Population Growth and Home Price Appreciation

Freddie Mac recently published an excellent report called US Population Growth: Where is Housing Demand Strongest? Similar reports underscore the growth in sunbelt states and highlight the MSAs that are growing fastest. The report highlights that US population growth is slowing. Therefore, real estate investors must focus more carefully on the composition of growth drivers (net migration … Read more

Sizing Exposure to Real Estate

What’s the right allocation to private equity real estate? The honest answer, as ever, is that it depends. It mostly depends on the individual’s risk tolerance, objectives, existing portfolio, and other tax, liquidity, and estate planning considerations. It also depends on what you mean by real estate, which can take many forms and carry a … Read more

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 … Read more

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 … Read more

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 … Read more

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 … Read more

Managing Apartments During COVID

We and our partners have remained intensely focused on operations and tenant engagement since early March. For now, our on-site property management teams have done a great job navigating the operational challenges of COVID. We’ve found ways to manage work requests, rent collections, and leasing engagement within the constraints of social distancing. According to the … Read more

December 2019 – Looking Back, Looking Ahead

December has been a time of reflection here at Cove Investments. As the days grow short and the new year (decade) approaches we’ve been thinking about how we can better serve our investors and our broader community of investors, partners, and friends.   By conventional measures, our first year has been a rousing success. Cove … Read more

Institutions Adding to Real Estate

Looking at the macro environment, we’re struck by how much has changed since last month’s comments.  In early October it seemed a foregone conclusion that we’d soon face our first recession since the Global Financial Crisis (GFC). Capital markets couldn’t have been more clear in their signals: bond yields were collapsing, the yield curve had inverted, credit spreads … Read more

Global Influences on Local Investments

Many times, the outcome of an investment, both positive and negative, are outside of our control. While they cannot be influenced, they are dangerous to ignore. In this post, I’ll explain why the low yields of global bonds may significantly affect returns of your US real estate investments. Location, Location, Location… And Perspective Let’s take … Read more