The Quiet Before The Storm

 

McKae Capital Management: The "Quiet Before" Phase

Gary McKae

Managing Partner at McKae Capital Management| In-House Deal Maker & Fiduciary Strategist | Wharton & CIMA® | Specializing in Institutional Land Subdivision & Asset Salvage”

March 24, 2026

Strategic Update: March 24, 2026

Think back to February 2020. Life felt normal, travel was planned, and the "virus overseas" seemed like a distant headline. Then, in three weeks, the world rearranged itself.

I believe we are currently in the "This Seems Overblown" phase of a shift much larger than the pandemic. In our last update, we discussed the "Family Exodus" from Silicon Valley. Today, we look at the why: The structural automation of the white-collar backbone.

1. The 50% Problem: A Shift in the "Camelot" Economy

Industry insiders in the AI space are no longer speaking in "ifs"—they are speaking in "whens." The honest version of the story is startling: we are likely facing a reality where 50% of white-collar tasks could be automated within the next 24 to 60 months.

In Silicon Valley, our "Camelot," the backbone of our economy is the high-earning professional. When the tools of production move from human cognition to silicon intelligence, the "Quality of Life vs. Cost" calculation for families changes instantly. This is the hidden engine behind the migration trends we are seeing in the Mercury News.

2. Real Estate as a "Legacy Lock"

For 40+ years, I’ve watched Northern California real estate be the ultimate "Safe Harbor." But in a world where "Something Big is Happening"—where the richest institutions in history are committing trillions to rearrange how work is done—your home equity cannot remain "frozen."

If the white-collar job market undergoes a 50% shift, the $2M+ residential entry point in Santa Clara County faces a fundamental demand shock.

3. The Strategic Pivot: From Transactional to Tactical

This is why I am consolidating my 50-year track record into McKae Capital Management, Inc. After 22 years as an Independent Principal at McKae Properties, I am moving away from simple transactional brokerage to focus on In-House Principal roles and institutional-grade oversight.

Our Goal: To help you identify the "Disorientation Point" before it arrives. We aren't leaving Real Estate; we are optimizing it as a component of a diversified, liquid, and protected legacy.

The next two to five years will be disorienting for those who aren't prepared. We are choosing to engage now—not with fear, but with a sense of urgency and 41 years of local perspective.

Gary McKae Managing Partner, McKae Capital Management Wharton & CIMA® | Silicon Valley Strategist

Compliance Disclosure: Informational and educational commentary provided here is regarding real estate and macro-economic trends in the Silicon Valley market. Gary McKae is a licensed California Real Estate Broker. This content does not constitute investment advice or the solicitation of securities. McKae Capital Management is a pending entity and not yet a registered investment adviser

The Illusion of Certainty: War, Rates, and the "Divine Guidance" of Market Cycles

The market hates a vacuum, and right now, Washington and the Middle East are providing plenty of them. In 50 years of analyzing these cycles, I’ve learned that when the headlines get this loud, the smart money looks at the "plumbing."

1. The "Fog of War" & Policy Paralysis Yesterday’s Senate vote to block the War Powers Resolution on Iran (47-53) confirms a "Free Rein" era for executive military action. While D.C. debates the "Epic Fury" operations, the DHS is facing a funding lapse, and Secretary Kristi Noem has been shown the door. For investors, this is Systemic Risk. When government stability wobbles, the "Peace Dividend" evaporates, making domestic, esoteric assets (like our Redwood Carbon play) far more attractive than global volatility.

2. The FED’s Hawkish Tilt: Why "Cheap Money" Isn't Coming Back Inflation is stubbornly pegged at 2.9%, and with war-driven energy costs rising, the FED’s "stabilization" talk is shifting back toward a hawkish stance. We aren't looking at a return to "cheap money"; we are looking at a permanent reset of the cost of capital.

