From the Desk of CF Capital: August Investor Report

Hello Friends and Investors,

The last month has been quite eventful in our country and across the world. As the 2024 U.S. presidential election approaches, we expect tensions to remain high. In July, President Trump miraculously survived an assassination attempt, and President Biden decided to drop out of the race, with VP Kamala Harris emerging as the presumptive Democratic nominee. Meanwhile, the Federal Reserve hinted at potential rate cuts in September, leading to a decline in treasury yields following revised economic data. Are we on the brink of a soft landing, or is a hard landing more likely as recession expectations rise?

In addition to these domestic developments, global conflicts in the Middle East, Eastern Europe, and South Asia are intensifying, fueling fears of broader geopolitical tensions. As investors, it’s crucial to stay informed without becoming overwhelmed or pessimistic, especially with many events beyond our control.

These factors impact our portfolio management and short-term growth strategies. However, our focus remains firmly on the long term, and these current events are just that—current—and they too shall pass. Our North Star continues to be investing for the long term and managing through short-term noise. During both good times and bad, we aim to find opportunities where we can identify and drive value.

We’ve been saying that the current multifamily market in our region presents a “window of opportunity” to acquire attractive deals at a compelling basis—below replacement cost and well off the historic highs of recent years. Now, we are assessing whether this window will expand, prolong, or retract. With rates potentially declining, the market could become more conducive to transactions, which have largely stalled over the past year. However, this could also reignite irrational exuberance, driving pricing and cap rate compression, trends that have eased since mid-2022.

We remain nimble and prepared for either scenario, maintaining our long-term perspective while avoiding the trap of short-term volatility. Long-term trends are our calling card, and partners like you resonate with this approach, knowing that it’s impossible to “outsmart” the market consistently.

For investors on this journey with us, thank you for your continued trust in our team to steward your capital. We are committed to elevating our performance for your success. For those considering joining us, we would be honored to discuss your goals, the current market conditions, and future opportunities.

Here's to wishing you a great month as the kids head back to school and routines return!

In Partnership,
Tyler & Bryan

PS. There's no higher compliment than you referring us to your friends, family, and colleagues. We'd be honored by the opportunity to become a part of their trusted networks. Share your experience investing with CF Capital & invite others to become an investor here.