The war in Ukraine has dominated the headlines for many months. Since February 2022, nearly 9 million Ukrainians have fled their country, and tens of thousands of civilians and soldiers have died. My guest today, Denis Buyanov, has lived through the sirens, explosions, and tragedies that come with war. During this episode, he openly shares his experience of leaving Kyiv, returning to Kyiv, and being separated from his family. He thinks of himself as one of the lucky ones in comparison to so many of his fellow citizens; however, his story is an incredible display of the strength and resilience of human beings. Although we delve quite deep into his personal story, since this is a real estate podcast, we of course also get into his take on real estate in times of war, including the approach he took as a landlord.

Key Points From This Episode:

[01:28] - Episode Overview

Kyle returns to the podcast world with an episode about what is globally one of the most noteworthy topics right now: the war in Ukraine. Kyle and his returning guest, Denis Buyanov discuss this topic from both a personal and a real estate perspective.

SURVIVING THE WAR: THE PERSONAL SEGMENT

[08:55] - Misunderstanding Russia

Denis shares why he, along with many others, didn’t believe a war between Russia and Ukraine would ever happen.

[14:30] - The Day Everything Changed

On the 24th of February 2022, Denis knew he had been wrong about the war. Suddenly, the sounds of sirens and explosions were inescapable and his world was turned upside down.

[18:56] - Leaving Home

Denis and his wife, along with their child, their dog, and her three puppies, attempted to leave Ukraine the day after the invasion began. They packed their cars with their most important possessions and found one of the few routes that were not blocked.

[22:45] - Returning to Kyiv

After 5 hours of driving, Denis realized they weren’t going to be able to make it safely to another city, so they decided to return to Kyiv and move in with their friends.

[25:11] - Difficult Decisions

After 2 days of acquiring information about the war, Denis and his wife decided they needed to leave Kyiv. They went to stay with other friends in Ukraine. They were lucky in comparison to many others but it was a challenging time and after a week they moved back to Kyiv.

[30:52] - Underestimating Ukraine

The Russians thought that overthrowing the Ukrainian government would be an easy task, but they underestimated the power of the Ukrainian people. The conflict in Kyiv escalated and people were being killed on the streets.

[37:18] - Separation

New laws prevented Denis from leaving Ukraine, but with the help of his fellow citizens, he was able to get his family out. He has spent the past few months separated from his family, but their return to Kyiv is imminent.

SURVIVING THE WAR: THE REAL ESTATE SEGMENT

[43:18] - Real Estate In Times of War

From February to June, most commercial and residential landlords did not expect their tenants to pay rent. Now, most rental prices are reduced by up to 50%. As a landlord himself, Denis explains the approaches that he has used with his tenants.

[51:15] - Can the Government Be Trusted?

Denis shares why he is not convinced that people who have lost their houses or their businesses due to the war will receive compensation from the government.

[53:21] - How Different Parts of Ukraine Have Been Affected By the War

Not every city or town in Ukraine has been impacted by the war in the same way. Denis tells us which areas have become overpopulated, why, and how this is affected rental and sales prices.

[01:00:50] - Issues Facing the Construction Industry

Although there is lots of work to be done, finding workers is a major ch

This Kyle’s Take features commentary on the recent performance of Mexican real estate across the residential and commercial spectrum, insights from the interview with Jaime Fasja, poll results, and a preview of the next guest.

00:15 – Introduction
Kyle sets the stage for the episode by describing the context of his surroundings at the Ritz Carlton in Mexico City.

1:28 – BREAKING NEWS

1:32 – Residential Metrics and Drivers
Kyle highlights recent price increases in major Mexican cities that were not only attributed to the pandemic, but also the growth in the middle class and, in some instances, foreign buyers.

3:47 – Economic Decline and Subsequent Rebound
After the Mexican economy plummeted in 2020 to levels not seen since the 1930s, the ratings agencies downgraded the country’s credit. 2021 has offered a brighter picture, however, with GDP up 20% through Q2.

04:27 – Foreign Buyers and Legislation
Citizens of the US, Brazil, and Spain constitute the majority of foreign buyers in Mexico City. In coastal areas, foreign nationals have been able to own real estate via bank trust since a 1993 amendment of investment law.

05:35 – Mexican Lending & Market Statistics
While mortgage rates remain elevated in Mexico, the Mexican Central Bank has made two consecutive hikes in its benchmark rate to address inflation concerns. Industrial activity and the services sector have both flourished this year despite moves by the government that upset investor confidence.

