Billions And Billions Pouring In, But Where Is The Real Exit?

 

Don’t we all want to know?

You invest time effort and money into a project, deal or, since we are all in #CRE how about a building.

And for most of us, we generally have a clear idea of when those payouts are going to happen.

If it’s say, a lease deal, we can track the entire process and as most of have completed hundreds over the years we can just about bank on when we make bank, (yea I went there.)

A building or asset is pretty much the same. From discovery all the way to close. There are always a few bumps here and there and then at the end $$$.

Standard stuff, It’s what we do every day and it fuels and sustains an asset class worth Trillions.

Ok, so yea great Duke you say we get it, getting paid the way we always have. So what in the hell are you going for here?

Well, good question but there is a question that I get more and more and then more and more from all over the world.

“Hey, Duke, with all this investment coming into #CRE and #Tech who is going to buy these companies and give all those investors a return?”

Pretty straightforward question and it usually comes from someone who’s job or livelihood is based in real estate and NOT tech.

In other words “when in the hell do the investors get paid?”

And my answer to this point has been……Maybe NEVER!

You and I see it almost every day. $2 million here $10 million there $30 million for fun and sometimes $100 because they can.

If some of those numbers seem at sometimes to be a bit outrageous and absurd to you I can understand why. It’s because they are just that to a certain point.

I heard this snippet of a conversation recently in Europe.” what the bloody hell do they do with all that money?”

In fairness to the companies and the people investing in them, they are trying at the most basic level to improve, change, and create efficiencies in a marketplace that has, for the most part, had none of the above applied…ever!

Now some of you might say, “steady on man, (I’m in a British mode for some reason lately, wait, let me use the word whilst..there I’m over it) we’ve had a very robust and frothy market for quite some time and are doing quite well thank you.”

Again a fair enough statement, and I could go on about how and when the market for #CRE tanks and it will in some form or another, that the companies that have all the $$$ and the most traction will survive and thrive. Not an original thought by any standard.

Let me throw you a bit of context so that when you are at that holiday #CRE mixer this year you can sound like you really know your tech shit and maybe get an extra drink pushed your way. (See how I just give and give and give!)

Here it goes. Most of these companies are trying to solve the same problems. The same problems that have either not needed addressing in the past or that now because of the SaaS model have allowed data and the use of it in a way not previously available to create new values or at least the perception of value.

Yea reread that and throw that one out with a couple of drinks under your belt. Kick back and think for a minute, the creation of new values or at least the perception of. Hmm, deep shit right there.

When you lay that out there, it looks to be an opportunity that is at the very least worth making a bet on. You noticed I said making a bet because that’s what the investors in the companies going after #CRE are doing they are betting they have found one of the companies that will indeed do what I just stated, created new or at least the perception of value.

If you combine that with companies that have created revenue in realistic proportion to their valuation, with a strong #CRE customer base and firm long-term partnerships with those same customers, you my good friends have indeed found a real winner.

So back to the original question, who then buys those companies?

Simple, look at the financial markets. They are years and years ahead of us. Look at how they are changing and adapting to their marketplace. Think about how they continually push and push almost always to the edge and then some.

Who owns the assets?

Who owns the data?

Who owns the media?

Who owns the exchanges?

Who owns the real value… of the financial markets?

Ask yourself the same questions, just put #CRE after each question.

It starts to become a bit clearer does it not.

Owning not betting, ok maybe betting some too but owning, that’s who to push your chips towards.

And what happens to all the investors who did not pick/bet on the right company/idea/team/…whatever. They lose, just like they should!

 

+1 Welcome to the…

+1+1 Hey, Tony, Do You Know Where The Fuck You Are? You’re In The Jungle Baby, You’re Gonna Die!

 

 

 

Duke Long

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