Quarterly Newsletter

Turning the Corner

April 25, 2025

This article is based on my presentation that I made at our Annual Partners Meeting that took place on April 8th. Let me first start off by saying that I’m glad we don’t focus on the office market. Here is a chart of Hudson Pacific Properties. Long-term shareholders have seen the value of their investment decimated. And even for apartment owners, in which long-term value has held up, market select...

Apartment Rents - A Coiled Spring?

January 24, 2025

In the Talking Heads song Psycho Killer, David Byrne sings, “Say something once, why say it again.” I’m usually in that camp, particularly when someone is upset with me. You don’t need to keep repeating the same thing over and over for me to get what you’re trying to communicate. Obviously this is a defensive reaction on my part but I still generally feel that way. When it comes to communicating t...

Light at the End of the Tunnel

October 25, 2024

In my quarterly letter from October 2023, I wrote the following: “With the de-inversion of the 10s and 5s I would say we’re now on recession watch. Once the 10s and 2s de-invert then to me it’s a clear recession warning. And this will finally get us to the point where the Fed will be officially done raising short-term rates and we can finally be in a position again to get some relief with the pros...

R.I.P. Bill Williams

July 26, 2024

The world lost a force of nature in the passing of Bill Williams on June 13, 2024. Bill co-founded CWS in 1969 with Jim Clayton after the two of them met at an Indian Guides outing, and both came to learn that they had read the same book about how to create wealth in real estate. Being young men of ambition and action, they decided to turn their mutual interest into a side business as they were bo...

Goodbye to the Long Emergency

April 26, 2024

This article represents the salient points from my presentation at CWS’ Annual Investor Meeting on April 2nd. Although I discussed the apartment market in some detail, space limitations will have me focus on the significant change in the Fed reaction function for this article. From the mid-80s through early 2022 this chart shows how the Federal Funds Rate was on a continuous downtrend in which su...

Cap Relief: A Powerful Inflection Point

January 26, 2024

All roads lead to the cost of interest rate caps for many of our CWS properties. I say this because we have a number of variable-rate loans with caps that are lower than prevailing interest rates. As a result, the projected drop in short-term interest rates that is expected to take place in 2024 will not have a meaningful impact on debt service for these properties unless rates drop below the stri...

Strengthening the CWS Permafrost

October 26, 2023

In late September five senior CWS executives huddled together for our annual get together to check in on our personal and professional lives and to put our heads together to help guide our strategy and resource allocation in the year ahead. As I reflect on the many years we have met in Deer Valley, two experiences stand out for me that have a lot of applicability to the current environment impacti...

Getting to '25: A Bumpy Ride and an Opportunity to Thrive

July 28, 2023

In May we had our first in person Annual Investor Meeting since 2019. It was so nice to be together again despite not communicating the rosiest of messages. We showed how higher interest rates have negatively impacted our cash flows given our reliance on variable-rate debt. I spent the bulk of my presentation discussing why we have emphasized variable-rate loans since 2011 and our rationale for no...

Pan(ic), a Looming Credit Crunch, and Powell's Favorite Indicator

April 28, 2023

Panic among uninsured depositors revealed risks to the banking system that were not fully appreciated. This could lead to the Fed pausing after one more rate hike and then reversing course and cutting interest rates later in the year as its policies are putting great pressure on smaller banks and inducing a credit crunch. This could provide for interesting investment opportunities in the apartment...

Lessons from Wars, Office Buildings, and Inverted Thinking

January 27, 2023

2022 was a brutal year for most investors as this headline conveys, "The year of Black Swans: Over $30 trillion lost on global stock markets in 2022." And when bond returns are factored in, the loss of market value is even more dramatic.

An Anti-Curious Jay Powell and his Kamikaze Fed

October 29, 2022

I’ve been wrestling with the outlook for 2023 for our apartment portfolio because of the highly unusual global economy as we come out of Covid, overlayed with the geopolitical situation with the war in Ukraine, its impact on energy prices, and China’s increasingly authoritarian governance and draconian economic and social policies.