07:23 – Office Performance
High vacancy, a robust new supply pipeline, and tepid leasing activity are projected to weigh on the office market in the coming years, resulting in a tenant-favorable market.

08:48 – Industrial Performance
An improved vaccination campaign, the reactivation of the US economy, stable international trade, and strong e-commerce demand have acted as tailwinds to the Mexican industrial market.

10:17 – Retail Performance
The retail market has shown signs of improvement in 2021, though this progress is occurring at a slower pace compared to other countries.

10:54 – GUEST INSIGHTS

11:03 – Jaime Fasja Commentary|
In Episode 24, Jaime made the following points among others:

1) Thor Urbana capitalized at a very early stage on the reduction in Mexican tariffs on Chinese goods;

2) a new real estate venture can propel itself from obscurity to a $500mm pension fund commitment within a matter of months;

3) Mexican coastal markets feature lodging that is 2x the price compared to inland cities;

4) Thor Urban’s creative structure led to the consummation of the Ritz Carlton deal; 5) the outdoor nature of Thor Urbana’s lifestyle centers helped retain foot traffic during the pandemic.

13: 18 – POLL RESULTS
Kyle reveals the results from his last poll, which was:

When will the major tech companies (Facebook, Amazon, Apple, Netflix, Google) return to office?

1. January 2022 or earlier – 14%
2. February 2022 – 26%
3. March 2022 – 30%
4. April 2022 or later – 30%

The next poll to be featured at kylenaye.com will be:

How long will it take Western European tourist visits to the United States to reach pre-COVID levels?

1. Less than 6 months
2. 6-12 months
3. 1-2 years
4. 2-3 years
5. More than 3 years

14:50 – NEXT GUEST
Kyle provides some closing comments relating to the next guest for Episode 26.

Additional Information
Fideicomiso: https://www.expatsinmexico.com/what-is-the-fideicomiso/

While this episode’s guest, Jaime Fasja, has a family background in real estate dating back 50 years, he crafted his own way to the highest echelons of retail, hospitality, and industrial real estate investment & development across Mexico and the Caribbean. The 180-person firm that he started from scratch in 2012 and now leads as co-CEO, Thor Urbana, owns assets in 20+ locations, primarily consisting of lifestyle retail centers and luxury hotels. Last week, Jaime and his team opened their latest project, the Ritz-Carlton Mexico City, adding to their roster of hotels featuring such flags as Thompson, Montage, and Four Seasons. As you will hear, Jaime has experienced both pleasant surprises and acute challenges since the start of COVID as he navigated temporary mall closures, pandemic safety protocols, leisure travelers from the USA, and new acquisitions. These aspects notwithstanding, Thor Urbana has emerged stronger than ever from the past 20 months and is ready to continue a steep growth path in the years ahead.

