If you lose a lot of money in a speculation, you may have to sell valuable assets like gold, houses, or stocks that you would have preferred to keep for the long term. Real estate investors also need to reassess their portfolios to ensure they have enough cash on hand and to limit their losses. While large investment funds and dark pools have suffered significant losses in the stock market, retail investors have faced even harsher consequences. These big players use advanced algorithms to buy and sell quickly, while everyday investors are left feeling stuck and frustrated. This is why the DOW and S&P can swing dramatically, sometimes changing by 500 points within a few hours. Retail investors often find themselves at a disadvantage. See below for strategies to consider.

When someone speaks, “A large stable real estate investment portfolio in Canada and the US. What to sell? Or keep all and ride it out?”—what they’re really asking isn’t just about asset allocation. It’s a layered question packed with economic, psychological, and even philosophical subtext.

Here is what I am thinking

First, the phrase “large stable portfolio” already implies a certain kind of privilege and positioning. You’re not scrambling for liquidity or reacting to a short-term market shock. This is someone with the luxury of choice, and that luxury always carries with it the burden of strategic foresight.

Then there’s “Canada and the US.” That’s a cross-border footprint, which signals diversification—but also exposes you to two different monetary policies, housing markets, regulatory landscapes, and demographic trends. It also suggests that whoever’s asking this is no amateur. They’ve played the long game. They’re probably holding a mix of residential, commercial, and maybe some industrial. Possibly REITs or direct holdings, too.

Now, let’s get into the meat: “What to sell?” That question alone tells me they’re sensing some stress in the system—maybe rising interest rates, flattening cap rates, softening rental markets, or even political headwinds. But they’re not panicking. They’re weighing the classic investor dilemma: Do I rebalance, or do I double down?

But then comes the alternative: “Or keep all and ride it out?”—and this is where the psychology gets interesting. That’s the language of someone who’s weathered cycles before. They remember 2008. Maybe even 1991. They know the pain of selling at the wrong time, and the payoff of long-term patience. There’s a confidence there—but also a fear of missing the signal that this time might actually be different.

The real implicature here? It’s a question about timing. It’s about conviction. And it’s about clarity in the face of complexity.

My answer? It depends what your thesis is. If your portfolio’s weighted toward office or retail, especially in secondary cities, you might want to trim before the fundamentals deteriorate further. If you’re heavy in multifamily in immigration-fueled urban cores, that might still be your strongest defensive play. Industrial? Logistics? That’s still got tailwinds, though valuations are tight.

But let’s be clear—this question isn’t just about real estate. It’s about positioning for the next 5–10 years. If you’re asking what to sell, you’re really asking: What no longer fits my thesis? What won’t survive the next macro cycle?

Ride it out? Sure—but only if you know what you’re riding into.

Canadian high-net-worth or well-qualified investors with diversified portfolios. My warning remains informed, earnest, and instructive—without alarmism, but with a clear call to act thoughtfully.

When I speak with seasoned investors—especially those with sizable, diversified real estate holdings across Canada and the U.S.—one question keeps resurfacing: Do I hold, or do I trim?

Now, if you’re asking that, you’re likely already diversified. You’re not new to this. You’ve built your portfolio over decades, through cycles, through downturns, and you understand real estate as both a hedge and a long play. But we also need to acknowledge the new variables in play—rising interest rates, stubborn inflation, and, yes, political volatility on both sides of the border.

Let’s not sugarcoat it: the political climate in Canada has shifted. Regulatory creep, tax policy changes, uncertainty in housing mandates—these things aren’t just academic. They’re impacting investor confidence, and eventually, values. Meanwhile, north of the border, we’re watching an election cycle with real implications for cross-border capital, taxation, and risk.

So, here’s the reality: real estate is still a stable asset class—but it is not immune. And timing matters. In fact, it’s the second principle after quality. And sometimes the most prudent thing you can do is step back, take a pen and paper, and actually write it out. That clarity is priceless.

REAL ESTATE PORTFOLIO ASSESSMENT ACTION PLAN
Analyze first, then act.