Sun Showers

July 29, 2022

If the tremendous demand for apartments is an economic indicator, then the weather conditions are quite pleasant and favorable to remain that way. This graph from Witten Advisors shows the huge demand for apartments and how it has greatly exceeded any other time frame in the last 20 years.

Stress for Success

April 29, 2022

In last quarter’s article I discussed how the operational trends we were experiencing were quite positive and that higher revenues should help offset rising interest rates that would impact our variable-rate loans. And while the operational performance continues to be quite strong as evidenced by our first quarter portfolio generating a 16.8% increase in rents for units that have been vacated and ...

Passing the Baton

January 28, 2022

In my 34 years at CWS I have never seen such significant rent increases as we are experiencing today. For example, in the fourth quarter of 2021 we had 2,805 new leases signed for people moving into our communities. These are not people renewing, but new occupants.

Initial Conditions and the Road to Development

October 29, 2021

We have been spending a lot of time internally discussing why there has been such a dramatic increase in rents throughout most of our portfolio, as well as for most other large apartment owners. In the wake of the pandemic, there have been a number of variables which have been supportive of an increasing demand for apartments as well as housing overall.

Here Comes The Sun

July 30, 2021

As we have communicated over the past year, we felt as if we had built up strong defenses to help weather the Covid storm. Of course when it started we had no idea how bad it would get. What we did know, however, was that the Federal Reserve was going to aggressively lower interest rates to do its part to help the economy through the pandemic-induced shut down. And with approximately 83% of our de...

The CWS Platform - Addition Through the Elimination of Subtraction

April 30, 2021

When people ask me if I have any advice for them as they contemplate starting a real estate company or have a relatively new one that is trying to gain traction, I tell them that my experience has taught me how lucky I was to start with a company that had an established platform, albeit a much smaller one 34 years ago. It provided us with stability, credibility, and a track record that we could ex...

2020 - The Year of Living Dangerously

January 29, 2021

2020 was clearly a year that was unlike any I had experienced. We entered the start of the Roaring 20s in good shape economically. Unfortunately this was upended virtually overnight by pandemic-induced shutdowns which has decimated certain sectors of the economy. These include airlines, hotels, entertainment, retail, beauty services, gyms, leisure, and the office economy. Despite this carnage, the...

The Right Stuff But Still More Questions Than Answers

October 30, 2020

The situation we’re in today lends itself to thinking about the famous Donald Rumsfeld soliloquy about known knowns and known unknowns and unknown unknowns. This is because there are quite a few known unknowns since the world has been turned upside down by the impact of COVID and the resulting change in consumer and business behavior that has been either imposed by government regulations or self-i...

The Power of Resilience

July 31, 2020

I don’t think one can overstate the importance and value of resilience in life. Events will take place that we are not prepared for financially, emotionally, physically, logistically, etc. We can either face the challenges head on or bury our heads in the sand and pretend that nothing has changed and ignore the new reality.

What did the farmer say when his horse dropped dead?

April 24, 2020

…Never did that before. I think that is a trite, apt description about the economic and social impact of the response to COVID-19. Our economy had gone from 0 to 60 over about a seven-year period in a fairly methodical path of growth with some occasional setbacks. That all went into reverse in just a matter of weeks as the economy collapsed and not only went back to zero, but went into reverse.

The Roaring 2010s (For Apartments)

January 31, 2020

One of the great things about CWS and our 50+ years of longevity is that we have a tremendous amount of content that we can fall back on to review the effectiveness of our decision-making to see if there were any lessons learned to help us improve in the future. With the end of the 2010s and the beginning of a new decade, I thought this would be a good opportunity to do this.

Going with the Flow

October 25, 2019

At CWS we subscribe to apartment market reports produced by Witten Advisors. Ron Witten, the principal of the firm, has spoken at our Annual Investor Meeting twice and he does a good job of drilling down into some granular aspects of the multifamily industry relevant to apartment investors.

