or to buy, if they could afford it. The

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Cove Quick Hit: Collections

As enhanced unemployment benefits have now expired, we’ll continue to closely monitor delinquency trends across our portfolio. There are a lot of dramatic headlines out there, and not just from attention-seeking press outlets. For example, the most recent Household Pulse Survey from the US Census Bureau showed that just over 1/3 (34%) of respondents nationally had little or no confidence in their ability to pay their rent next month. Critically, however, the problem is that national and even statewide data can be irrelevant to our specific properties. And surveys reflect views that often conflict with actions. We prefer to focus

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Fears of An Apartment Exodus

Over the past month, there’s been no shortage of articles in the popular press describing how COVID has affected consumer’s housing preferences. Broadly speaking, the narrative describes a rush from apartments in the city to single-family homes in the suburbs. Taken to the extreme, a major shift in demand trends would present problems to apartment investors like us. Therefore, we wanted to dig into the data a bit and share some of our initial thoughts. There’s no doubt that our new reality has shifted renters’ preference for single-family homes at the margin. In a global pandemic where work from home

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