Let’s strip away the emotion and go to brass tacks. If you’re sitting on a large portfolio and you’re sensing headwinds—or you just want to get sharper about what you’re holding—start with this framework:

1. Sell the nonessential.
If anything needs to be sold, it should be the real estate that isn’t doing any heavy lifting. Recreational properties, vacant land, speculative building lots—these might have seemed like great bets a few years ago, but if they’re not cash flowing, they’re now liabilities, not assets. They’re also the least painful to part with.

2. Get out of high-risk, underperforming assets.
If we enter a prolonged downturn, the weakest links will break first. That means:

• Properties with sustained high vacancy.
• Units under rent control caps that no longer match market costs.
• Secondary or tertiary markets with limited economic resilience.

3. Exit leveraged properties.
Leverage cuts both ways. In rising markets, it accelerates gains. In downturns, it accelerates loss. If you’re holding highly leveraged properties and cash flow is thinning, those are your red flags. Rising rates or tenant turnover can trigger serious liquidity issues. If you’re not already underwater, consider offloading now. If you are underwater—triage becomes essential.

4. High maintenance = high risk.
Older buildings, deferred maintenance, unpredictable capital expenditures—these will bleed you. And lenders are starting to scrutinize these assets more closely. If you’re holding property that eats cash more than it generates it, it’s time to re-evaluate its place in your portfolio.

5. Volatile markets = unpredictable exits.
We’ve seen softness in certain urban cores, and even more so in economically stagnant towns. If market values are declining and you’re banking on appreciation to justify the hold—stop. Sell what you can while there’s still liquidity.

6. Consider leasebacks.
If you’re holding quality income property but need capital, explore a sale with a leaseback structure. You maintain operational control, preserve optics, and get liquidity—fast. It’s a sharp move when used judiciously, especially if you’re looking to quietly offload without signaling distress.

7. Look at private capital.
There is a ton of private money right now looking for secure, income-producing real estate. If you’ve got solid assets but need capital, private financing might be an option. Yes, rates are higher—but if it bridges the gap and buys you time, it may be a lifeline.

Here’s the bottom line:
Your goal is simple—preserve capital, protect income streams, and position for the next cycle.

You don’t have to sell everything. But you do have to evaluate everything. You know your portfolio—warts and all. Now is the time to reassess not only the return each property offers, but the risk it carries into the next 3–5 years.

A correction isn’t coming—it’s already begun. And those who act from clarity, not fear, will find themselves ahead when the dust settles.

So sit down. Do the math. Get real with yourself. And if a property isn’t serving the mission—let it go.

When I get asked, “Have you changed your long-time stance on the U.S. dollar as the world’s reserve currency?”—especially after a sudden drop like we saw last month—my answer is consistent: No, I haven’t changed my stance. But I’m also not blind to the current landscape. There are real headwinds—some cyclical, some political, and some psychological.

Let’s break it down properly.

Q: HAVE YOU CHANGED YOUR LONG-TIME STANCE ON THE US DOLLAR REMAINING THE WORLD’S RESERVE CURRENCY?
A:
No. I still believe the U.S. dollar will maintain its position as the world’s dominant reserve currency over the long term. Why? Because there’s still no viable global alternative that can match the depth, liquidity, and trust of U.S. capital markets. But let’s not confuse long-term conviction with short-term naiveté.

What we’re seeing now is a crisis of confidence—not in the U.S. economy per se, but in its governance and predictability. And that matters.

Here’s what’s got investors spooked:

Massive world debt—both sovereign and corporate. When global debt climbs, flight to safety usually supports the dollar. But…

Uncertainty around U.S. leadership. Trump’s recent sparring with the Fed Chair, erratic trade posturing, and campaign rhetoric have created a level of unpredictability that rattles foreign holders of U.S. assets.

Tariff and trade war talk. Tariffs may serve a political or economic goal (more on that in a moment), but they inject risk and raise fears of retaliatory slowdowns globally.