0:42 – Episode Overview

05:50 – CAREER FOUNDATIONS: The Ascent of a Dealmaker

06:04 – Family Real Estate Background and Education

07: 48 – Reasons for Business School

08:57 – Mexico’s Historical Lack of Institutional Capital

10:35 – Relationship with Co-Founder Jimmy Arakanji

12:36 – Steps of Creating Thor Urbana

15:22 – Focus on Retail vs. Hospitality

17:52 – Selection of Partners

19:53 – Leveraging Thor Equities Resources

23:12 – Culture at Thor Urbana vs. Thor Equities

25:46 – Co-CEO Responsibilities

27:44 – Expansion into Other Countries

30:23 – Greatest Challenge at the Moment

32:00 – MAKING THE MARKET: A Research Perspective

32:09 – Real Estate Comparison of Inland Cities vs. Coastal Markets

39:25 – Riviera Nayarit News

41:32 – Mexico City Luxury Hotels

46:39 – Mexico City Rate Increase

47:48 – Domestic and International Guests

49:33 – COVID’s Effect on Mexican Lifestyle

52:44 – Lender Discussions During COVID

57:15 – Pandemic’s Effect on Lease Structure

58:43 – Recent Acquisitions Activity

1:02:54 – Deal Competition

1:04:28 – POLITICIANS AND ATTORNEYS: Bureaucracy and Red Tape

1:04:40 – Pending Legislation Affecting Real Estate

1:06:34 – Entitlement and Permitting

1:08:57 – Legal Action for Title Claims

1:10:53 – Property Taxes

1:12:21 – Frequency of Litigation

1:14:50 – FINANCE AND FORMULAS: The Economics Behind the Deal

1:15:28 – Discovery of Opportunity

1:18:34 – Construction Timeline

1:20:21 – Equity vs. Debt

1:21:31 – Choice of Ritz Carlton as Flag

1:23:39 – Fee Structure Negotiation

1:25:40 – Ritz-Carlton Compared to Comp Set

1:27:54 – Unique Amenities & Technology

1:30:47 – Planned Hold Period

1:32:30 – TOURIST IN YOUR OWN TOWN: How to Spend Three Perfect Days

1:32:36 – To-Do List

1:35:26 – First Time Visitor Tip

Go to KyleNaye.com for full show notes and more info.

This episode of Kyle’s Take features coverage of French real estate performance across product types throughout COVID, noteworthy investment projects, insights from the interview with Alon Kasha, poll results, and a preview of the next guest.

00:42 – Paris COVID Protocols

02:02 - BREAKING NEWS

02:11 – High-level residential performance

02:41 – Effect of Stimulus Payments

03:08 – Domination by French Buyers

03:30 – Market Drivers

04:10 – Grand Paris Project

05:45 – Investment Sales Market

07:33 – Industrial Growth from E-Commerce

07:51 – Rebound Expected in Late 2021

08:58 – Investor Sentiment

09:25 – Sources of Capital

10:17 – Outlook for Remainder of 2021

10:56 – GUEST INSIGHTS

11:00 – A “Grey” Market

11:50 – Tremendous Apartment Demand During COVID

12: 32 – POLL RESULTS

14:30 – NEXT GUEST

Visit KyleNaye.com for full show notes and more info.

Little did Alon Kasha know at the time, but the move that he and his wife Betsy made to France nearly 20 years ago led to what is today a thriving real estate development and interior design firm called Kasha Paris. In this episode, Alon sits down with Kyle in the kitchen of one of his recently renovated apartments to describe the creation of this business, as well as how it has evolved over the years. As you will hear, this couple's background in finance and public relations has served them well throughout 100 real estate projects in the tony Saint-Germain-des-Prés neighborhood of Paris. After such prolonged exposure to the local residential market, Alon and his wife have an uncanny ability to gauge the complexity, profitability, and marketability of any prospective apartment purchase. Further, they routinely employ innovative architectural and engineering techniques to produce gems that command millions of Euros from French, American, and other international buyers.

Alon is a dual US/French citizen who graduated from the University of Michigan with degrees in Economics and French. Betsy graduated from Wellesley College with a dual degree in History and Art History.

0:42 – Episode Overview

3:24 – CAREER FOUNDATIONS: The Ascent of a Dealmaker

4:24 – Finance and Luxury PR Lead to Paris

9:39 – Opportunities with Classic Design

10:53 – French vs. American Home Entertaining

11:30 – Business Model Gains Momentum

13:10 – Investor Relationship

13:45 - Move from London to Paris

15:38 – Early Days in Paris Real Estate

17:57 – Appeal of Apartment Features

19:10 – Creation of a Good Reputation

19:38 – Growth in Operations

22:08 – Concierge Services

26:39 – Buyer Pool

27:53 – Typical Sales Timeline

29:39 – MAKING THE MARKET: A Research Perspective

30:00 – COVID Real Estate Experiences

34:54 – Desirable Apartment Layouts

36:35 – Distressed Deals

37:01 – French Real Estate Financing

39:53 – POLITICIANS AND ATTORNEYS: Bureaucracy and Red Tape

40:09 – Permits and Approvals

45:29 – Homeowners Associations (“Conseil Syndical”)

50:08 – French Property Taxes

55:30 – Unique Ways to Offset Taxes

56:40 – FINANCE AND FORMULAS - The Economics Behind the Deal

56:55 – Challenging Part of Renovation

58:20 – A “Home Run” Deal

59:24 – Investor Communication

1:00:11 – INVESTMENT COMMITTEE Q&A - Vente en Viager

1:03:56 – TOURIST IN YOUR OWN TOWN – How to Spend Three Perfect Days

1:04:08 – Cafes and Restaurants

1:05:21 – Visitor Tip

Additional Links

Kasha Paris - https://kasha.paris/
Instagram - https://www.instagram.com/abkasha/?hl=en
Facebook - https://www.facebook.com/abkasha/videos/

To wrap up summer, Kyle shares some newsworthy real estate headlines and COVID observations from Italy, key takeaways from his conversation with Alberto and Enza Barba, information about his next online poll, and future guest commentary.

