Indoor or Outdoor Dining? With These Hybrid Spaces, You Don’t Have to Choose
Homeowners are ditching elaborate dining rooms and separate outside setups for a more blended eating environment
4 min
Copyright 2020, Dow Jones & Company, Inc. All Rights Reserved Worldwide. LEARN MORE
When building his Sonoma, Calif., home, Mukesh Patel had a request: He wanted a simple way to enjoy farm-to-table meals. He meant it literally.
Mr. Patel had purchased a 100-acre lot with his wife, Harsha Patel, 59, for $5.7 million in 2016 that included a small fruit and vegetable farm. He then worked with architect Christie Tyreus to construct a 2,100-square-foot, two-bedroom home for $3 million.
The home features a glass-enclosed kitchen-dining room with exterior pocket doors that open up on two sides to make it easy to walk from the terrace to pick fresh food: tomatoes, avocados, lettuce. The other side of the dining area leads to the living room. “You pick, you cook, then you eat—it’s a smooth transition,” says Mr. Patel, 64, a technology executive. The two moved into the new house from Pleasanton in 2020 but kept their Pleasanton house as a secondary home.
Homeowners are rethinking their indoor dining setups, replacing formal, enclosed rooms with elaborate spaces that give the feel of dining al fresco, with the option to be protected from the elements.
The interior designs also offer greater access to the kitchen, by direct proximity or by combining the cooking and dining areas in an open plan. At the same time, architects are being asked to make the most of killer views, installing automated glass doors and screens to create a seamless transition with the exterior.
“This is as close to dining outside you can get without being outside,” says Paul Masi, principal of Bates Masi + Architects, an East Hampton, N.Y., architecture firm.
Recently, a dining area Mr. Masi designed included two dining-room tables next to each other, with one indoors and the other outdoors. When the homeowners entertain in good weather, they can open the pocket doors to double the room space. Insect screens make it comfortable to eat even at dusk. Wide-plank Ipe wood floors outside mimic the wood floors indoors, and an oak wood ceiling stretches between the indoor and outdoor spaces to create a uniform look.
Another project includes a dining area that opens directly to the outside via two sides of glass doors, with pocket doors separating the space from the kitchen.
“There is nothing abrupt that changes from the interior to the exterior,” says Mr. Masi. Creating these hybrid dining spaces means there are fewer requests for separate outdoor kitchen and eating areas, especially in colder climates, he adds.
After purchasing a Manhattan Beach, Calif., home for $8.5 million in 2019, Michael Mothner, 41, wanted a dining room the family was “actually going to use.”
During a 2½-year renovation, Mr. Mothner created a formal dining space that borders an upstairs living room and kitchen, and opens up to a private terrace with a view over the family pool and the ocean. The indoor-outdoor setup makes it easier to host family dinners that are casual but not like a picnic. “We wanted something that doesn’t feel super formal and is going to be functional,” says the digital-marketing agency founder.
Wendy Word, an interior designer who worked with Mr. Mothner and his wife, Savanna Mothner, says she was able to extend meals from the dining room to the outside by making the table and the rug easy to position partially outdoors. Another dining table is outside on a covered terrace. “They want to be able to gather spontaneously and be able to use the outdoor footprint,” Ms. Word says.
With open floor plans, setting off the dining room while making it conveniently close to the kitchen is a challenge, says Ms. Tyreus, who worked with Mr. Patel.
Instead of creating a separate space, Ms. Tyreus added three kitchen islands. The island bordering the dining area has a decorative sintered stone facade, making the dining space more like a sleek bar area. Kitchen islands farther away include hidden refrigerator drawers and underneath storage. “When in the dining room, [the counter] looks like this beautiful stone block,” she says.
Los Angeles real-estate agent Rayni Williams says luxury homeowners pay a premium for dining rooms that blend into separate spaces. She sees dining areas that are separated by a wall of art, or another dividing element, from the main living area, providing easy access to the exterior and to the kitchen.
The idea is to create an eating area that gives priority to exterior views. “They know that’s the real money shot—that’s the way to maximise the dollar,” she adds.
Ms. Williams and her husband, Branden, are representing off market a $48 million home in Los Angeles that has nearly 7,000-square feet of outdoor space and a dining area with a large glass wall that can retract vertically to open to the exterior. The dining table inside the home is on wheels to make it easy to relocate throughout the area, including to a spot near an outdoor fireplace, she says.
Even in colder climates, homeowners are finding creative ways to craft scenic indoor-outdoor dining spots. After buying a vacation home for $765,000 in Hyde Park, N.Y., in 2021, Thorsten Hayer, 42, was thrilled to use what he calls a fancy garage as a dining area that opens to the exterior through two sets of barn doors. With a dining table and bar, the exterior room allows him to entertain while enjoying the outdoors.
