Given projected inflation rates, what asset class will perform the best in the next several years?
What do you feel will perform the best in the next several years given projected inflation rates? 

Performing asset? Value add? New construction?

Office? Industrial? Residential?
[{"id": "i86autu", "text": "Industrial and multifamily, in my market anyway", "replies": [], "depth": 1}, {"id": "i86cs5c", "text": "Multifamily for sure; short lease terms (12 months) allows you to annually increase rents to hold with inflation. Longer leases with other asset classes usually does not provide you with the same power.", "replies": [{"id": "i86g8c6", "text": "Watch out for your insurance premiums!!!", "replies": [], "depth": 2}, {"id": "i86sjga", "text": "Based on this, I would say self storage. Their leases are only 30 days.", "replies": [{"id": "i86y2vk", "text": "Based on this, I might say hospitality.  Their \u201cleases\u201d are effectively 1-2 days. (Average length of stay for a typical hotel.)", "replies": [{"id": "i872nkc", "text": "Biggest thing is that as inflation goes up, discretionary spending is likely to go down. Doesn\u2019t bode well for hospitality or self storage, like it might for multifamily. At the end of the day, people need a place to live.", "replies": [{"id": "i875nnt", "text": "Great point! The consumer is being squeezed on all sides.", "replies": [], "depth": 5}, {"id": "i88iimb", "text": "Self storage unit rental demand is a byproduct of displacement which is high during economic downturns.  \n\nI bet if you took a survey of SS renters, you would find a portion DIDN'T have a destination that they could call their own.", "replies": [{"id": "i88m8oc", "text": "Probably a fair point there. I work for a bank and we are a lot more comfortable lending to self storage facilities than hotels of any sort. The reason you listed is probably why, it\u2019s a bit more sticky of a revenue generator, even in different economic scenarios.", "replies": [{"id": "i88n1ek", "text": "SS facilities probably stay in good condition longer if well taken care of.  It's pretty easy to watch a Days Inn turn into a Dew-Drop-Inn.  All it takes is a bad rep on yelp, some bed bugs, and a few break ins.", "replies": [{"id": "i89gtgb", "text": "Hotels are some of the worst performing assets in a downturn too. I know that\u2019s a large reason for it", "replies": [], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "i86t2c3", "text": "New construction, performing asset, or value add?", "replies": [], "depth": 2}, {"id": "i87iivs", "text": "It\u2019s interesting. At my position in phoenix properties are being underwritten so high over their actual value that I am curious if the market won\u2019t be able to hold such high rent increases and have investors losing from expected returns. I think I saw a graph that said Phoenicians are using almost 60% of income on rent which I don\u2019t think is sustainable.", "replies": [{"id": "i88j02l", "text": "I just saw a lender doing .75% DSCR.", "replies": [], "depth": 3}, {"id": "i89dapx", "text": "Jesus", "replies": [], "depth": 3}, {"id": "i8a58wk", "text": "&gt;DSCR.\n\nAZ broker here. MF is not my specialty but heard from a buddy that is a principal at a MF developer and operator that deals with Class A MF that they were told 52% LTV on a stabilized deal so the lenders are getting a little shy right about now.", "replies": [], "depth": 3}], "depth": 2}, {"id": "i885mm1", "text": "Definitely...however there will be a point of equilibrium as rents increase on consumers..We've found in our properties that the $800-1300 renter is a little different than the $1400-2000 renter in income, capacity and credit in many places outside of the coastal markets.\n\nEspecially as hoardes of syndicator and formerly fix-and-flippers move to multifamily ownership, pushing those higher rents on C and D deals to make their numbers work.", "replies": [], "depth": 2}], "depth": 1}, {"id": "i86dd0d", "text": "Storage, MHC, then multi family.", "replies": [], "depth": 1}, {"id": "i86ifom", "text": "New construction in growing cities where there\u2019s a current shortage of housing because people will always need somewhere to live. \n\nNext I\u2019m gonna say industrial as energy and shipping are on the climb.", "replies": [], "depth": 1}, {"id": "i86ka93", "text": "Data centers and cell phone towers", "replies": [], "depth": 1}, {"id": "i86kg4d", "text": "Everything will be more location dependent. Big fan of Mexico, so looking for industrial assets along the border and less at traditional ports. Farmland and mineral rights actually.", "replies": [{"id": "i8a5ap6", "text": "Water rights?", "replies": [], "depth": 2}, {"id": "i8aqu1b", "text": "How do you buy water and mineral rights? Is there a podcast?", "replies": [], "depth": 2}], "depth": 1}, {"id": "i86l8fd", "text": "Per CBRE:\n\nIndustrial is 0% vacant in top markets\n\nUS Multifamily rents increased double-digits in Q1, keeping up with or outpacing inflation\n\nNon-Class A office is getting crushed as major tenants lean toward high amenity buildings to lure back employees\n\nRetail (as always) a bit of a mixed bag but is lagging historical performance (and undervalued imo)\n\n Several global economists I\u2019ve read don\u2019t believe the inflation story extends past this year, mainly due to macro and foreign currency pressures.  