Regarding Blackstone’s purchases, I’m not familiar with the details of those properties so I couldn’t comment on that. However, I will say this: A lot of Japanese money got lost here in California during the last RE market downturn because they misread the long term trends and vastly underestimated how high vacancies can go. I think the same thing can happen this time.

When a purchase is based on an income from a building that only barely covers debt service at the peak of the market, then what’s going to happen if the biggest tenant goes BK as a result of not being able to sell enough homes? Further, what happens to rental rates when the vacancies exceed 25%? You can bet that’s not going to result in a soft landing.

The so-called NNN investors are some of the same people who were flipping tract homes in new subdivisions. They have both the same mentality and the same lack of understanding of how markets can fluctuate. Same stupidity, except they’re working with commercial brokers (who absolutely should know better) rather than residential brokers.

Almost half of the “better” jobs created during the last 5 years are related to an industry (RE) that is getting hammered. I guarantee that’s going to have an effect locally on the businesses that were selling non-essential goods and services to all those people. That will trickle down to the RE those businesses are in, too.