$100m equity and no mandate - what to do?

I'll be joining a unique owner/operator as the director of acquisitions. The company has a long track record and a ~$2 billion portfolio of multifamily, retail and single tenant industrial that's sub 50% leveraged.  Additionally, they have ~$100m of discretionary equity that has historically been deployed to acquire direct assets, but there is now a greater willingness to pursue other strategies.  There is no mandate - if I could convince them to buy real estate in the Metaverse, we technically could do so. What's more, our hold period is indefinite. 

Curious to get the collective groups take on interesting avenues to deploy equity? 

  • Preferred Equity for value-add / ground up multifamily 
  • Non-performing note purchases (retail) 
  • 80/20 JV equity w/ minimum 10-year hold period (secondary / tertiary markets) 
  • Covered land plays (w/ intention to seek co-development partner) 
  • Portfolio recapitalization for legacy RE owners (think your local power center baron, or similar)

Thoughts? 

 

I’d start by figuring out what risk adjusted return the firm wants. It sounds like they’re more on the risk adverse side.

 

Yeah guys, this was a joke. Do you not think it’s funny that there’s a real life situation that exactly mirrors one of the most common intern / analyst interview questions?

 

Congrats on the role.

Like the pref equity strategy

Given the broad mandate and relatively low required return, retail NPL seems like too much work for the payoff

Would change your third to long term holds of good assets where cap rate expansion won't have as much of an impact. Think spread investing with locking in some debt

Covered land play - same as NPL, is it worth the trouble?

manufactured housing

 

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