I wouldn\u2019t choose an asset class based solely on inflation but class B and C multifamily are highly resilient, if not outperforming in contracting economic times", "replies": [{"id": "i86mlh7", "text": "What do you think about building a new class A multi family in a class C City with big plans for improvement?", "replies": [{"id": "i86rlmh", "text": "Risky.  Everything would have to go perfectly right for that to make sense.  And very little seems to be going right in the construction world.", "replies": [], "depth": 3}], "depth": 2}, {"id": "i86tcfb", "text": "I think the multi family increases have a little to do with WFH/Covid ending and people returning to cities. Not sure how sustainable that is.", "replies": [{"id": "i872i4v", "text": "WFH is not going anywhere. I personally wouldn't touch office.", "replies": [], "depth": 3}, {"id": "i8a8mle", "text": "The largest multifamily rent increases occurred in 2021 as people fled large cities, actually.  Lack of housing supply, home prices and low interest rates more likely the impetus.", "replies": [], "depth": 3}, {"id": "i9vs4ye", "text": "Rental increases in MF are happening due to inflation and the SFH market affordability. As SFH prices continue to become more and more non affordable for millennials and most residential buyers, they have no choice but to rent. Also, many SFH owners decided to sell and make a tiny bit of profit, and still needed a place to live, so they turned to renting for the first time in decades for many, adding additional demand to the MF rental pool. \n\nClass B/C MF is 70/80\u2019s vintage workforce housing which there will always be a need for you in communities, because manual labor and blue collar jobs will always exist as they are the primary economic driver of this country, especially in more tertiary and secondary markets, as well as suburban markets outside primary MSA\u2019s. \n\nMarket dynamic is crazy right now. With rate caps increasing 900% since January in the CMBS atmosphere as well as SOFR increases, pricing is being readjusted across the entire US on almost every MF asset class from core plus all the way to WFH assets. Crazy time to be experiencing. \n\nWhat has Covid taught us all? No one has a crystal ball and none of the fancy projections and formulas and underwriting and analytics can forecast anything more than a month away for shit. Time to buckle up and enjoy the ride", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i86ue0g", "text": "My opinion from best to worst \nIndustrial/Flex\nMultifamily \nRetail\nOffice", "replies": [], "depth": 1}, {"id": "i86xsjk", "text": "Thoughts on hospitality?  You can effectively reprice rooms everyday so if inflation is up 10% a year from now, you can just walk your room rates up with it. You aren\u2019t locked into long term leases.", "replies": [{"id": "i87cjtd", "text": "Hospitality is the most volatile asset class in real estate that I know of. When it\u2019s good, it\u2019s really good (oil boom town, anyone?). But when it drops, it drops hard (oil bust towns, anyone?).\n\nIt\u2019s usually the first to fall and the last to recover in a recession, too.", "replies": [], "depth": 2}], "depth": 1}, {"id": "i872oca", "text": "Rv parks", "replies": [], "depth": 1}, {"id": "i8773gs", "text": "The best trade out there right now are the apartment REITS.", "replies": [], "depth": 1}, {"id": "i87dog3", "text": "Self Storage seems like a solid one if the basis is fair. Everyone keep buying shit and homes are getting smaller", "replies": [], "depth": 1}, {"id": "i87dxi5", "text": "Retail suffers from price inflation without wage increases. Sales down and percentage rent down. Office also suffers depending on the tenant tho. If it\u2019s a company who\u2019s business is necessary and prices increase, the tenant will remain stable. Multi will be the best hedge against inflation, and like others have said industrial will be good too.\n\nHospitality increases their rates to keep up but once again consumers wages don\u2019t increase proportionately", "replies": [], "depth": 1}, {"id": "i899bez", "text": "The asset with the highest rent increases (currently multifamily). Would go with performing/value add vs new construction because of material costs and knowing the current cap rate vs the unknown interest rate 12-18months from now.", "replies": [], "depth": 1}, {"id": "i89c3nb", "text": "Everyone saying IN or MF is ignoring how overbid those asset classes already are. Anyone and everyone with money is investing in those property types.", "replies": [{"id": "i8edkap", "text": "They are overbid for a reason. On the industrial side, high demand and low vacancy will continue to drive rents", "replies": [], "depth": 2}], "depth": 1}, {"id": "i89yj41", "text": "Hotels have the ability to reset rents every day.  Give that a thought.", "replies": [{"id": "i8adwxp", "text": "Being able to \u201craise the rent everyday\u201d only means something if someone actually rents the room", "replies": [{"id": "i8b7261", "text": "Yeah you can say that about any form of RE that is rentable.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i8atnpi", "text": "Hospitality. Reprices every night", "replies": [], "depth": 1}, {"id": "i9vsrti", "text": "No one said the obvious answer here. \n\nLand. \n\nTrying to buy as much land as I can possibly find right now at the moment", "replies": [], "depth": 1}]