A Slippery Slope

I’m on a bit of a slippery slope here. I take pride in producing a weekly blog almost without fail for the past 12 years. There are times when I am scratching my head for ideas or not feeling super inspired to write. My fallback in those cases is to usually turn to a potpourri of charts, graphs, and tables to convey what I think are important economic and financial trends to be monitoring, which may impact one’s decision-making process when it comes to making or exiting investments. The real work is curating which visuals to use as there is not much writing involved except to introduce the blog and provide context for the various charts.

I have fallen back to the pictorial approach for the last couple of weeks and I don’t feel like the return on doing more of this for this week is very high. I’ve written ad nauseam about tariffs and my concerns that we could have a man-made type of Covid event by crushing the global supply chain. It’s akin to the impact of the huge destruction that took place last week at a vital Iranian port when improperly stored chemicals used for Iran’s missile program detonated and led to an incredible conflagration that destroyed most of Iran’s most important port. In our case we have the idiocy of Peter Navarro influencing Trump to potentially have the same impact on our trading system.

I read an insightful observation that someone had about Trump.

He pointed out that Trump hates institutions and does nothing to nurture and support them. He’s a disruptor and has no problem breaking established norms if he doesn’t agree with them. This is what he’s doing with the global trading system, or potentially may do. Perhaps I’ve been too much in the doomsday camp because last week there were signs of thawing between China and the United States so maybe it will work out just fine. Only time will tell.

So what’s the slippery slope?

I was feeling a bit at a loss in terms of what to write about and my time was limited to do some deep research on a topic that I was curious about. So what did I do? I turned to ChatGPT to do the work for me. And this is what makes me a little concerned. As you will soon see, the output was decent and much better than what I could have produced particularly given my time constraints, especially since it generated the output in less than 15 seconds. My concern is that I become reliant upon it for much of my future output. And just as I was wrestling with this I saw a post on LinkedIn from a content creator who shared with her readers how dependent she now is on ChatGPT for her work and the 10 prompts she can’t live without that she uses to aid much of her writing. I will be sure to put some of her prompts to the test.

Writing has been vitally important to me during my 38 years at CWS.

It has helped me gain clarity and been an invaluable discipline for me to put my thoughts in writing to convey why we are taking the actions we’re taking or avoiding other ones. It also feels good to start with a blank page and produce something that may help others, cannot be manipulated via hindsight bias as it reflects in the moment concerns, thoughts, and choices all subject to fear, greed, bias, and potentially muddled thinking. My writings can serve as a decision making scorecard as well as a diary of my life so pushing it to the side and letting A.I. assistants do more of the heavy lifting is something that is a big deal for me and I have to be cognizant of the potential ramifications of letting my writing muscles atrophy. Even after expressing such concerns I have now written approximately 625 words so all is not lost.

The topic I was interested in and one that is a logical use of ChatGPT because it is more research and regurgitation versus deep analysis, which I hope to not shy away from in the future, relates to key trends among apartment REITs. I wanted to see if what they’re experiencing corroborates with what is happening in the world of CWS. 

I asked ChatGPT the following: Can you provide a summary of key trends impacting multifamily REITs based on their most recent earnings call transcripts?

Here is what ChatGPT produced

Based on the most recent Q3 and Q4 2024 earnings calls and reports, several key trends are shaping the multifamily REIT sector:

📈 Rent Growth & Market Performance

• Moderated Rent Increases: Rent growth continues, particularly in Sunbelt and secondary markets, though at a more moderate pace compared to the surges seen in 2021–2022. Matthews™+1Breit+1
• Urban Market Challenges: High-cost urban areas like New York and San Francisco are experiencing slower rent growth and increased tenant turnover, as renters seek more affordable options. Matthews™

🌍 Geographic Shifts

• Sunbelt Expansion: REITs such as AvalonBay (AVB) and Equity Residential (EQR) are increasing their presence in Sunbelt markets, targeting areas like Atlanta, Dallas, and Denver due to favorable demographics and reduced regulatory risks. Jay Parsons+1Futubull+1
• Portfolio Rebalancing: Strategies include selling assets in coastal regions to reinvest in high-growth markets, aiming for a balanced portfolio between urban and suburban locations. Futubull+1Jay Parsons+1

🏗️ Supply & Development Dynamics

• Supply Constraints: While new apartment supply is limiting rent growth in some markets, REITs anticipate that demand will support rent acceleration in the coming years. S&P Global+1Moomoo+1
• Development Focus: Companies like Camden Property Trust (CPT) are initiating new projects, with plans to commence approximately $695 million in developments across 2024 and 2025, focusing on high-demand suburban markets. Moomoo

💰 Financial Performance & Capital Management

• Stable Dividends: Many multifamily REITs have maintained or slightly increased dividends, appealing to income-seeking investors in a high-interest-rate environment. Matthews™+1Matthews™+1
• Operational Efficiency: Efforts to improve operational efficiency, including cost control measures and technology adoption, have helped maintain or grow margins despite economic challenges. Matthews™+1Matthews™+1
• Strategic Acquisitions: Equity Residential led the industry by acquiring 14 properties totaling 4,418 units, valued at $1.26 billion, aligning with their strategy to focus on expansion markets. Matthews™+1Matthews™+1

📊 Financial Snapshot of Select Multifamily REITs

Prices and changes are as of May 2, 2025.

All in all I think the output was reflective of industry trends which is not surprising because it gathered its bullet points from knowledgeable industry analysts. It’s a good overview and given how quickly it generated the output for me it was such a higher return on time than if I spent all of the time doing my own research and putting the report together.

I am eager to dive more deeply into what A.I. assistants can do while not losing my writing muscle. It’s been too important, and valuable, part of my life to let it atrophy. We’re in a brave new world where we want to use the best of what A.I. has to offer without losing our humanity and continuing to do those things which inspire us, generate energy, and make us feel alive. I’m declaring myself up for the challenge.