Capital repatriation. We’re seeing overseas investors take chips off the table—moving capital back to home currencies or toward gold, commodities, and even crypto. That’s why we’re seeing downward pressure on the greenback.

But here’s your signal: Watch the U.S. bond market.

Last month’s selloff in Treasuries and capital flight were warning shots. If we see sustained outflows and rising yields without clear Fed control or dollar support, we could see the USD in a prolonged range-bound or lower position.

Short-term pain? Yes.
But the long-term reserve status? Still intact—unless Washington actively dismantles it.

Q: WHY THE TARIFFS?
A:
It’s easy to dismiss tariffs as political theater. But with Trump, there’s always a playbook—chaotic as it may look. If you’ve read his books, you know his approach to negotiation: incremental pressure through multiple rounds. It’s not about winning quickly—it’s about exhausting the other side into submission.

Here’s what’s really going on:

Trump’s Tariff Strategy—Whether You Like It or Not:
Objective #1: Revenue. Tariffs generate cash. Simple as that. In a high-debt economy, it’s a revenue tool—especially when other taxation pathways are politically toxic.

Objective #2: Onshoring. It’s about bringing manufacturing and supply chains back to the U.S., even at the expense of short-term market stability.

Objective #3: Reset trade norms. He’s trying to reframe global trade not as a collaborative system but as a bilateral, tit-for-tat game where “fairness” means symmetrical tariffs. That means one thing: universal tariff alignment across all trading partners.

Will it work? In theory, perhaps. In practice, it distorts the system in the short run. Tariffs introduce inflation, disrupt global pricing, and sow uncertainty in boardrooms from Berlin to Beijing. But Trump’s goal is to lower the dollar (to help exports), cut taxes, slash regulation, and tighten the border. It’s a classic populist economic strategy—but with real economic shockwaves.

What You Need to Know as an Investor:
This isn’t a one-round match. It’s a campaign. Tariffs will come in waves—some country-specific, others sector-specific.

Short-term distortion is the point. That’s how he creates leverage.

The “tariff talk” dominates news cycles. But behind that noise, there’s strategic intent.

Markets don’t like uncertainty. And tariffs, by design, introduce it. So while the dollar weakens short term, the pressure it creates may—in Trump’s mind—force renegotiated terms that eventually stabilize the playing field.

Will it work? We’ll see. But in the meantime—don’t trade on emotion. Trade on macro signals.

Final Word:
If you’re holding USD-heavy assets, real estate in U.S. metros, or cross-border exposure—now is the time to stress-test your dollar assumptions. If the USD stays soft, your purchasing power and cap rate math change. If it rebounds, you’re suddenly holding premium-priced assets with a tailwind.

Either way, be proactive. This is the time to review your forex strategy, hedge where necessary, and consider scenarios.

Strategic Advisory Bulletin: Q2/2025
From the Desk of MSD ZAZL HAUS  — Senior Advisor, Real Estate and Capital Strategy
Subject: Protecting Principal, Positioning for the Next Cycle, and Making Capital Work Harder Than Ever

1. First Principles: Real Estate Remains Stable, But Not Immune
Real estate has long been the cornerstone of wealth preservation. But let’s not romanticize it. Even stable assets can erode under misaligned timing, poor structure, or policy headwinds. And that’s what today’s landscape requires us to re-examine.

The political and economic winds have shifted. Interest rates remain stubbornly elevated. Inflation, while cooling on the surface, continues to pressure operating costs. And governments—particularly in Canada—are increasingly unfriendly toward private capital in housing. If you’re a well-qualified investor with a sizable cross-border portfolio, this is not the time to go passive.

You need to look at every asset—warts and all—and reallocate toward what works now, not just what worked five years ago.

2. Currency Watch: The U.S. Dollar Is Still King—But the Throne Wobbles
Have I changed my stance on the USD as the world’s reserve currency? No. Long-term fundamentals still back it: unmatched liquidity, military dominance, and trust in U.S. capital markets.