00:15- Episode Introduction

Kyle expresses the special nature of his podcast, as it was recorded on-location in Positano, Italy after his conversation with Alberto and Enza Barba (Episode 20).

00:53 – BREAKING NEWS: Italy

00:57 – Brighter Economic Prospects Ahead

Italy experienced negative GDP growth of 8.9% in 2020, but has rebounded to the point where the European Commission forecasts average annual growth of 4.4% between 2021 and 2022.

1:16 – National and Local COVID Information

Italy has managed to vaccinate 40% of its population, though the pandemic has resulted in 4.2mm COVID infections and 128k deaths in the country. Positano has fared much better, with a meager 130 infections and no deaths.

1:48 – Improving Tourism Picture

Venice hotels have recently reported 70% occupancy and anticipated bookings for Summer 2021. In Positano, hotel owners have indicated current occupancy in the 50-80% range, with more guests arriving on the weekends. Meanwhile, the Uffizi Gallery in Florence reported a 40% increase in visits from the first to the fourth week of May. Italy expected 39 million tourists to visit in June through August, which would be a 12% YoY increase.

2:42 – US to Italy: Airport Experience

At Newark Liberty Airport, the check-in process caused confusion among passengers, as limited airline personnel were present to address COVID testing & vaccination concerns. On the other hand, the arrival experience at Rome’s Fiumicino Airport was surprisingly easy, as the authorities eliminated a mandatory antigen test for incoming passengers the day prior to Kyle’s arrival.

3:44 – Mask Wearing Protocols

Masks have been required both inside and outside since October 2020, but this regulation was largely ignored in all but a few places in Positano.

4:07 – Tourist Composition

Most of the non-Italian visitors in Positano during Kyle’s stay were French and German, with a handful of Americans also observed. In contrast to a normal year when 80% of business comes from Americans, restaurants are mostly catering to Italian guests from elsewhere in the country.

5:07 - Removal of Mask Mandate

On June 28th, the outdoor mask mandate was removed across Italy, but the Campania government indicated it would remain in place for another two weeks because of India Variant concerns.

5:28 – GUEST INSIGHTS: Enza and Albero Barba

5:50 – Challenging Approvals for Redevelopment

The process of moving forward with any sort of property redevelopment is never straightforward, as the local government / zoning rules are ambiguous. A certain rule may or may not exist on paper, but collaboration with authorities is still needed.

6:14 – Change & Cancellation Fees

Local property owners are suffering economically because they cannot assess the usual changes for booking changes and cancellations due to COVID.

6:49 – Booking.com Dominance

Booking.com is the predominant way that hotels and B&Bs advertise on the Amalfi Coast.

7:24 – Competitive Hospitality Environment

Despite its relatively small size, the hospitality business in Positano is a very competitive one. Competitors are constantly watching each other to see whether regulations and procedures are obeyed.

8:00 – MONTHLY SURVEY

8:15 - Which of the following European countries wi&

Entrepreneurs Enza and Alberto Barba host Kyle at their spectacular, newly opened hotel called Petrea Lifestyle Suites in the hills of Positano, Italy. With a background in tourism and languages, this dynamic couple has created a 3-room oasis that lends new meaning to the terms “hospitality” and “room with a view.”

Overcoming multiple COVID-related challenges to open the property in May 2021, they explain the property’s unique positioning within the community, as well as some positive effects that the pandemic had on their daily routine.

A graduate of the tourism program at the Amalfi-based L’Istituto Tecnico per il Turismo, Enza has many years of hospitality related experience in Italy and elsewhere. She is fluent in English and Spanish in addition to her native Italian.

Alberto hails from Positano, completed his studies in Sorrento, and has a long-standing track record in the tourism and food & beverage industries.

Petrea Lifestyle Suites plans to accommodate guests throughout the year, including the winter.

00:43- Episode Introduction

03:30 – CAREER FOUNDATIONS: The Ascent of a Dealmaker

04:32 – Enza’s Background and Connection to the Amalfi Coast

06:09 – Impetus Behind Start of Petrea Lifestyle Suites

08:10 – Choice of Property Location

10:14 – Management Responsibilities & Hospitality Experience

12:28 - PROPERTY PARTICULARS: Comments in a Hotel Guest Book

12:29 – Connection to Mythology

15:48 – Guest Suite Naming

18:38 – Attraction of Neighborhood

20:38 – To Open or Not to Open?

