The question was posed to me recently by a firm I was casually discussing a job opportunity with. They are opportunistic in their strategy.
My initial thoughts would be development and/or redevelopment of existing assets (higher and better use, change of use, etc). Or, simply buying assets that are potentially out of favor (retail, office, lodging) at a particular time, i.e. basis play and if/when market reverts back to norm (or higher), sell.
These seem pretty basic, but curious if anyone else has a good thesis on how you would at least pitch this.
Can definitely be taken a variety of ways. For example, it is pretty industry standard to say "opportunistic" and mean development. However, I usually take it at face value and mean that any good deal is a deal I'm interested in. That could be an unusually high cap rate on a deal in self storage in a prime location or a cheap land basis in Miami for apartment complexes. I would just say that it is a strategy agnostic term and that all possibilities are open rather than pigeonholing yourself into just one subset like "core+ student housing in the Southeast".
I would agree with this - generally a question like this is just wondering how you view opportunistic investing. True opportunistic investing is being open to any deal that is a good deal.
That being said, given the "in the current climate" part of the question I'd think they were asking about where you see opportunity right now rather than the broader definition of opportunistic investing. In that case, right now there are a ton of smaller operators looking for capital because lenders have tightened up. Whether its equity for an acquisition/development, an inability to make debt payments, or struggling to refi, there are going to be plenty of opportunities coming up linked to the current interest rate environment. Some examples for a well capitalized firm would be offering bridge financing/preferred equity with a conversion option/equity kicker, buying distressed debt or taking over distressed properties, leveraging an operators need for capital to negotiate fee/promote sharing either as a co-GP or an LP with additional incentive, etc.
Facilis vel reiciendis magnam perferendis nihil aperiam odio facere. Distinctio necessitatibus illo incidunt sequi eius est quod optio.
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