Capitalizing on a Slow Down

July 26, 2019

With approximately 75% of our loans at CWS being floating rate, we have a strong interest (pun intended) in following the direction of short term interest rates. As one can see from the following table, 30-day Libor, the index in which our loans are tied, was remarkably steady and at a very low rate between 2009 and 2016.

50 Years and Still Going Strong

April 26, 2019

The following is an excerpt of my presentation at CWS’ annual investor meeting. 2019 is CWS’ 50th year. This is quite an accomplishment and worthy of celebration. To put this achievement in context, I did some research in terms of the lifespan of typical businesses in the United States. As the following charts and tables show, there's an approximately 50% chance that if one were to start a busines...

Positioned Well for a Slowdown

January 25, 2019

Warren Buffett has dramatically outperformed the market and his peers over his 50+ year investment career. This has been the case more so because of his performance during down markets rather than his performance during up markets. While others are heavily invested at the top and reeling from big losses and playing defense, he has had capital available when others did not and as a result, has been...

In the Kingdom of the Blind, the 25 "I" Investor is King

October 26, 2018

Bill Williams is fond of quoting Erasmus when he says “In the kingdom of the blind, the one-eyed man is king.” Of course this means that very few people have a clear vision of the future so those that have a well thought out idea of how the dominoes may fall should still have an advantage even though they don’t have 20-20 vision out of both eyes.

AIM 2018 Recap

July 26, 2018

There has naturally been a lot of concern over rising interest rates as approximately 80% of our debt is variable-rate. Until this point we have been able to capitalize on this by having a lower cost of funds that has translated to interest savings of over $70 million since 2012.

Lessons From The East

April 23, 2018

One of the mantras we like to say at CWS that is borrowed from Buddhist thought is “Eat when we’re hungry and sleep when we’re tired.” We want to design our company and be positioned to do what is smart independent of external forces such as envy and financial pressures.

Tax Reform: Very Favorable for Renters

January 26, 2018

Tax reform is a big deal and that is why it does not happen very frequently. It can also have some very large unintended consequences. The 1981 tax law sparked a tremendous wave of real estate investment and development because passive investors could write off their losses against ordinary income.

Houston: Back from the Abyss

October 27, 2017

Some time has passed since the devastating flooding that took place in Houston. This has allowed us to wrap our arms around the damage and to formulate some initial thoughts on the impact of the flooding on the apartment market. I also think it is important for our investors to know what CWS did to prepare for the event and the actions we took during and after. My experience in having been i...

Stay to Play

July 28, 2017

I just celebrated my 30th year with CWS and I have been so fortunate to have worked in one place with such great people for all of these years. It has also been an incredible laboratory for studying human behavior, psychology, economics, sociology, demographics, and politics, just to name some of the most important disciplines that have helped me become a better investor.

The Next 30+ Years

April 28, 2017

This is my 30th year at CWS so I thought this would be an appropriate time to look back on some important trends during my three decades at CWS and to then look ahead to see if apartments are well-positioned going forward.

CWS - My Family Office

January 27, 2017

2017 should be quite an interesting year. We have a new President for which there is very little historical parallel. Donald Trump has clearly shown he is his own man and the consummate negotiator so we don't really know where he truly stands on a lot of issues, or at least what he will settle for.

CWS and the Success of Founder-Led Firms

October 28, 2016

“To live in a great idea means to treat the impossible as though it were possible. It is just the same with a strong character; and when an idea and a character meet, things arise which fill the world with wonder for thousands of years.”

$50 Million and Counting

July 29, 2016

Since late 2011 I have been tracking how the cost of our variable rate loans have compared to the fixed-rate options we could have chosen at the time of origination. The results have been very favorable.

Better Than We Thought

April 29, 2016

Over the years I have found that it is good discipline to take the time to articulate in writing the hypotheses that are the basis of making an investment. Hindsight is of course always 20/20. The true test is how effective is one’s decision making process in real time with imperfect information and an unknowable future.

Weathering the Storm

January 29, 2016

2015 was a pretty interesting year and so is the beginning of 2016. 2015 was so challenging from an investment perspective that, according to a report on CNBC, it was the hardest year to make money in 78 years as virtually every asset class struggled. Let’s go down the list of some notable events that took place.

