You know you’re getting – I was going to say “old” but I will use the word “experienced” – when you want to reprint old articles. 

But I will do that since I just read the article I linked to below and – boy, is this strange – almost every word I wrote about ten years ago (2017, to be exact) is true today.  Before getting there, I mention that long ago during the South Sea Bubble, this advertisement appeared in a newspaper:

"Carrying on an undertaking of great advantage; but nobody to know what it is.”

Supposedly, despite the absolute lack of information about the business, investors invested anyway.  It is an anecdote for the peak of speculative frenzy.

Okay, people are much smarter now, aren’t they?

Well, in the Wednesday, January 27, 2026 Wall Street Journal, they were talking about something called Neolabs – which are companies worth more than a billion dollars but have no products and no revenues.  They just have smart guys in a lab.  If you think I am exaggerating, take a look at the article:

These Billion-Dollar AI Startups Have no Products, No Revenues and Eager Investors

I do love the name of the Neolab they mentioned.  It is called, Flapping Airplanes.  According to the article, there are “dozens” of these with a valuation of $1B or more and some worth over $10B.

You know, we get numb to the word billion since it seems so trifling nowadays. 

Flapping Airplanes is “worth” $1.5B. 

Another one called Humans& is worth $4.48B.  Reflection AI is $8B.  And another one, called Safe Superintelligence, is valued at $32B. 

Good grief!

Is AI changing the world in a big way?  For sure.  But are these dozens of AI Neolabs going to be worth the zillions of dollars?  Sounds nuts to me. 

If this aren’t signs of over-exuberance, I can’t imagine what is. 

Okay, but now look at what I said ten years ago – i.e. in my linked article below.  Two things stand out:

  • First – I was totally wrong about my predictions.  Or, maybe I was right, that we were indeed in a bubble but ten years later it hasn’t mattered?
  • Second – kinda creepy – but almost all the things I said ten years ago about over-exuberant markets are almost the same today.

I urge you to take a moment – read my article – and do some assessment about what you might do if the bubble does burst.  Is there a way to not get hurt or maybe even profit from it in the real estate world?

Some ideas are:

  • Longer term financing is a wonderful concept – so if there is a calamity you can ride it out.
  • PACE financing by the way is very long-term – more about that in a coming article.
  • Diversifying – as I have pointed out in a whole bunch of articles.  This would include tenant mix, asset mix, geography mix, and any other way of diversifying.
  • Be mindful that if bubbles burst interest rates might go up a lot or down a lot.  You cannot predict. 
  • Consider things that people simply cannot be without, i.e. a place to live and buy staples, and have that be a decent part of your portfolio.  Even during COVID I think most multifamily rents were in the range of 95% collected.
  • If you are a sponsor/developer, make sure your assets are not tied together through guaranties or cross-collateralization.  If there is a real bubble pop some of your assets will get hurt – and there really is nothing you can do about that other than not invest in the first place – but it is one thing to lose a few eggs out of the basket as opposed to losing the basket itself.
  • If you are a lender, do the opposite of the preceding paragraph and, for heaven’s sake, don’t have a repo line that can be called at the worst possible moment to completely put you out of business.  Note-on-note financing and similar structures have more logical risk/reward profiles. 
  • I guess there are potentially hedging strategies, but my guess is that the costs of the hedges make them more expensive than simple diversification would be.  I mean that odds are still that things will be fine going forward for quite some time one way or another. 

Lastly, my usual warning, to not try to time the market.  No one knows what will happen.  The best prediction of tomorrow is today.  I might be right that there is a bubble that bursts in 20 years, which means I was of course wrong. 

As a last thought, I will add that maybe I was actually right about a bubble ten years ago, but maybe it never really burst because various world governments (including ours) cleverly kept the balloon aloft by creative financial accounting and ballooning deficits.  If so, this means that the bubble has only gotten bigger and bigger.  If so, when it bursts it will be pretty rough on us all.  Accordingly, even if I am totally and completely wrong about there being a bubble in the first place, I do think it does behove us to think about solid preparation, just in case.  

And now for my prior article from 2017, Double Trouble – We’re in a Massive Bubble.
 

Bruce Stachenfeld aka The Real Estate Philosopher™