Fortress Investment Group’s Post

🚡 Momentum continues for Texas and Dallas becoming powerhouses of the global economy, and a formidable finance capital in the US. On the heels of SpaceX and X's announced move to Texas, a recent article from leaders Fortress Investment Group highlight their involvement in the founding of the Texas Stock Exchange (TXSE) along with several other founding members including BlackRock Citadel. 🚡 🏦 TXSE aims to transform Dallas into the new capital of capital. This innovative exchange promises to deliver commercial benefits and a competitive alternative to NYSE and NASDAQ, prioritizing retail investors and lowering fees for all. 🏦 🐂 Dallas is emerging as a prime investment hub, and here’s why: 🐂 💡 Business-Friendly Environment: 💡 Texas offers a supportive climate for businesses, free from onerous taxes and regulatory hurdles, making it a top destination for corporate relocations. 💵 Economic Strength: 💵 Texas boasts the world’s eighth-largest economy and is the number one job creator in the U.S. Over the past five years, more corporate headquarters have relocated here than any other state. 🐴 Financial Sector Growth: 🐴 Dallas has surpassed New York in financial and banking sector employment, with major firms like JPMorganChase, Charles Schwab, Goldman Sachs, and Wells Fargo expanding their presence. 👑 Fortress Investment Group’s Commitment: 👑 Fortress has chosen Dallas as its co-headquarters, recognizing the city’s unmatched combination of professional opportunities and quality of life. With significant local investments, including in the Texas Stock Exchange, Dallas is poised to become a dominant financial center. 🚀 Innovative Projects: 🚀 Companies like MP Materials and Mammoth Freighters have chosen Dallas for their groundbreaking ventures, further establishing the city as a key player in the global economy. 🌎 Dallas, with its business-friendly environment and booming economy, is poised to become a dominant financial center. 🌎 https://lnkd.in/eWnksmb7 #dallaseconomicstrength #texasfinancialhub

Starwood Capital Group's Barry Sternlicht made billions of dollars buying depressed real estate on the cheap and profiting on the rebound. Now the 63-year old executive is facing an exodus of investors from one of his firm's flagship funds, Starwood Real Estate Income Trust, which could force it to sell property at a discount into a distressed market. On Thursday the $10 billion fund sought to substantially close the window on investor redemptions in a move that may stop the run, but could bruise its reputation, according to experts. "It will definitely be a challenge for them going forward." said Matthew Malone, speaking of future fundraising efforts. "The market generally has a short memory, but this type of thing will not be quickly forgotten." It's a reversal of fortune for the billionaire Sternlicht and shows how higher interest rates, falling values, and souring investor sentiment have created a complex stew of questions in the commercial real estate market that have confounded even industry veterans. Those who know Sternlicht said he'll weather the crisis. "If I had to pick a guy who's likely to work his way through, I think Barry would be the guy," said Jonathan Mechanic. Read the story at Business Insider: https://lnkd.in/eGQ4aBAG #commercialrealestate #distress #interestrates

As more publicly traded REITs underperform, they become targets for investors seeking a quicker return on their investments. This has been evident with Equity Commonwealth, a small commercial REIT that faced a proxy battle with Jonathan Litt's investment firm, Land & Buildings. A similar scenario is unfolding with Texas-based shopping center REIT Whitestone. Last month, investor Bruce Schanzer and his firm, Erez Asset Management, called for Whitestone to accept an acquisition offer from Fortress Investment Group. Although the board initially rejected the offer, Schanzer publicly criticized the decision, posing several scathing questions to the management team. “Why should Whitestone remain an independent public company, with all the attendant costs, when 'excess' G&A expenses (public company and standalone corporate costs well above other shopping center REITs) are, we estimate, approximately $7-8 million per year and drag earnings down by roughly 15 percent per year?” he asked. He also challenged the company's assertion that its value is higher than the buyout offer: “Presumably, management and the Board feel the intrinsic value of the Company is even higher than the price at which Fortress was prepared to transact. If that is the case, why haven’t you prioritized investing the Company’s capital, or your personal capital, into Whitestone’s undervalued stock?” Additionally, he questioned the composition of the board: “If you were organizing a shopping center REIT like Whitestone today and picking a group of trustees to oversee the strategy and execution of such a business, would you again select a lawyer, a PR professional, an energy executive, an investment banker who specializes in bankruptcy, and a former politician? Why wouldn’t you want at least a few people who have substantial experience owning and operating a portfolio of shopping centers and/or managing a public REIT among those trustees?” Much like Jonathan Litt, Schanzer’s firm owns around two percent of the equity in the REIT. Schanzer also aims to leverage his influence over other investors to force changes on the company’s board. Although neither of these bids has been successful so far, if REITs continue to underperform, we will likely see more activism from investors. If one of these efforts succeeds, it could inspire more investors to seek ways to recover their investments from struggling REITs.

