Episode summary
Understanding Distressed Real Estate
Bloomberg Businessweek Daily
· · Guests: Amy Rubenstein
Summary
Amy Rubenstein says distressed real estate is being shaped by sharply different local conditions rather than one national housing story. In coastal markets like Florida and California, rising insurance costs are making properties harder to own, insure and underwrite, which is one reason Clear Investment Group has stayed away from coastal deals for a while. She says California remains expensive and appreciation-driven, while Florida’s insurance burden has become a major deterrent for both owners and new investors.
Rubenstein describes the market as bifurcated: overbuilt areas are cooling as supply gets absorbed, while more depressed markets that did not overbuild are improving. She points to Chicago and San Francisco as examples of rents reaccelerating, while parts of the Sunbelt that saw heavy development in 2022 are now seeing price pressure as new units come online. She says new development in 2025 is 70% to 2025 below its peak in 2022, and that oversupply is now working through the system.
Where Clear is most active is the Midwest, especially Ohio. Rubenstein says the firm is buying in Columbus, Cleveland and Cincinnati and looks for stable markets with economic growth and “upside down capital stacks.” On affordability, she argues the core problem is not just housing prices but cost of living and mobility, with renters facing move-in costs, deposits and concessions rather than a simple shortage of units.
Key takeaways
- Amy Rubenstein says Florida and California remain difficult because rising insurance costs are hurting owners and deterring new investors.
- She says the market is split between overbuilt regions that are cooling and underbuilt regions that are tightening, with Chicago and San Francisco seeing rent increases.
- Clear Investment Group is bullish on Ohio, with activity in Columbus, Cleveland and Cincinnati.
- Rubenstein says Sunbelt markets are normalizing after a 2022 building peak, and oversupply is now weighing on prices.
- She argues affordability is driven as much by cost of living and mobility costs as by headline housing prices.
Notable quotes
“The something that Florida has to struggle with is rising insurance costs, and that has made it really hard for property owners”
“California real estate market has always been very unique in the sense that it's an appreciation market and not a cash flow market”
“We're still seeing a very bifurcated economy both in the macro economy and then also within submarkets”
“We're really bullish in the Midwest right now. We like areas that are very stable. We don't like to see that overgrowth”
How the episode opens
You guys have done a lot of transactions around The United States. Stuff in Florida, do you have projects going on? Tell us about the environment.
I'm curious if you've got anything in Cape Coral or nearby. Don't have anything right now in Florida. We've been in Florida in the past.
The something that Florida has to struggle with is rising insurance costs, and that has made it really hard for property owners and for new investors to come into that market because of of insurance. Is that why you guys are staying out? Well, we've been staying out of coastal for a little while.
We started looking back at it again because insurance started to level out, but insurance rates are incredibly high. That's not just a Florida story. It's a California story too.
It's all coastal right now and fires. Right? Yeah.
California. And we see that start to hit parts of of California, like Malibu and the Malibu area. But for the most part, California real estate prices are still really, really high even though it's challenging and expensive to Absolutely.
Ensure that those properties, when does that chicken come to roost? California real estate market has always been very unique in the sense that it's an appreciation market and not a cash flow market. So it's always been a little bit tight there.
But when does that stop? I I don't it's a it's a market that seems to not follow economics. And you don't have anything in California right now.
Used to. We started in California. That's where we were for ten years, and we do not now.
So we are very cash flow oriented. So talk to us about the environment, what you are seeing today versus what it was six months ago, twelve months ago.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- distressed real estate
- renter pressure
- landlord pressure
Companies and tickers mentioned
- Clear Investment Group
Watch the episode
Watch “Understanding Distressed Real Estate” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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