Lessons From Andrew Carnegie

October 30, 2015

Over the years I have written about individuals who have had a great influence on my thinking in business and life. Examples include Shakespeare, Charlie Munger, George Soros, and Arthur Schopenhauer, to name some of the notable ones. One newcomer to the party is Andrew Carnegie. I am not sure why it took so long to read his autobiography but in this case it is truly better late than never.

From Fare Thee Well to Keep on Truckin'

July 30, 2015

In a recent blog post, I wrote about my trip to Santa Clara, CA to see one of the final "Fare Thee Well" shows for the Grateful Dead, commemorating their 50th anniversary. In that post I talked about my fascination and admiration for the Dead's very successful and innovative business model that in many ways was the precursor to the models being used by many successful technology companies today.

Positive Optionality

April 30, 2015

One of the most important pieces of advice that I could give for not only positioning oneself for success in the world of investing, but probably in life more generally is to do all you can to preserve positive optionality.

Houston, Do We Have a Problem?

January 30, 2015

It would be naïve and utterly foolish to believe that Houston won’t be negatively impacted by the significant drop in oil prices in such a short period of time. The question is how will it affect CWS properties?

Cleaning the Fish

October 31, 2014

It’s important to me that our investors, current and prospective, have an understanding of how CWS operates. A lot goes into making investment decisions and managing the properties we purchase and build. The more visibility our investors can with regard to how we do business and make decisions, then the better informed they can be when deciding to invest (or reinvest) with us.

The CWS Circle of Life

July 25, 2014

The focus of this article is to illuminate two important ways CWS generates long-term return for our investors. The first way is providing investors with tax-deferred wealth preservation. The second way is making investments in which we believe the competition for particular investments is subdued and, as a result, we can find compelling values.

Looking Back and Looking Ahead

April 25, 2014

I have heard someone ask the question, “How do you avoid an avalanche?...Don’t be on the mountain when one occurs.” If an investment drops by 50%, then obviously it has to double to get back to break even, which is no easy feat.

Is CWS Right for You?

January 31, 2014

A few years ago I came across letters written by Warren Buffet to his investors prior to Berkshire Hathaway being his sole investment vehicle. Between 1956 and 1968 Buffett was the general partner of various Buffett Partnerships. His performance was, of course, extraordinary and it is fascinating to see how the assets of the partnership compounded through a combination of investment acumen and ne...

Let the Numbers Do the Talking

October 25, 2013

This article will be shorter than others as I would like the numbers to do the talking as well as Bill Gross from PIMCO. For those of you who have paid even a little bit of attention to our communications, you know that we have had a bias towards variable-rate financing over the last two years or so.

Shoot First, Ask Questions Later or Read My Lips: Stay the Course

July 26, 2013

We had people over recently and I was distressed to pull a bottle of wine out of the wine cooler to find that it was not very cool. I impatiently tried to fix the problem by putting it in the freezer on top of the ice bucket to expedite the cooling.

How Did We Do?

April 26, 2013

There is a line from a Talking Heads song that says, “Say something once, why say it again?”. I am usually a firm believer in this “less is more” communication approach.

Silver Linings Playbook

January 25, 2013

I really enjoyed the movie Silver Linings Playbook. In fact, I saw it twice I liked it so much. Rather than discuss what the movie is about, I thought I would use the title to shed light on another silver linings playbook that was revealed towards the end of 2012.

Heraclitus, Jung, and the Road to Damascus

October 26, 2012

The graph at the top of page 2 speaks volumes about the collapse in the lending market for owner-occupied home purchases in the United States. This picture depicts one very frothy mid-2000s lending market in which a large percentage of purchasers supplemented their first mortgages with second liens while “protecting” lenders through the purchase of private mortgage insurance.

A Labour of Love 25 Years and Still Learning

July 27, 2012

This July I will have completed my 25th year at CWS. Having just returned from a great trip to England that ended with a couple of days in Stratford-upon-Avon, the birthplace of William Shakespeare, my interest in him was elevated by the visit.