Since Starwood Real Estate Income Trust Inc. lowered the capacity under its share repurchase plan beginning with May 2024 redemptions, other top NAV REITs have seen a surge in monthly redemption requests. This is according to an update by Robert A. Stanger & Co., Inc., regarding nine of the 10 net asset value real estate investment trusts in its research coverage universe. Robert A. Stanger & Company, Inc. Starwood Real Estate Income Trust Ares Management Corporation Blackstone Brookfield Real Estate Income Trust Fs Credit Real Estate Income Trust, Inc. Hines JLL Income Property Trust Nuveen, a TIAA company KKR Randy Sweetman Michael Covello, MBA #alternativeinvestments #StarwoodRealEstateIncomeTrust #SREIT #REIT #realestateinvestmenttrust #Stanger #sharerepurchaseplan #redemptionrequests

Fed’s Pivot Sucks Wind From The Sails Of Dry Powder Bargain Hunters Depending how you look at this, the glass is both half full and half empty. The good news is that the capital markets are beginning to loosen driving more deployment of capital into market acquisitions. As far as distressed opportunities, there are still going to be discounted opportunities just generally not as deeply discounted and less volume. In 2008 during the Financial Crisis, I shifted my focus towards distressed debt and asset acquisitions for the next 4-5 years. With the market being inflated over the recent years, I have started to work on getting back into this space to some degree in order to find more upside for investors and developers. #distresseddebt #distressedrealestate #reo #npn #distressedcre #investmentrealestate #visionproperties