But short-term, we’re in choppy waters:

• Political volatility in the U.S. (Trump vs. the Fed, tariff sabre-rattling)
• Global debt anxiety
• Trade frictions pushing overseas capital back to domestic havens

The result? Last month, the USD fell hard. And if capital continues exiting Treasuries, we’ll see the dollar stuck in a lower band. This affects cross-border investment returns, cap rates, and currency translation risk.

Investor takeaway: Stress-test your USD assumptions, hedge strategically, and watch bond markets more than central bank headlines.

3. Real Estate Portfolio Action Plan: Analyze First, Then Act
If you hold a large real estate portfolio in Canada or the U.S., here’s your immediate framework:

Sell assets that are:

• Underperforming (low rent, high vacancy)
• High maintenance (capex rising, deferred upkeep)
• In volatile or shrinking markets (watch secondary cities and retail/office sectors)
• High leverage (mortgage payments outpacing income)
• Non-essential holdings (vacant land, recreational, legacy building lots)

Consider:
Sale-leasebacks to unlock capital without losing operational control

Private capital as a strategic refinance alternative (yes, rates are higher—but the money is there)

REIT exposure in essential sectors (industrial, multifamily, medical) for diversification

Your priority:

✅ Preserve capital
✅ Maintain income streams
✅ Position for a recovery while others are still in crisis mode

4. Tariff Noise, Political Posturing & The Real Strategy Behind It
There’s more going on beneath the surface. When clients ask, “Why all the tariffs again?” the answer isn’t just economic—it’s strategic. Trump isn’t aiming for short-term equilibrium. He’s using tariffs as a negotiating tool across multiple rounds, targeting:

• Universal tariff alignment
• Onshoring and supply-chain reshoring
• Lower USD (export boost)
• Regulatory rollback and tax cuts

Distortion is the short-term price. But watch for long-term structural shifts in trade and capital movement. Don’t get caught flat-footed. This is policy volatility masquerading as economic chaos.

5. Cash Flow is King: Rent Luxury, Buy Yield
Let’s flip the script.

Luxury homeowners often sit in multimillion-dollar properties that do nothing but cost money. That may be fine in boom times. But in 2025? It’s a capital trap.

Here’s a real example:

A client owns a $5M luxury home.
Property tax: $33,000/year
Common area costs: $3,500/month = $42,000/year
Total: $75,000/year in non-income-generating costs

Alternate strategy:
Rent that same property for $9,000/month ($108,000/year).
Then invest that $5M in cash-flow real estate:

25 condos at $200,000 each in Edmonton, Calgary, or Florida
Each rents for ~$2,000/month = $50,000/month gross
Net after costs: $42,500/month = $510,000/year net income

You spend $33,000 more in rent—but pocket $477,000 in annual net income. And you still live in the luxury home, free from tax increases and capex risk.

Now run the numbers for yourself:

• Add mortgage costs if you financed your primary residence
• Compare REIT alternatives with yield + liquidity
• Run net income scenarios across cash-flow jurisdictions

Smart capital doesn’t get sentimental—it gets strategic.

6. Where to Move Capital Now
Looking to reposition?

Focus on yield, liquidity, and jurisdictional resilience.

Consider:

• Edmonton & Calgary: Still affordable, high rental demand, business-friendly governance
• Florida: Migration tailwinds, tax haven, strong property rights
• Private REITs / Syndicates: Especially those in logistics, affordable housing, or healthcare
• Sale-leasebacks / NNNs: Secure, long-duration income

Also consider private lending, structured debt, or JV equity if you want to stay in real estate but not on the operations side.

In Summary: This Is a Time for Tactical Thinking, Not Passive Holding
If you’ve built a strong portfolio, well done. But strength today doesn’t guarantee resilience tomorrow.

What matters now is:

• Knowing exactly what each asset does for you
• Getting brutally honest about what no longer fits your strategy
• Making capital work smarter, not harder

And remember: the best repositioning happens before the crowd wakes up.

Let’s talk soon. Bring a notepad, your numbers, and a clear head.
We’ll cut through the noise—together.

MSD
Senior Advisor , ZAZL HAUS
info@zazl.com
Confidential Strategic Advisory – Q2 2025