The main home, built in 1876, has a formal dining area, but the family eats dinners mainly in the outside space. When the doors are open, it feels like they are dining in the garden. “It’s a nice progression from grilling a hot dog on the fire pit and going into a garage space,” he adds.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Equities are often seen as expensive after promising start to 2023
7 min
A new trading year kicked off just weeks ago. Already it bears little resemblance to the carnage of 2022.
After languishing throughout last year, growth stocks have zoomed higher. Tesla Inc. and Nvidia Corp., for example, have jumped more than 30%. The outlook for bonds is brightening after a historic rout. Even bitcoin has rallied, despite ongoing effects from the collapse of the crypto exchange FTX.
The rebound has been driven by renewed optimism about the global economic outlook. Investors have embraced signs that inflation has peaked in the U.S. and abroad. Many are hoping that next week the Federal Reserve will slow its pace of interest-rate increases yet again. China’s lifting of Covid-19 restrictions pleasantly surprised many traders who have welcomed the move as a sign that more growth is ahead.
Still, risks loom large. Many investors aren’t convinced that the rebound is sustainable. Some are worried about stretched stock valuations, or whether corporate earnings will face more pain down the road. Others are fretting that markets aren’t fully pricing in the possibility of a recession, or what might happen if the Fed continues to fight inflation longer than currently anticipated.
We asked five investors to share how they are positioning for that uncertainty and where they think markets could be headed next. Here is what they said:
‘Animal spirits’ could return
Cliff Asness, founder of AQR Capital Management, acknowledges that he wasn’t expecting the run in speculative stocks and digital currencies that has swept markets to kick off 2023.
Bitcoin prices have jumped around 40%. Some of the stocks that are the most heavily bet against on Wall Street are sitting on double-digit gains. Carvana Co. has soared nearly 64%, while MicroStrategy Inc. has surged more than 80%. Cathie Wood‘s ARK Innovation ETF has gained about 29%.
If the past few years have taught Mr. Asness anything, it is to be prepared for such run-ups to last much longer than expected. His lesson from the euphoria regarding risky trades in 2020 and 2021? Don’t count out the chance that the frenzy will return again, he said.
“It could be that there are still these crazy animal spirits out there,” Mr. Asness said.
Still, he said that hasn’t changed his conviction that cheaper stocks in the market, known as value stocks, are bound to keep soaring past their peers. There might be short spurts of outperformance for more-expensive slices of the market, as seen in January. But over the long term, he is sticking to his bet that value stocks will beat growth stocks. He is expecting a volatile, but profitable, stretch for the trade.
“I love the value trade,” Mr. Asness said. “We sing about it to our clients.”
—Gunjan Banerji
Keeping dollar’s moves in focus
For Richard Benson, co-chief investment officer of Millennium Global Investments Ltd., no single trade was more important last year than the blistering rise of the U.S. dollar.
Once a relatively placid area of markets following the 2008 financial crisis, currencies have found renewed focus from Wall Street and Main Street. Last year the dollar’s unrelenting rise dented multinational companies’ profits, exacerbated inflation for countries that import American goods and repeatedly surprised some traders who believed the greenback couldn’t keep rallying so fast.
The factors that spurred the dollar’s rise are now contributing to its fall. Ebbing inflation and expectations of slower interest-rate increases from the Fed have sent the dollar down 1.7% this year, as measured by the WSJ Dollar Index.
Mr. Benson is betting more pain for the dollar is ahead and sees the greenback weakening between 3% and 5% over the next three to six months.
“When the biggest central bank in the world is on the move, look at everything through their lens and don’t get distracted,” said Mr. Benson of the London-based currency fund manager, regarding the Fed.
This year Mr. Benson expects the dollar’s fall to ripple similarly far and wide across global economies and markets.
“I don’t see many people complaining about a weaker dollar” over the next few months, he said. “If the dollar is falling, that economic setup should also mean that tech stocks should do quite well.”
Mr. Benson said he expects the dollar’s fall to brighten the outlook for some emerging- market assets, and he is betting on China’s offshore yuan as the country’s economy reopens. He sees the euro strengthening versus the dollar if the eurozone’s economy continues to fare better than expected.
—Caitlin McCabe
Stocks still appear overvalued
Even after the S&P 500 fell 15% from its record high reached in January 2022, U.S. stocks still look expensive, said Rupal Bhansali, chief investment officer of Ariel Investments, who oversees $6.7 billion in assets.