https://lnkd.in/d2wDaR3E After reflecting on this years Berkshire Hathaway AGM and Markel Brunch. 𝐇𝐞𝐫𝐞 𝐚𝐫𝐞 𝐚 𝐟𝐞𝐰 𝐭𝐚𝐤𝐞𝐚𝐰𝐚𝐲𝐬 𝐚𝐭 𝐭𝐡𝐞 𝐭𝐨𝐩 𝐨𝐟 𝐦𝐲 𝐦𝐢𝐧𝐝 With Warren Buffett preparing to step back, Greg Abel’s increasing prominence underscores a major shift, a bet on Berkshire is now, more than ever, a bet on Greg Abel's ability to maintain its culture and effectively allocate capital. Warren Buffett was clear, capital allocation decisions will be that of Abel, stating, "𝐈 𝐭𝐡𝐢𝐧𝐤 𝐭𝐡𝐞 𝐫𝐞𝐬𝐩𝐨𝐧𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐲 𝐨𝐮𝐠𝐡𝐭 𝐭𝐨 𝐛𝐞 𝐞𝐧𝐭𝐢𝐫𝐞𝐥𝐲 𝐰𝐢𝐭𝐡 𝐆𝐫𝐞𝐠. 𝐓𝐡𝐞 𝐫𝐞𝐬𝐩𝐨𝐧𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐲 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐰𝐢𝐭𝐡 𝐦𝐞... 𝐛𝐮𝐭 𝐈 𝐭𝐡𝐢𝐧𝐤 𝐭𝐡𝐞 𝐫𝐞𝐬𝐩𝐨𝐧𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐲 𝐬𝐡𝐨𝐮𝐥𝐝 𝐛𝐞 𝐭𝐡𝐚𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐂𝐄𝐎." Berkshire Hathaway's cash reserves have seen a increase to $188.99 billion from $167.6 billion at the end of 2023. Buffett warned this number will likely continue to grow. "Our cash and Treasury bills were $182 billion at the quarter end, and it’s a fair assumption that they’ll probably be at about $200 billion at the end of this quarter." In line with his maxim, "𝐖𝐞 𝐨𝐧𝐥𝐲 𝐬𝐰𝐢𝐧𝐠 𝐚𝐭 𝐩𝐢𝐭𝐜𝐡𝐞𝐬 𝐰𝐞 𝐥𝐢𝐤𝐞." On the topic of why he hasn't actively sought new investment opportunities despite the substantial cash reserves, Buffett clarified, "We don’t use it now at 5.4% but 𝐰𝐞 𝐰𝐨𝐮𝐥𝐝𝐧’𝐭 𝐮𝐬𝐞 𝐢𝐭 if it was at 1%. Don’t tell the Federal Reserve." In this sense, 𝐁𝐞𝐫𝐤𝐬𝐡𝐢𝐫𝐞 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐚 𝐛𝐞𝐧𝐞𝐟𝐢𝐜𝐢𝐚𝐫𝐲 𝐨𝐟 𝐢𝐧𝐜𝐫𝐞𝐚𝐬𝐞𝐝 𝐫𝐚𝐭𝐞𝐬. Similar to Berkshire, Markel focuses on enhancing shareholder value through capital allocation. In 2023, Markel escalated its stock buybacks to $445 million, up from $291 million in the previous year, prioritizing buybacks over dividends. Thomas Gayner elaborated on this in his 2023 shareholder letter, stating "If we paid out our earnings in dividends, you as a taxpayer would have to pay tax on that income before you could reinvest it. Our structure and approach allow us to reinvest after-tax earnings rather than after tax, after second tax earnings." This directly parallels Warren Buffett’s view at Berkshire, where he famously regards their one-time dividend in 1967 as a "𝐭𝐞𝐫𝐫𝐢𝐛𝐥𝐞 𝐦𝐢𝐬𝐭𝐚𝐤𝐞." Under Tom Gayner’s leadership, Markel three-engine strategy—insurance, investments, and privately held businesses, seems to be working well. In my view Markel Ventures, led by Andrew Crowley, is the pivotal growth engine opportunity within Markel. This division distinguishes itself through minimal debt usage and a commitment to hold investments indefinitely, diverging from standard private equity practices.

Elevate your real estate investing knowledge by attending our webinar on 1/30. Advanta IRA’s Scott Maurer welcomes guests Sapan Talati, Denver Lobo, and Deepa Aklua of JT Capital, who share their expertise on real estate investing strategies and trends, with a focus on multifamily property. Scott covers using self-directed real estate IRAs to invest in these assets to build retirement wealth. This is a “don’t miss” webinar if you want to implement real estate investing in an IRA this year. Register today: https://lnkd.in/eT3jhsy4 #realestateIRA #multifamilyinvestments #realestateinvesting

In my session titled "REIT Portfolio 201: How To Position" at the recent Seeking Alpha Investing Summit, I shared with Rena Sherbill that consumers use #REIT owned properties every single day of their lives without giving thoughts to where interest rates are headed, what the 10-year treasury rate is doing today or who is in the White House. I emphasized the importance to focus on the long-term fundamentals of REITs and the dividend income stream that these investments provide. If you are interested in seeing the recent Hoya Capital presentation, feel free to send me a message! https://lnkd.in/gZG5fTpZ

"Planting seeds for future wealth. 🏡💰 #PropertyInvesting #FinancialFreedom" "Building my empire, one brick at a time. 🏰💼 #RealEstateGoals #InvestingEarly" "Turning dreams into addresses. 🌟🏠 #HomeownerJourney #InvestingInMyFuture" "Investing in property today for a brighter tomorrow. 🌅💼 #FutureWealth #RealEstateVentures" "From aspirations to acquisitions. 🏡💸 #PropertyInvestor #DreamsToReality" "Creating wealth through real estate, one key at a time. 🔑💼 #BuildingMyPortfolio #PropertyPassion" "Unlocking doors to financial freedom. 🚪💰 #RealEstateInvestor #InvestEarly" "Planting roots for a prosperous future. 🌱🏠 #InvestInProperty #LongTermWealth" "Investing in bricks and mortar, building a legacy. 🏰💼 #LegacyBuilder #RealEstateInvestment" "Investing in property: where dreams meet dividends. 🏡💸 #DreamBig #PropertyPortfolio"