Back in the fall of 2006, almost twenty years ago, Sam Zell's Equity Office Properties Trust announced that it had entered into a definitive agreement to be acquired by Blackstone Real Estate Partners, in a transaction valued at approximately US$36 billion. This was a massive deal at the time, so much so that Sam Zell would later come to the University of Pennsylvania, where I was in grad school at the time, to talk to real estate students about how smart he was.
The transaction closed in 2007 and, in hindsight, it looked like he had timed the peak of the real estate market perfectly. But in all fairness, when asked about his clairvoyant timing, his response was that he had no idea (probably with a strong expletive somewhere in the middle). His honest answer was that Blackstone simply offered him a price for the portfolio that was greater than their own internal valuation, and so he accepted it.
Another question that he was asked went something like this: "Blackstone is likely going to break up the portfolio, sell off the assets individually or in chunks, and make boatloads of money. Why didn't you just do that?" Despite the peak-market timing, this statement ended up being true. Blackstone generated something like a $7 billion profit on the deal.
But Sam's response was that he couldn't. He cited an esoteric IRS rule that stipulates that once a REIT decides to sell all of its assets and formalizes a liquidation plan, it has a 24-month window to do so, or else get hit with additional corporate taxes. Regardless of the specific IRS section, his reasoning was simple: you never want to be a seller when buyers know you need to sell by a certain time.
This is, of course, intuitively true. Negative leverage is bad in negotiations. In other words, it is highly unlikely that Sam could have generated the same $7 billion profit. I mean, as far as I can tell, Blackstone didn't sell the last office building from the portfolio until 2018, over a decade later.
I was reminded of this principle when reading Prime Minister Carney's speech to the World Economic Forum this week. (This entire post was the best real estate segue I could come up with.) If you haven't read or heard it yet, I would strongly encourage you to do so. Leverage is crucial in negotiations, and it's best to do everything you can to manufacture it.
Cover photo by Kyle Fritz on Unsplash
My dad sent me an article from Canoe Financial over the weekend that included the chart below. What it shows is that corporate equities and mutual fund shares now make up a greater percentage of household wealth in the US than residential real estate for only the second time since 1990.
From a macro perspective, and when you consider the popularity of index funds, this means that American households probably have a lot of their wealth concentrated in high-growth tech stocks. And since these stocks are being driven higher largely due to the promise of AI, there's perhaps a concentration risk for US households.
Yesterday morning, I took the train from Toronto to Montréal. I'm here for one night for a few meetings. I love trains. You can show up right before departure, the seats are more spacious, and they go downtown to downtown. Plus, there's something romantic to me about whizzing through the landscape. But currently, this trip takes just over 5 hours once you factor in the above stops (see cover photo). That's too long in this day and age, so Canada is, as I understand it, working on a new high-speed rail solution called
Back in the fall of 2006, almost twenty years ago, Sam Zell's Equity Office Properties Trust announced that it had entered into a definitive agreement to be acquired by Blackstone Real Estate Partners, in a transaction valued at approximately US$36 billion. This was a massive deal at the time, so much so that Sam Zell would later come to the University of Pennsylvania, where I was in grad school at the time, to talk to real estate students about how smart he was.
The transaction closed in 2007 and, in hindsight, it looked like he had timed the peak of the real estate market perfectly. But in all fairness, when asked about his clairvoyant timing, his response was that he had no idea (probably with a strong expletive somewhere in the middle). His honest answer was that Blackstone simply offered him a price for the portfolio that was greater than their own internal valuation, and so he accepted it.
Another question that he was asked went something like this: "Blackstone is likely going to break up the portfolio, sell off the assets individually or in chunks, and make boatloads of money. Why didn't you just do that?" Despite the peak-market timing, this statement ended up being true. Blackstone generated something like a $7 billion profit on the deal.
But Sam's response was that he couldn't. He cited an esoteric IRS rule that stipulates that once a REIT decides to sell all of its assets and formalizes a liquidation plan, it has a 24-month window to do so, or else get hit with additional corporate taxes. Regardless of the specific IRS section, his reasoning was simple: you never want to be a seller when buyers know you need to sell by a certain time.
This is, of course, intuitively true. Negative leverage is bad in negotiations. In other words, it is highly unlikely that Sam could have generated the same $7 billion profit. I mean, as far as I can tell, Blackstone didn't sell the last office building from the portfolio until 2018, over a decade later.
I was reminded of this principle when reading Prime Minister Carney's speech to the World Economic Forum this week. (This entire post was the best real estate segue I could come up with.) If you haven't read or heard it yet, I would strongly encourage you to do so. Leverage is crucial in negotiations, and it's best to do everything you can to manufacture it.