Of course, the market doesn’t appear as frothy as it did for much of 2020 and 2021, but she said she expects a steeper correction in prices ahead.
The broad stock-market gauge recently traded at 17.9 times its projected earnings over the next 12 months, according to FactSet. That is below the high of around 24 hit in late 2020, but above the historical average over the past 20 years of 15.7, FactSet data show.
“The old habit was buy the dip,” Ms. Bhansali said. “The new habit should be sell the rip.”
One reason Ms. Bhansali said the selloff might not be over yet? The market is still underestimating the Fed.
Investors repeatedly mispriced how fast the Fed would move in 2022, wrongly expecting the central bank to ease up on its rate increases. They were caught off guard by Fed Chair Jerome Powell‘s aggressive messages on interest rates. It stoked steep selloffs in the stock market, leading to the most turbulent year since the 2008 financial crisis. Now investors are making the same mistake again, Ms. Bhansali said.
Current stock valuations don’t reflect the big shift coming in central-bank policy, which she thinks will have to be more aggressive than many expect. Though broader measures of inflation have been falling, some slices, such as services inflation, have proved stickier. Ms. Bhansali is positioning for such areas as healthcare, which she thinks would be more insulated from a recession than the rest of the market, to outperform.
“The Fed is determined to win the war since they lost the battle,” Ms. Bhansali said.
—Gunjan Banerji
A better year for bonds seen
Gone are the days when tumbling bond yields left investors with few alternatives to stocks. Finally, bonds are back, according to Niall O’Sullivan of Neuberger Berman, an investment manager overseeing about $427 billion in client assets at the end of 2022.
After a turbulent year for the fixed-income market in 2022, bonds have kicked off the new year on a more promising note. The Bloomberg U.S. Aggregate Bond Index—composed largely of U.S. Treasurys, highly rated corporate bonds and mortgage-backed securities—climbed 3% so far this year on a total return basis through Thursday’s close. That is the index’s best start to a year since it began in 1989, according to Dow Jones Market Data.
Mr. O’Sullivan, the chief investment officer of multi asset strategies for Europe, the Middle East and Africa at Neuberger Berman, said the single biggest conversation he is currently having with clients is how to increase fixed-income exposure.
“Strategically, the facts have changed. When you look at fixed income as an asset class…they’re now all providing yield, and possibly even more importantly, actual cash coupons of a meaningful size,” he said. “That is a very different world to the one we’ve been in for quite a long time.”
Mr. O’Sullivan said it is important to reconsider how much of an advantage stocks now hold over bonds, given what he believes are looming risks for the stock market. He predicts that inflation will be harder to wrangle than investors currently anticipate and that the Fed will hold its peak interest rate steady for longer than is currently expected. Even more worrying, he said, it will be harder for companies to continue passing on price increases to consumers, which means earnings could see bigger hits in the future.
“That is why we are wary on the equity side,” he said.
Among the products that Mr. O’Sullivan said he favours in the fixed-income space are higher-quality and shorter-term bonds. Still, he added, it is important for investors to find portfolio diversity outside bonds this year. For that, he said he views commodities as attractive, specifically metals such as copper, which could continue to benefit from China’s reopening.
—Caitlin McCabe
Find the fear, and find the value
Ramona Persaud, a portfolio manager at Fidelity Investments, said she can still identify bargains in a pricey market by looking in less-sanguine places. Find the fear, and find the value, she said.
“When fear really rises, you can buy some very well-run businesses,” she said.
Take Taiwan’s semiconductor companies. Concern over global trade and tensions with China have weighed on the shares of chip makers based on the island. But those fears have led many investors to overlook the competitive advantages those companies hold over rivals, she said.
“That is a good setup,” said Ms. Persaud, who considers herself a conservative value investor and manages more than $20 billion across several U.S. and Canadian funds.
The S&P 500 is trading above fair value, she said, which means “there just isn’t widespread opportunity,” and investors might be underestimating some of the risks that lie in waiting.
“That tells me the market is optimistic,” said Ms. Persaud. “That would be OK if the risks were not exogenous.”
Those challenges, whether rising interest rates and Fed policy or Russia’s war in Ukraine and concern over energy-security concerns in Europe, are complicated, and in many cases, interrelated.
It isn’t all bad news, she said. China ended its zero-Covid restrictions. A milder winter in Europe has blunted the effects of the war in Ukraine on energy prices and helped the continent sidestep recession, and inflation is slowing.
“These are reasons the market is so happy,” she said.
—Justin Baer
Sydney’s prestige market is looking up, here’s three of the best on the market right now.
The coastal area southeast of Melbourne is providing a permanent escape as the pandemic endures.