Metric	March 2026 Snapshot	Strategic Impact
Fed Funds Rate	3.5% – 3.75%	Higher for longer; debt-heavy deals are being repriced.
Commercial Cap Rates	6.5% – 8.5%	Expansion is here. We are buying at 1990s-style value points.
10-Year Treasury	3.95% - 4.7% (Volatile)	The new "Floor." Risk-free yield is a high bar to clear.

3. Real Estate: The Great Bifurcation We are seeing a tale of two markets. While residential prices are stalling as the "Rate Ceiling" hits, the commercial sector is in a "Reset." Assets are being priced below replacement cost—but only for those who understand how to hedge with "Alpha" drivers like carbon sequestration.

The Bottom Line: Divine Guidance Whether it’s the 41% jump in our recent engagement or the gut feeling that tells you when a cycle has turned, I believe there is Divine Guidance in these shifts. We are being led away from legacy complexity toward a more transparent, "on-chain" financial world. In a hawkish world, yield is earned through asset selection and a bit of faith.

Stay grounded.

Gary McKae Senior Investment Strategist | McKae Capital Management, DRE 01452438, CRD# 328508

Black Swans and Bricks & Motar: Protecting Your Portfolio from Global Volatility

 Subject: Black Swans and Brick & Mortar: Protecting Your Portfolio from Global Volatility

While the world watches the unfolding news in Iran with a mix of shock and uncertainty, the sophisticated investor is asking a much colder, more urgent question: “Where is my capital actually safe?”

The death of Ayatollah Khamenei and the ensuing military escalation aren't just headlines; they are market catalysts. We are seeing an immediate spike in oil, a "flight to safety" in gold, and a sudden re-evaluation of the "risk-free rate" as inflation fears reignite. For those of us in the commercial and residential real estate sectors, this is a Black Swan event that separates the speculators from the strategists. In times of "decapitation strikes" and regional instability, paper assets can vanish in a flurry of high-frequency trading. But physical assets—hard, secured real estate—remain the ultimate hedge.

As I pivot my focus back to my core expertise in Security Investing and Asset Allocation, I am seeing a clear pattern: the "smart money" isn't just looking for yield anymore; it is looking for durability. Whether you are managing a multi-family portfolio or institutional commercial assets, the question is no longer just about your CAP rate—it’s about your portfolio’s resilience to geopolitical shockwaves.

The Strategy of Stability: Why Asset Allocation is Your Only Defense

The events of the last 24 hours in Tehran are a stark reminder that the "old rules" of passive investing are being rewritten. When a regional power enters a leadership vacuum, the ripple effects hit everything from your local gas station to the interest rates on your next commercial refinance.

In my previous work with McKae Properties, the focus was often on the "where" and the "what." But as I return to my core background in Security Investing and Asset Allocation, my focus has shifted to the "How much risk can you actually afford?" Most portfolios are built for "blue sky" days. Mine are built for the storm. Whether you are looking to rebalance a residential portfolio or stress-test a commercial asset against rising geopolitical volatility, you need a strategy that prioritizes capital preservation without sacrificing the upside of a shifting market.

I am currently opening 5 slots this month for a Comprehensive Asset Allocation & Security Audit. We will look at:

• Liquidity Stress Testing: How your assets perform if credit markets tighten due to regional conflict.
• Geopolitical Re-Shoring: Identifying "Safe Haven" US markets likely to see capital inflows.
• Physical & Operational Security: Evaluating the "Hard Asset" value of your properties in an era of heightened domestic and global tension.

To secure one of these consultations, simply reply "STRATEGY" to this newsletter or send me a DM. Let’s ensure your portfolio isn't just growing, but is actually protected.

Gary McKae Senior Investment Strategist

McKae Capital Management

📧 gmkae@sbcglobal.net

🏢 655 Oak Grove Avenue, #1346, Menlo Park, CA 94026

📞 (650) 743-7249

DRE# 01452438 | Securities License: Pending/TBD