Tuesday's midterm elections in the United States captured headlines for the political shift in Washington. But while everyone was focused on the balance of power in Congress, voters across the country were making decisions that could have an equally profound impact on real estate development.I'm talking about ballot initiatives that directly determine whether specific development projects can proceed.These votes provide a fascinating insight into the political risks associated with real estate development.Let's start in Miami, Florida.Voters rejected a proposal to redevelop approximately 28 acres of public waterfront property on Virginia Key.Voters rejected expansion of an office building in Miami Beach.Voters rejected expansion of an existing data center in Ohio. ------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [[email protected]](mailto:[email protected])  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Welcome to the Real Estate Espresso Podcast, your morning shot of what's new in the world of real estate investing. I'm your host, Victor Menasce.We live in the most interconnected world in human history. We can communicate instantly with someone on the other side of the planet. We have video conferencing, social media, podcasts, email, text messaging, and now artificial intelligence making communication easier than ever.Yet despite all this technology, I would argue that meeting people face to face has become more important, not less.I publish this podcast every single day. That means listeners can hear my voice, understand how I think, and develop a sense of familiarity with me without us ever having met.I also speak at conferences, attend industry events, and participate in both virtual and in-person gatherings.These are all valuable ways of connecting with people. But they don't all accomplish the same thing.There's a fundamental difference between being familiar with someone and actually knowing them.When someone listens to this podcast for several years, they may feel they know me quite well. They've heard my opinions on investing, economics, development, and capital raising. They've developed a sense of my values and how I approach business.But that relationship is largely one-directional. I don't necessarily know who they are.When we finally meet in person, something changes. The relationship becomes reciprocal.---------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [[email protected]](mailto:[email protected])  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Americans head to the polls for the midterm elections. All 435 seats in the House of Representatives and 35 Senate seats are being contested.The outcome could fundamentally change the balance of power in Washington. But what does that mean for commercial real estate investors?Most political commentary will focus on which party controls Congress and the Senate what that means for the legislative agenda.For real estate investors, I think that’s the wrong question.The more important question is what happens to the cost of capital, federal borrowing, local taxation, construction costs, and ultimately property valuations.-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [[email protected]](mailto:[email protected])  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

This month’s book of the month is Deep Work: Rules for Focused Success in a Distracted World by Cal Newport.Published in 2016, the book examines a problem that has become increasingly relevant in our professional lives. We have confused being busy with being productive.Ten years after publishing Deep Work, Newport revisited this question in two essays published in March 2026.The first was titled Why Hasn’t AI Made Work Easier?His second essay, Avoiding Digital Productivity Traps, Newport proposes three solutions.First, measure meaningful output rather than activity.Second, identify the actual bottlenecks preventing progress and apply technology to those constraints.Third, deliberately separate deep work from shallow work.---------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [[email protected]](mailto:[email protected])  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today is a very special show which is fully dedicated to the topic of cost reduction in your project. When a project runs into headwinds there are only 3 main variables that you have to play with, capital cost, construction cost and rents. You might conclude that you have zero control over any of them. That perspective can be true if you are too late in the product life cycle. You have already arranged permanent financing, your project is completed and your building is leased in the market. At that point you have very few levers you can pull. We tend to think of Construction cost as if it was a fixed quantity. If the bid goes up by 10% from the GC, well then your cost just went up by 10%. That’s just too bad for you. But there is a process called value engineering. Value engineering is the process of pulling cost out of a project without damaging the value of the finished product. --------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [[email protected]](mailto:[email protected])  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Some of the losses this week were reminiscent of 2001 and 2008. Is it different this time? ---------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [[email protected]](mailto:[email protected])  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today's question come From Mark in North Carolina."Victor, I've listened since your early episodes on the Simplification Trap and Forcing Value in Apartments. I'm sitting on 3.5 acres entitled for 82 units, fully site-planned. Your episodes over the last 18 months about cap rate expansion and 'Building When Others Pause' really resonated.My pro forma worked at 5.5% construction debt in 2021. Today I'm quoted at 8%+ and my constructino cost is still 20% above my previous estimates. If I wait for rates to drop, I risk losing my site plan approval window and my entitlement work goes stale. If I build now, I lock in high costs. What should I do?-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [[email protected]](mailto:[email protected])  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today was interest rate announcement day on both sides of the Canada–US border. The two central banks made different decisions, but the underlying message was remarkably similar. Consumer prices remain a problem, economic growth has been stronger than expected, and investors should not expect a return to cheap money anytime soon.The Bank of Canada increased its benchmark overnight lending rate by 25 basis points to 2.5%. Meanwhile, the Federal Reserve decided to leave its benchmark rate unchanged, maintaining a target range of 3.75% to 4%.But the headline that the Fed did nothing would be misleading. Sometimes monetary policy becomes more restrictive without the central bank actually changing interest rates.That's because the bond market can do some of the Fed's work for it.Fed Chairman Kevin Warsh emphasized that inflation has been running above the central bank's two percent target for nearly six years.Six years is a long time to miss a target that forms the foundation of monetary policy credibility.The Fed cannot simply declare that three percent inflation is the new normal without undermining confidence in its commitment to price stability.There was also the unavoidable political dimension to today's announcement.The United States is holding its midterm elections on November third, just six days after today's Federal Reserve meeting.-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [[email protected]](mailto:[email protected])  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Yesterday, Microsoft made an announcement that should get the attention of every real estate investor, developer, and lender in North America.The company is offering voluntary buyout packages to approximately 60,000 employees. That represents more than one-quarter of its worldwide workforce of 223,000 people.This follows an earlier voluntary retirement program offered to approximately 8,750 employees, about 30% of whom accepted. In July, Microsoft eliminated another 4,800 positions. And that comes after more than 15,000 job cuts in 2025. Maybe they’re assuming a similar participation rate of 30%. What happens when some of the world's most profitable companies discover they can operate with substantially fewer people? That's the question we need to examine.--------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [[email protected]](mailto:[email protected])  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Marcus and Millichap recently published their second-half 2026 national report on manufactured housing communities.Nationally, manufactured home communities recorded average lot rent growth of 6.2 percent in 2026, compared with 7.9 percent in 2025. That remains considerably stronger than apartment rent growth.Apartment developers responded to pandemic-era migration and rising rents by constructing hundreds of thousands of units, particularly across the Sun Belt. Manufactured housing developers faced a different environment. Zoning restrictions, infrastructure requirements, and community opposition severely limited new development.But regional differences are becoming increasingly important.Some markets showed rising rents even with rising vacancy. ------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [[email protected]](mailto:[email protected])  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)