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š¬ What Happens in Europe, Doesn't Stay in Europe
EU regulations make their way into the US via the California-to-Federal government pipeline.
Happy Saturday morning to everyone on The Street. Weāre back in your inbox with a special weekend edition.
While sipping your morning coffee, waiting in line at Home Depot, or simply relaxing for a second, we hope you enjoy the post below titled, What Happens in Europe, Doesn't Stay in Europe.
This article originally appeared in The Last Cast Letter, our monthly digest that discusses real estate market trends and private investment opportunities.
The next edition will be published on May 31 so use this one-click automatic link to sign-up.
Also, before we dive in, have you ever heard of a $0.25 trade? Todayās partner can show you how to access high-growth stocks without the high-buy in.
PARTNER CONTENT
Did you miss out on NVIDIA's historic rally? Youāre not alone.
Even before the rally, a single share already cost hundreds of dollars. By the time you got word of the bull run, it probably cost a couple hundred more than the day before.
Whether or not a stock seems like a sure bet, $500 - $1,000 is a daunting buy-in.
When a blue-chip stock gains more than 200% in 12 months, youāre going to hear about it everywhere.
But it wasnāt traders like you who benefited from it. It was Wall Street bankers with immense means, sky-high risk tolerance, and almost-too-perfect timing.
Now, you can access high-growth stocks, without a high buy-in.
In his four decades on Wall Street, Tom Busby discovered a new way to tap into what may well be the cheapest options on the market.
With Tomās pioneering $0.25 Trades method, the average return was more than 200% over the last month, with just a 1 day average hold time.*
Act now to access Tomās TBUZ TV broadcast, with important overnight market updates, finely tuned investment strategies, and details on the next $0.25 Trade.
Last Cast Letter #16: What Happens in Europe, Doesn't Stay in Europe
Today weāre going to take a quick trip across the pond. But donāt worry, weāll outline how whatās happening in Europe, doesnāt stay in Europe.
You see, when it comes to properties on the old continent, fossil-fuel boilers are out, and solar-panel-ready buildings are in ā and this isn't an organic trend among eco-friendly investorsā¦ it's the law.
Last month, the European Union passed the Energy Performance of Buildings Directive. It's a boring-sounding name, right?
Well, hidden behind that innocuous name are some serious ramifications for European real estate owners and investors.
And those ramifications could come home to roost in the US.
A Look at the EUās āGreen Homesā Directive
The new EU regulations are designed to force property owners to undertake large-scale renovations to help the region meet the environmental standards set by the Paris Agreement.
The EU āGreen Homesā directive mandates the following:
All new buildings must be emissions-free by 2030.
Property owners must renovate at least 26% of the continent's most energy-intensive buildings by 2033
Achieve a zero-emission and fully decarbonized building stock by 2050
While those are certainly lofty goals, the EU seems serious about meeting them regardless of the economic implications.
According to its analysis, the EU believes property owners will need to cough up an additional ā¬275 billion ($300 billion) a year to renovate properties and meet the directive's milestones.
If anything, that cost estimate may come up short, considering a whopping 85% of European buildings were constructed before 2000, of which 75% of them have a "poor energy performance rating."
How It Will Impact Europe
In case you thought we had it rough here in America, European real estate investors have also faced historically high interest rates. And now, to top it off, they're facing substantial writedowns from the Green Homes directiveā¦ doesn't that sound fun?
If property owners don't make costly renovations to reach those Environmental Protection Certificate (EPC) benchmarks in time, their assets' value will tank because renting the space will become illegal.
The impact may hit hardest in the corporate real estate sector. Kim Politzer, head of European real estate research at Fidelity, sees stricter EPC rules creating a "regulatory cliff for unrentable European offices" as vacant buildings with poor environmental ratings will likely be left unrenovated.
In practice, the EU directive means that the little guys simply won't be able to afford to comply with the legislation, while firms with massive portfolios will be able to keep their heads above water.
Will It Hit the US?
It's nice to imagine that sweeping European regulations couldn't possibly make their way across the pond and impact us domestically, but history and California have shown this to be wishful thinking.
Let's take a walk down memory lane of just some of the times California has replicated European regulation trends:
EU's Emissions Trading System ā”ļø CA's Global Warming Solutions Act
EU's REACH Regulation ā”ļøCA Expands Proposition 65
EU's Waste Framework Directive ā”ļø CA's CalRecyle program
EU's Environmental Impact Assessment Directive ā”ļø CA's Environmental Quality Act
EUās General Data Protection Regulation (GDPR) ā”ļø California Consumer Privacy Act (CCPA)
European regulations make their way into the United States via the California-to-Federal government pipeline.
We've already seen California mandate real estate reporting on climate risks, and the Biden administration announced its first-ever Federal Building Performance Standard to cut emissions on federally owned land (eerily similar in format to the EU's Energy Performance of Buildings Directive).
In other words, if you have a long-term investing outlook, it might be time to:
Buy eco-friendly properties in both the EU and US (unless something changes this coming November)
Find European REITs that are overexposed to aging office space on the old continent
PARTNER CONTENT
Did you miss out on NVIDIA's historic rally? Youāre not alone.
Even before the rally, a single share already cost hundreds of dollars. By the time you got word of the bull run, it probably cost a couple hundred more than the day before.
Whether or not a stock seems like a sure bet, $500 - $1,000 is a daunting buy-in.
When a blue-chip stock gains more than 200% in 12 months, youāre going to hear about it everywhere.
But it wasnāt traders like you who benefited from it. It was Wall Street bankers with immense means, sky-high risk tolerance, and almost-too-perfect timing.
Now, you can access high-growth stocks, without a high buy-in.
In his four decades on Wall Street, Tom Busby discovered a new way to tap into what may well be the cheapest options on the market.
With Tomās pioneering $0.25 Trades method, the average return was more than 200% over the last month, with just a 1 day average hold time.*
Act now to access Tomās TBUZ TV broadcast, with important overnight market updates, finely tuned investment strategies, and details on the next $0.25 Trade.
Looking for More From Last Cast?
Last Cast Letter #15: Stuck Between a Rock and a Hard Place. Breaking Down Mortgage Rate Forecasts
Last Cast Letter #14: The Boomer Butterfly Effect. How American Boomers impact home-buying in Barcelona.
Last Cast Letter #13: Junk Fees. This state might be a canary in the coal mine for the rest of the country.
Last Cast Letter #12: 2024 Outlooks, Aggregated. We aggregated what big firms are saying about CRE for the upcoming year.
Last Cast Letter #11: The Deion Sanders Effect. Plus, a deep-dive on the past, present, and future of Real Estate crowdfunding
*Disclaimer: The profits and performance shown are not typical, we make no future earnings claims, and you may lose money. The testimonials discussed are from our subscribers but are not independently verified nor typical for every user. Over the last month we have had 4 live trades with a 75% win rate and the average return of winners and losers being 201.7% over a 1 day average hold time.
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