§ 01
| Cycle Phase | Characteristics | Investor Action |
|---|---|---|
| Recovery | Rising occupancy, flat rents, no new construction | Accumulate — best risk/reward |
| Expansion | Rising rents, new construction starts | Hold — enjoy appreciation |
| Hypersupply | Too much construction, vacancy rising | Reduce — supply/demand imbalance |
| Recession | Falling rents, rising defaults, no new starts | Wait for distress opportunities |
§ 02
Real estate cycles are long — typically 18 years peak-to-peak. Construction lag is the key driver: it takes 2–3 years to build, so supply responds slowly to demand changes, creating persistent boom/bust dynamics.
§ 03
Check REIT sector performance in **Fundamentals**. Compare industrial REITs (strong post-COVID) to office REITs (struggling). Different property types can be in different cycle phases simultaneously.
§ 04
New office construction is booming while vacancy rates are already rising. Which cycle phase is this?
§ 05
§ 06
Office REIT prices dropped 40% in 2022-2023. Industrial REITs gained 15% same period. Why did real estate 'as an asset class' split?
Five questions · AI feedback
Sit with the ideas.
In mid-2022, the Fed began raising rates aggressively. Office vacancy rates were already rising due to remote work. Which phase of the property cycle best describes the office market, and what would you expect for office REIT valuations?
Why: