Welcome to the Real Estate Espresso Podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce.

On yesterdays show we talked about the employment numbers for the US from payroll processing company ADP. The ADP numbers were a weak but in my view accurate reflection of the state of the labor market in the US Today the Bureau of Labor Statistics published their employment report for January.

I’m here to tell you to skip the headline and in particular pay attention to the part most people skip, the revisions. Because right now, the revisions are the story.

The headline for January 2026 says total nonfarm payroll employment rose by 130,000, and the unemployment rate held at 4.3%.

If you stopped there, you might conclude the labor market is reaccelerating. But here’s the problem. In the same release, the BLS tells us that the entire year of 2025, after benchmark revisions, amounted to only +181,000 jobs on a seasonally adjusted basis. Think about that. One month, January 2026, prints 130,000, which is roughly the same magnitude as the entire net job growth for all of 2025. That should make you skeptical, not euphoric.

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**Real Estate Espresso Podcast:**
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**Y Street Capital:**
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We regularly look at macro economic data to forecast interest rates. Interest rates affect one of the three main variable associated with any project. Those three variables are construction costs, capital costs and rent. Everything else is a rounding error by comparison.

We are expecting new payroll data from the bureau of labor and statistics later this week. However, those numbers are full of approximations and adjustments. To me, the most reliable data actually comes from private enterprise which is the real time payroll data from ADP. The ADP data is not a survey or a statistical sample. It’s the real data taken from real payroll transactions in the past month. We’re going to start with the employment data and then look at bond yields. We know that the Fed funds rate has dropped 75 basis points in the past year. But the yield on the 10 year treasury has hardly budged in spite of everything that has happened. So let’s start with the payroll info and analyze from there.

The latest ADP National Employment Report, released on February 4, 2026, indicates a significantly cooling U.S. labor market. Private sector employment grew by only 22,000 jobs in January, falling well short of the Dow Jones consensus forecast of 45,000.

If we look by sector, the modest growth was almost entirely propped up by Education and Health Services, which added 74,000 jobs. Without this surge, the overall private sector numbers would have been negative.

Treasury yields generally shifted lower as the market reacted to the signs of a rapidly cooling labor market. This trend was amplified by a "flight to safety" as investors moved out of riskier assets like equities and into the relative security of government bonds.

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**Real Estate Espresso Podcast:**
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Website: [www.victorjm.com](http://www.victorjm.com)
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)
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**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)
Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

Today we’re going to connect two stories that, on the surface, look very different. One is Japan, where government bond yields have been rising, and the commentary on financial social media is busy declaring Japan is “blowing up.”

The other is the spring of 2023 in the United States, when Silicon Valley Bank, Signature Bank, and First Republic, all failed within weeks of each other.

These events rhyme because the underlying physics is the same. Duration risk plus leverage plus flighty funding can turn a paper loss into a real loss in about a weekend.

Let’s start with the basic math. When interest rates rise, bond prices fall. That’s not an opinion, that’s bond arithmetic.

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**Real Estate Espresso Podcast:**
Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)
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Website: [www.victorjm.com](http://www.victorjm.com)
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)
YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)
Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)
Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)
**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)
Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

Max Hansen has been practicing lawyer at the forefront of tax sheltering for nearly 50 years. His company was acquired by Accruit where he is now a senior partner. On today's show we are talking about structures for fractional ownership of property that can be sheltered from capital gains tax.

To connect with Max and to learn more, visit https://accruit.com or email him directly at maxh@accruit.com. He can also be reached at 800-237-1031.

-----------

**Real Estate Espresso Podcast:**
Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)
iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)
Website: [www.victorjm.com](http://www.victorjm.com)
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)
YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)
Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)
Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)
**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)
Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

Robert Siciliano is based in Boston where he specializes in digital security for businesses. On today's show we are talking about closing up a few of the wide open vulnerabilities that most businesses are exposed to.

To connect with Robert visit protectnowllc.com

-------------

**Real Estate Espresso Podcast:**
Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)
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Website: [www.victorjm.com](http://www.victorjm.com)
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)
YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)
Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)
Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)
**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)
Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

On today’s show we are talking about an office turnaround that can serve as a powerful lesson for all investors.

This is a single office building in downtown Toronto, 70 York Street, and why its turnaround is one of the most practical case studies we have for navigating what many are calling the office apocalypse.

It’s a story about control, execution, and the discipline to create certainty in an uncertain market.

Let me set the stage. 70 York is a 17-storey office building of roughly 210,000 square feet, connected to the PATH system, a well located asset in Toronto’s core. It’s not a brand new glass tower, it’s a mid-80s vintage building with the kind of fundamentals that can still work, if you can get the leasing right. And then it lost its anchor tenant, HSBC.

When a building is empty, it’s tempting to cut rent to fill space. But cutting rent is not the only lever, and it’s often the most destructive lever. What you want is durable tenancy, credit quality, and term length.

The reported 6.8-year average lease term tells you KingSett pursued durable income. That matters for refinancing. It matters for valuation. And it matters for the eventual buyer.

Which brings us to the exit.

The building was sold off-market to Desjardins Global Asset Management and the Desjardins Group Pension Fund for about $134.6 million, reported at roughly a 6.5 percent cap rate and about $639 per square foot.

In a world where office transactions are scarce, and capital is cautious, an off-market institutional sale tells you something. It tells you that stability, even in an office market, still has a buyer.

But notice the order of operations. They didn’t sell a vision. They sold certainty.

-----------

**Real Estate Espresso Podcast:**
Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)
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Website: [www.victorjm.com](http://www.victorjm.com)
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)
YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)
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Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)
**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)
Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

On today's show I'm sharing an observation on the psychology of change and how it is impacting both investing and the voting public.

------------

**Real Estate Espresso Podcast:**
Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)
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Website: [www.victorjm.com](http://www.victorjm.com)
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)
YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)
Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)
Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)
**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)
Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

Every gold rush is followed by a hangover. That’s been true throughout history. It happened during Tulip Mania from 1634-1637.

There was a gold rush in railways in the 1830’s in the UK and then later in the 1870’s to the 1890’s in the US and Canada.

There was an actual gold rush in 1896-1899 in the Klondike region of the Yukon close to the border with Alaska. It happened with automobiles in the early 1900’s.

It happened in radio and then in TV, and then with the Internet.

But seriously folks, this time it’s different, this AI thing is here to stay and the projections for its impact on the economy are well quantified.

There are an increasing number of tools that are showing maps of both existing and planned data centres.

The limiting factor for new data center investments is often described as being infrastructure related. That means optical fibre, large supply of base load electricity, and in many cases, ample water supply to provide cooling.

The latest tool is a new open source database on a map called The IM3 Open Source Data Center Atlas. It provides locations and facility footprints (when available) of existing and projected data centers across the United States (U.S.).

-------------

**Real Estate Espresso Podcast:**
Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)
iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)
Website: [www.victorjm.com](http://www.victorjm.com)
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)
YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)
Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)
Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)
**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)
Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)