Cover photo by Kyle Fritz on Unsplash
My dad sent me an article from Canoe Financial over the weekend that included the chart below. What it shows is that corporate equities and mutual fund shares now make up a greater percentage of household wealth in the US than residential real estate for only the second time since 1990.
From a macro perspective, and when you consider the popularity of index funds, this means that American households probably have a lot of their wealth concentrated in high-growth tech stocks. And since these stocks are being driven higher largely due to the promise of AI, there's perhaps a concentration risk for US households.
Yesterday morning, I took the train from Toronto to Montréal. I'm here for one night for a few meetings. I love trains. You can show up right before departure, the seats are more spacious, and they go downtown to downtown. Plus, there's something romantic to me about whizzing through the landscape. But currently, this trip takes just over 5 hours once you factor in the above stops (see cover photo). That's too long in this day and age, so Canada is, as I understand it, working on a new high-speed rail solution called
The other thing this chart made me wonder about was what it would look like for Canadian households.
According to these net worth indicators released by Statistics Canada in October 2025, real estate as a share of total household assets was sitting at 41.8%. Financial assets as a share of total assets were at 53.4%, but this includes life insurance and pensions, which are not included in the US chart.
If we remove this line item, we're left with "other financial assets" at 37.8%. However, this account also includes cash deposits, bonds, foreign investments, and other receivables, which I also don't think are carried in the US chart. So net-net, Canadian household wealth is composed of real estate at 41.8% and corporate equities at some number below 37.8%.
Real estate is the larger net worth account for Canadian households. Whether this is good or bad is a topic for another post, but there's certainly an argument to be made that Canadians are over-indexing on real estate at the expense of investing in new ideas and businesses.
Cover photo by Daniela Araya on Unsplash
The first phase will connect Ottawa to Montréal (construction is expected to start in 2029), and a subsequent phase will connect Ottawa to Toronto. The top speed will be around 300 km/h, which I'm guessing will result in an effective speed closer to 200 km/h when you factor in stops and any speed limits required near urban centers. With this, the goal is to bring the journey from Toronto to Montréal down to around 3 hours.
One thing to keep in mind is that Ottawa does not lie on the fastest route between Toronto and Montréal; it adds about 70 km. But it's of course necessary. In theory, an express route with no stops running TGV or Shinkansen-like trains could bring the journey time down closer to 2 hours. But that's not what is being planned from what I have read. Regardless, 3 hours is still a big deal and a meaningful improvement. It makes the trip faster than flying, and certainly faster than driving.
Could current drive times ultimately change with autonomous vehicles? Maybe, but it's unlikely to be by this much. I hate long road trips and the same would be true even if a robot were driving me. So I look forward to one day — in my 50s? — doing this journey in 3 hours. If we could get it down to 2 hours and change, that much better. That's a trip worth taking for a night out or just to stock up on bagels.
The other thing this chart made me wonder about was what it would look like for Canadian households.
According to these net worth indicators released by Statistics Canada in October 2025, real estate as a share of total household assets was sitting at 41.8%. Financial assets as a share of total assets were at 53.4%, but this includes life insurance and pensions, which are not included in the US chart.
If we remove this line item, we're left with "other financial assets" at 37.8%. However, this account also includes cash deposits, bonds, foreign investments, and other receivables, which I also don't think are carried in the US chart. So net-net, Canadian household wealth is composed of real estate at 41.8% and corporate equities at some number below 37.8%.
Real estate is the larger net worth account for Canadian households. Whether this is good or bad is a topic for another post, but there's certainly an argument to be made that Canadians are over-indexing on real estate at the expense of investing in new ideas and businesses.
Cover photo by Daniela Araya on Unsplash
The first phase will connect Ottawa to Montréal (construction is expected to start in 2029), and a subsequent phase will connect Ottawa to Toronto. The top speed will be around 300 km/h, which I'm guessing will result in an effective speed closer to 200 km/h when you factor in stops and any speed limits required near urban centers. With this, the goal is to bring the journey from Toronto to Montréal down to around 3 hours.
One thing to keep in mind is that Ottawa does not lie on the fastest route between Toronto and Montréal; it adds about 70 km. But it's of course necessary. In theory, an express route with no stops running TGV or Shinkansen-like trains could bring the journey time down closer to 2 hours. But that's not what is being planned from what I have read. Regardless, 3 hours is still a big deal and a meaningful improvement. It makes the trip faster than flying, and certainly faster than driving.
Could current drive times ultimately change with autonomous vehicles? Maybe, but it's unlikely to be by this much. I hate long road trips and the same would be true even if a robot were driving me. So I look forward to one day — in my 50s? — doing this journey in 3 hours. If we could get it down to 2 hours and change, that much better. That's a trip worth taking for a night out or just to stock up on bagels.
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