Happy Friday. This is The Shake 🤝 : the free weekly newsletter that goes along perfectly with a (not so free) cup of joe in the morning.

Here’s what we're dishing up this week:

• Small But Mighty 🏘️ 

• Double Shot of Espresso & Real Estate, Please! ☕️ 

• Weekly Giveaway 🎰 

MARKET RADAR

Small But Mighty 🏘️ 

When you think of your dream home, you probably don’t imagine it being a total of 450 sqft. Truth is, one of the richest people in the world is living in just that… and loving it.

It begs the question: can tiny homes be a solution for affordable housing in America?

Rising in popularity after the GFC, tiny homes appeal as a less expensive and more accessible option for people who can’t find or afford traditional homes. A recent Home Advisor survey of 1,800 Americans found that 86 percent would live in a tiny home, and 79 percent would put one on their property. 

Of those who would buy a tiny house, 68% said they would consider buying one as their first home.

What are the specs of a tiny home?

• Typically less than 500sqft

• Stand alone on their own piece of land or accompany a larger property (ADU)

• Thoughtful design to maximize usage and functionality

• The average cost per square foot is $150

• The average price range can be as low as $8k and as high as $150k

This movement birthed companies like Boxable and Cover, who are re-imagining the manufacturing process for the ‘Next-Gen’ in housing.

Boxable has a $50k price tag on an ‘out of the box’ 375 sqft casita that can be delivered anywhere across the country with its foldable and lightweight features. With a full kitchen and bathroom, it’s an ideal option for affordability.

Meanwhile, Cover is focused on the luxury side of the ADU realm (to start). Using a modular building framework for fast production and installation of chic interior design and finishes. Their mission: building homes with algorithms and production lines is the future of better homes for everyone.

Another driving force behind this movement is the desire to minimize waste and energy use. Home building and operation is responsible for 26% of global greenhouse gas emissions, or 8 gigatons of CO₂ per year.

Covers can reduce energy usage by 75%—that’s 4.5 gigatons of CO₂ saved yearly.

Let’s take a look at where most of these tiny homes are located 👇️ 

The west coast takes the cake for tiny living, with off-the-grid locations in states like California and Colorado spurring growth.

Now there are some challenges associated with tiny homes, such as zoning laws and building codes, that can make it difficult for people to legally live in them.

Given this, tiny homes can be one solution to the problem of unaffordable housing, but they are not a complete solution on their own. They should be considered in conjunction with other affordable housing options such as community land trusts, cooperative housing, and affordable housing subsidies.

Yes, they can be cheaper to build and maintain than traditional houses, and they can be an option for people who want to live with less stuff and a smaller environmental footprint. However, tiny homes are not for everyone as lifestyles and needs change over time.

Although, it will be interesting to keep a close eye on how the traditional homebuilding process may be disrupted due to the tiny home movement.

Double Shot of Espresso and Real Estate, Please! ☕️ 

Did you know that Starbucks owes its rise to fame not just to its delicious java, but also to its real estate prowess?

That's right - finding the perfect location has been key to the coffee giant's initial growth and market domination.

As savvy investors have noted, Starbucks' success is as much about its prime real estate as it is about its unique coffee blends and cozy atmosphere. In fact, Starbucks locations have become such a hot commodity that they're now a top choice for net lease investments.

So next time you're sipping on a latte at your local Starbucks, take a moment to appreciate the smart real estate moves that helped put it on the map.

Coffee shops have been scooping up some of the most prominent pieces of real estate nationwide over the last few decades in some of the hottest markets. It feels like everywhere you turn there’s another Dunkin’ or Starbucks.

I was driving today and I finally had to look it up:

Yep. Over 24 THOUSAND combined. Starbucks (15,041) and Dunkin’ (9,570) are the behemoths in the coffee industry and are also seen as great investments for the long term.

The average Dunkin is trading between a 4.5 - 5.0 Cap, with Starbucks coming in at the same range averaging at 4.62, per Net Lease Advisor.

That being said, are they starting to be challenged? Maybe Caribou Coffee is next up when it comes to coffee, at least in the Midwest…

Caribou, part of Panera (can’t lie I’m not a fan of their coffee at all), has been on a recent tear. Founded in 1992, Caribou Coffee has been growing at a rapid pace in markets that we can’t imagine Starbucks is nearly as focused on.

Fifty units in Michigan? I guess they don't call it the Great Lakes State for nothing. And 24 units in Missouri? That's...well, that's actually kind of random. But hey, who am I to judge? Maybe the people of Missouri are in desperate need of some good coffee.

All joking aside, this is great news for the real estate market, and they’re not the only ones doing it. Just look at other coffee shops like Dutch Bros, 7Brew, Scooter’s, and more.

Caribou is clearly focusing on the Heartland and finding success there, and it’s an interesting case study to see how America’s coffee addiction plays into an enormous real estate play. It’s hard to say that anyone will be seen as high of a value as Starbucks though, who opened up 763 new stores in Q4 to end the year with 35,711 stores globally.

Let’s continue on with seeing how much the country’s real estate “runs on” the success of these coffee retailers.

WEEKLY GIVEAWAY 🎰 

Together With Closing Packs

To end each edition, we will be sending one lucky subscriber a special item!

This week’s item is an OrbitKey.

How do you win?

We are going to post a closed transaction with some high-level details and whoever can guess the right sale price, wins.

If nobody gets it right, the closest guess wins. If two people get it right (screw us right?!) we will hook you both up!

Let’s kick it off 👇️ 

This modern farmhouse tiny home is 300+ sqft with 2 bedrooms and 1 bathroom. It’s mobile too so if you like the view, change it!

As The Migos would say… What The Price?

FIN 🤝 If you enjoyed this week's edition, don’t be selfish — share with a friend!

^{DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.}