The Renter Generation

April 27, 2012

The following article is a summary of the key points and charts I presented at our annual investor meeting that took place on April 2, 2012

A Political Calculation

January 27, 2012

The economic system had pulled out of its sinking spell of 1929-33 only to become a chronic invalid, whose temperature was lower now in the mornings but showed no signs of returning quickly to normal.

Collapse Into Now

October 28, 2011

For many people in my world, the most shocking event of last quarter was the collapse of Treasury yields which led to the 10-year Treasury note yield dropping below 1.80%, last seen well over 50 years ago.

Enhancing Lives the CWS Way

July 29, 2011

For a long time I have felt that to be successful in business, and in life for that matter, one of the necessary traits is to be an effective hypothesis tester.

Tectonic Shift

April 29, 2011

Note: If you attended our Annual Investor Meeting then this article may be repetitive since it was the basis of my presentation.

A Picture Worth 1,000 Words

January 28, 2011

Sometimes there is a picture that really is worth 1,000 words, or in my case, closer to 1,400. CWS has owned apartments on an uninterrupted basis since 2000.

A Paper Blog

October 29, 2010

I’ve been thinking about starting a blog. Blogging is pretty much a 24/7 endeavor for it to be relevant and fresh. So rather than doing that right now, I thought I would take one step backwards and one forward by providing excerpts of what I think are very relevant articles about the apartment market that I would put in a blog if I had one.

Falling into Place in a Keynesian Way

July 30, 2010

“The importance of money flows from it being a link between the present and the future.” John Maynard Keynes

Thank You Benjamin Roth

April 30, 2010

This quarter was particularly challenging to find a relevant and interesting topic for my article. I feel like I have said what needs to be said over and over about our business (apartments are well positioned for a recovery) and the economy (it is recovering and I am optimistic that it can be sustainable without a double dip recession).

A Year of Hope and Transition

January 29, 2010

“Well now, everything dies, baby, that’s a fact But maybe everything that dies someday comes back” Bruce Springsteen, “Atlantic City”

Doing More with Less

October 30, 2009

National job losses have been massive over the last year. We have now returned to a level of employment that we had in 2005. The following chart shows the annual change in non-farm employment in the United States going back to 1996.

Finding Wisdom

July 30, 2009

“The wonder on this side of the Atlantic deepens, in view of these circumstances, that Chamberlain remains in office. In the five years previous to the outbreak of war, he led the British people from one diplomatic disaster to another.

Is it 1932 or 1942, 1958, 1962, 1970, 1975, 1978, 1982, 2002?

April 24, 2009

Two caveats: If you dislike a lot of numbers, then this article is not for you. In addition, if you’re hoping to get the answer to the question posed in the title by reading this article, you will be disappointed. With that said, please proceed at your discretion.

The Road to 125 (or 130?)

January 30, 2009

At the peak of home lending insanity, lenders aggressively sought borrowers to provide them financing of up to 125% of the (inflated) value of their homes.

➤ Disclosure :

The property pictures featured throughout this website have already been capitalized by CWS investors and are not available for investment. Past performance is no guarantee of future results.

This website is provided to you by CWS Capital Partners. CWS Capital Partners provides investment advice to its proprietary funds. Through its affiliate CWS Apartment Homes it offers real estate related advice. Investment opportunities may be in the form of a single property offering or a pooled investment vehicle and are through an affiliated entity, CWS Investments. CWS Investments is a registered broker dealer, member FINRA SIPC. The information on this website is not intended to be investment advice or an offer; offers can only be made with the private placement memorandum and offering documents.

Private placement real estate securities offerings are speculative and involve substantial risks. Risks may include, but are not limited to, illiquidity, lack of diversification, loss of capital, default risk, environmental, development, and capital call risk. Investments may not achieve their objectives as outlined in their business plans.

For more information about CWS Capital Partners see its Form ADV. For information about CWS Investments see its Form CRS and FINRA Broker Check .