21:58 – Transportation to/from Montepertuso

23:53 - MAKING THE MARKET: Tourism and Real Estate

23:54 – Local Economic Drivers

24:40 – Pre vs. Post-COVID Tourism Trends

28:45 – Hotel Pricing and Guest Experience

31:52 – Desired Services

34:31 – Local Real Estate Ownership & Financing

38:48 – New Parking Garage

40:34 - LESSONS FROM COVID: An Unforgettable Time in History

40:35 – Takeaways from Famiglia Barba

42:40 – Mask Wearing for Children

43:30 – Benefits of COVID

44:40 – Movement within Positano during COVID

46:52 – Tenant / Landlord Relationship

49:06 - ASSET DEEP DIVE: How It All Comes Together

49:08 – Influences During Construction

52:02 – Project Marketing

54:10 – Guest Room Rates

57:30 – Year-Round Positano Lodging

1:00:12 – TOURIST IN YOUR OWN TOWN: How to Spend Three Perfect Days

1:00:24 – How to Spend 3 Days As a Tourist

1:02:45 – Advice for First Time Visitor

Additional Links

Email: info@petreapositano.com

LinkedIn: https://www.linkedin.com/in/firuzsoyuer/

Petrea Lifestyle Suites Website: http://www.petreapositano.com/en/

Gallery of Images from PLS: http://www.petreapositano.com/en/gallery/

Kyle takes Global Real Estate Dealmakers on the road, reporting from Phoenix, Arizona on breaking Turkish real estate news, key insights from his past guest (Firuz Soyuer), poll results and the upcoming poll, and commentary on the next guest.

Dealmaker Highlights

01:25 - BREAKING NEWS

01:47 – Residential Price Appreciation
Turkey posted the greatest growth in global residential prices from Q4 2019 to Q4 2020, increasing over 30%. By comparison, global residential prices rose an average of 5.6% based on data from 56 countries.

02:38 – Erdogan’s Kanal Istanbul Plan
President Erdoğan announced plan to proceed with the Kanal Istanbul plan, creating a second waterway to connect the Black and Marmara Seas.

03:09 – Reduction in Benchmark Interest Rate
Another one of Erdoğan’s goals is to slash the benchmark interest rate (one-week repo) to single digits from 19%, though early signs are that he may encounter resistance from other high-ranking officials.

03:39 - 2021 Summer Tourism in Turkey
As Turkey expects to receive 100 million vaccine doses before the end of May, the country is likely to represent a very low risk of infection for summer tourists. Tourism revenue is expected to reach 25 million visitors in 2021, 55% of the 2019 volume. This is welcome news given that quarterly tourism revenue fell 50% from October 2020 through December 2020 as a result of pandemic related lockdowns/restrictions.

04:54 - GUEST INSIGHTS

05:02 – Lack of Bank Financing for Real Estate
Firuz Soyuer, co-founder of Pamir & Soyuer, stated that little to no bank financing exists for real estate projects in Turkey because of the exorbitant interest rates. With this said, developers achieve quasi-financing from investors in condo units (especially on residential side) who place deposits at early stage of project construction. In this sense, developers often have little of their own equity invested.

05:48 – Non-Binding Entitlements
City government has the ability to grant a project full entitlements, but then revoke them at a later stage. As this power potentially represents a major setback to any given real estate development, it is advisable to engage a local partner if investing from outside of Turkey.

06:13 – Private vs. Institutional Investors
Most of the Turkish market is comprised of private buyers and not institutional ones. As private buyer tend to focus on factors such as location and architecture and less so on cap rate, IRR, cash-on-cash return, etc., it is important to identify the buyer profile when analyzing sales transaction data.

07:08 - POLL RESULTS

07:16 – Last Poll Results
In response to the latest poll about the frequency of in-office vs. remote work post-COVID, the majority of participants indicated real estate professionals would be in the office: 1) similar to pre-COVID with slightly more flexibility or 2) on a hybrid basis with 2/3 days in the office and the remainder at home.

08:15 – Next Poll
How long will it take global hotel revenue to return to 2019 levels? (Total room revenue for 2019 was $550 billion)

1. End of 2021
2. End of 2022
3. End of 2023
4. End of 2024
5. 2025 or later

09:18 - Next Guest
Kyle looks forward to welcoming another guest in the next episode from a country with a lower global profile, but one that has plenty of compelling dynamics.