🗞️ News & Moves 🏠

Bitcoin’s brushing $100K, stocks riding high on Trump’s deregulation hype, and geopolitics stirring up oil—markets are doing anything but chilling this week.

Bitcoin Breakout: BTC’s closing in on $100K, fueled by crypto-friendly vibes from Trump’s election.

Rumor has it, a “crypto czar” might be in the mix. Big deregulation energy.

Stock Market Bounce: S&P 500 and Nasdaq rallied post-election, even as Nvidia’s earnings drama cooled off.

Housing Pinch: Mortgage rates creep up again—30-year fixed now 6.84%.

Geopolitical Tensions: Ukraine-Russia conflict pumps oil (+2%) and gold (+0.8%). Safe havens are shining.

Musk and Ramaswamy want federal workers back at their desks—five days a week. Love it or hate it, this bold move could reshape the office situation.

Back to the Office: Musk and Ramaswamy, leading Trump’s spending task force, are pushing for a full return to office for federal employees.

Their goal?

Trim the workforce and boost accountability.

Economic Ripple: A five-day office mandate could breathe life into the office meltdown.

Union Showdown: Expect heated resistance from government employee unions, many of whom had telework deals long before COVID.

Big questions ahead: Will this revive downtowns or just spark worker exodus?

🚨 The Fed Pulse 🚨

📉 Flat Economic Trends: The U.S. economy remains in a "flat period," with housing permits and existing home sales soft but stable.

Automobile production shows slight improvement, reinforcing expectations of recovery in late 2025.

✅ No Immediate Threats: Leading indicators show no signs of an imminent economic downturn. This suggests the Federal Reserve won’t need drastic interventions.

📊 Rate Cut Speculation: Markets are split—56% see a potential December rate cut of 25 basis points.

However, timing may be less critical as broader market rates, like the 10-year yield and mortgage rates, stay high despite Fed moves.

🚫 Bond Market Pushback: Unlike past cycles, bond yields haven’t followed the Fed’s rate cuts.

Instead, persistent inflation concerns over the next 15–18 months are keeping rates elevated.

DEEP DIVE

We went from half vacant to full in 1.5 years

A year and a half ago, this was losing money, half-vacant, and desperately in need of repairs shopping center - Linden Plaza. 

Today, it’s a different story.

Let me take you back to April 2023.

That’s when my partners Rafik Moore, Slava Menn, Jaime Contreras, and I bought a shopping center in Lindenhurst IL that had seen better days.

On paper, it didn't look exciting: 48.5% occupancy, $162K in net operating income (NOI), and an asking price of $7.9 million—an obvious no-go.

But we saw what it could be, not just what it was.

After some masterful negotiation by Rafik, we brought the price down to $4.2 million and closed the deal in June 2023.

Let’s talk numbers and the potential of this property:

83,000 square feet on 5.7 acres in affluent Lake County, Illinois, with 21,000 vehicles passing by daily.

The one-mile average household income is $122,000, and the county average is $130,000.

But despite its location and demographics, this property had been neglected for years.

After we bought it, we rebranded it, Lindenhurst Center, and in just over a year, the transformation has been nothing short of dramatic.

Here’s how we did it.

Start with the Basics

Step one: Fix what’s broken.

We repaved the parking lot and gave the building a fresh look by repainting it.

Next, we upgraded signage with two monument signs.

We also white-boxed the vacant units.

White boxing turns vacant, dingy spaces into blank canvases for businesses.

These changes communicated that things finally happening here.

Leasing

We didn’t just rely on brokers to fill these spaces.

We even didn't hire an exclusive broker.

But, we worked with and marketed to leasing brokers.

And we marketed ourselves directly through Facebook, LoopNet, Crexi, etc.

We also heavily relied on community outreach.

As soon as we closed, we asked the community for feedback - what they see in the center and what they're looking for.

The response was incredible.

We also held several community events, like the Christmas Season Event and Artisan Market, which earned us a lot of goodwill and many leads.

To make a long story short, we've added 12 new tenants in a little over a year, including:

• Ace Hardware (our anchor tenant, 22K sq ft)

• Axe Throwing Place

• Karate Studio

• Salon Suites

• Liquor Store

• Dance Studio

• Damashkey Cuisine 

• 3Legged Coffee Brewery

• Sammies Restaurant  

• The Links Golf and Sports Bar

• Subway

• Lucia’s Taqueria

Budgets, Timelines

Here’s where things get real.

Our original CAPex budget estimate was $1.3 million, but now we expect it to be around $2 million.

Additionally, We estimated $1.3 million for tenant improvements, and we're still on track to meet that figure.

With these updates, we expect to exceed the budget by over $700,000, which is not unusual for our projects.

As I've mentioned before in previous newsletters, we often underestimate the time it takes to renovate and end up exceeding our budget projections.

On the bright side, we almost always find that we can lease the renovated spaces for higher rates than we initially expected.

This higher NOI often forgives optimistic timelines and shortfalls in budget.

Refinancing:

I'm happy to report that we refinanced last week with Old National Bank at 6.52%.

The bank structured our loan so that we could cash out our equity once all tenants move in.

I'll write an updated newsletter in Q2 next year when stabilization is 100% completed.

Today, our trending NOI is $855K.

This will be our in-place NOI after ACE and the other tenants finish moving in and start operating.

Not so shabby!

In under two years, with less than $4 million in improvements, a dream team, and hard work, we increased NOI from $162,000 to $855,000.

That’s the magic of commercial real estate.