Assertion Not checkable as stated
Khoury: 80% of Pod Hedge Fund Returns Arrive Around Quarterly Earnings
“80% of the returns of these pods are generated on quarterly earnings or the day after quarterly earnings, which means they are looking out for one quarter.”
Prediction Not checkable as stated
Khoury: AI Office Vacancies Will Eventually Dwarf AI Tenant Demand
“That space that AI tenants are taking will be dwarfed by the magnitude of vacancy that they create over time.”
Prediction Not checkable as stated
Khoury: Sunbelt Apartments Due for Rent Surge as Ratios Hit 19%
“Rent to income in the Sunbelt Has been going lower and lower and lower every year. So once you get back to equilibrium, we're of the view that it's not going to be, oh, we're back at equilibrium. We're going to grow a little bit. You're back with equilibrium. …”
Insight
Khoury: Buying Distressed Real Estate and Waiting for Recovery Is Dead
“If real estate went down, you could buy it and just wait, and generally it would come back over time, and that's certainly not true anymore.”
Assertion Supported
Khoury: REIT Price Movements Are Now Double Long Pond's Early Years
“When we launched the fund, the first three years of the fund's existence versus the last three years of the fund's existence, the average move in the REIT space is literally two X today than it was then.”
Opinion
Khoury: Hotel REITs are poor businesses because they are price takers
“There are hotel REITs, which in our opinion are not great businesses. They're generally price takers.”
Assertion Partly supported
Khoury: REITs Trading at 125% of Net Asset Value Is Now Normal
“If a REIT traded at 125% of NAV, That was Wall Street Journal News. Today, it's the norm.”
Opinion
Khoury: Better Data Center Investments Are Private, Not Public
“Data centers, they're one place in real estate where the better opportunities are in the private.”
Disclosure
Khoury: Sunbelt Apartment REITs Trade at 25% Discounts to Private Value
“And the Sunbelt apartment REITs, which in aggregate are the largest exposure of the fund today, we're buying these companies at six and a half to seven percent implied cap rates, while the private market is close to five, five and a quarter, in 25, 30% discoun…”
Opinion
Khoury: Cold Storage REITs Trade at 50 Cents on the Dollar
“Today, the company trades at, we believe, around 12 times free cash flow. Its competitor, AmeriCold, we believe trades a couple turns lower than that. We think good longer term businesses that are probably trading at 50 cents in the dollar to replacement cost …”
Assertion Supported
Khoury: Six public real estate companies recently sold to private buyers at large premiums
“The output of that is in the last short period of time, we've seen six public processes for sales of real estate companies to the private market, all of which seem to be happening at Large premiums”
Insight
Khoury: Niche REIT subsectors have decreased correlation across real estate
“The second thing that's happened is, as the public market has proven to be an efficient place to own and hold assets, more and more sub-sectors have come to the public markets. Data centers, towers, cold storage REITs, single family for rent REITs, gaming REIT…”
Assertion Supported
Khoury: Hotel Franchises Grow Earnings 15% Annually While Hotel REITs Stagnate
“These business models, you've got RevPar, you've got net unit growth, then with a little bit of operating and financial leverage and share repurchase, you're growing earnings, 15% a year, compared to the hotel REITs basically growing, not at all, or in some ca…”
Insight
Khoury: Cash-Generative Share Cannibals Become Cheaper If Their Stock Stays Flat
“In the best instances, these are companies that are generating material amounts of free cash flow and shrinking the float so that as time passes, if the stock's flat, it's getting better and it's getting cheaper.”
Insight
Khoury: Market Panics Indiscriminately Depress Good and Bad Cyclical Stocks
“Cyclical securities got hammered across the board, good and bad ones. Our experience is often, they all go down at a similar level in those periods of time, so you get a chance to buy the really good ones at great prices.”
Insight
Khoury: Passive Capital Inflates REITs Paying Unsustainable Dividends
“If you've got a significant amount of passive capital, which the REIT market now does, and a passive capital doesn't really care about anything, oftentimes securities can trade at levels that are higher than they otherwise would be because they're paying divid…”
Disclosure
Khoury: Long Pond sizes top long positions up to 12%
“We run with 12% positions. We don't do it all the time. It's reserved for special situations.”
Opinion
Khoury: Jury Is Out on Terminal Value of Data Center Assets
“The jury is out on what terminal value of these assets will be.”
Assertion Partly supported
Khoury: New Supply Starts for Sunbelt Apartments Dropped 60% to 70%
“So the output of that is in these secularly winning real estate asset classes, Sunbelt departments, industrial, and self-storage, that supply starts are down, depending on market subsectors, 60, 70%.”
Assertion Supported
Khoury: Office buildings consume 25% to 30% of income in capex
“25, 30% of the income from an office building is going into repairs, maintenance, capital expenditures on a recurring basis.”
Prediction Not checkable as stated
Khoury: Institutional Investors Will Adopt Actively Managed ETFs
“Our view is that institutional investors will adopt actively managed ETFs.”
Assertion Supported
Khoury: Real Estate Is the Only S&P Sector Down Since 2022
“You're talking to somebody who's investing in the only GIC sector in the S&P that's still materially down since 22. The GIC and REITs is down almost 20%, while the S&P is up 40. We've now, since the beginning of 22, underperformed the S&P by 60%. I believe the…”
Assertion Supported
Khoury: 90% of US Real Estate Is Privately Owned
“90% of real estate in this country is owned outside of the public market. So you've got 10% of the market that trades publicly.”
Disclosure
Khoury: Long Pond Evaluates Investments on Two-Year IRR Paradigm
“We look at everything through a two-year IRR paradigm.”
