Real Estate Investing Strategies & Best Practices

What are your thoughts on investing passively in the office space? If you thought like me, that offices were falling out of favor due to COVID? We are mistaken, offices in the right demographic and area are thriving and ripe for the picking. Brian Adams is going to let us know the details on why Excelsior Capital is investing in offices.

He has 10 years of experience in Real Estate private equity and has advanced knowledge in best practices for strategic real estate investing.

Prior to forming Excelsior Capital, Brian co-founded Priam Properties (an institutional Real Estate Private Equity Sponsor) in 2010 and provided leadership and direction for the firm in connection with capital markets, investment management, and investor relations.

Brian served as a member of the Board of NextGen Advisory Faculty for the Institute of Private Investors/Campden; a program designed to support next-generation family members in preparing the following generation for the responsibility of being a steward of family wealth.

In this episode, we’re discussing…

·       [2:30] How he started the company probably with some mistakes

·       [3:50] Then they started offering up co-investment opportunities to their fund investors and how they expanded significantly

·       [5:58] They focused on suburban office products in secondary markets. The good-enough investor’s relationship they have.

·       [9:58] The importance to have a strong infrastructure around the business

·       [14:53] How automation makes the difference, quality reporting to investors and communication

·        [19:41] Why now offices space still being popular during COVID and employee behavior

·       [26:54] They only work with accredited investors and how it works, focused on taxes advantages

·       [29:59] How the family office works and what’s the proper deck to get in front of an office, what is the process like? When to invest with your family office

·       [32:22] The importance of empathy and understand exactly what means to have a family office and how he helps people

·       [37:12] How meaningful relationships take time and energy to both succeed

Brian’s Top Tip’s

·       “And where we see opportunity today is elsewhere. And so, from that perspective, I think a fund is suboptimal when you want to move quickly”

·       “We started offering up direct co-investment opportunities to our fund investors as sidecars. And that's really when we expanded pretty significantly because they started to bring in their friends and family on purely a deal-by-deal basis”

·       “We are not out there hunting big IRR. We are not 2, 3 years holders who knew the kind of buyers that when they buy something, they hate it the next day, we are long term yield focused investors and we're chugging along at double-digit cash and cash yield, you don't necessarily want to have a fund of those product types because of the product is performing”

·       “The biggest mistake I made was, early in my career I was a deal guy. Let's go do deals, let's go raise some capital, let's go find some opportunities. And the deals were good. But my infrastructure around my small business was awful. Marketing, reporting, Investor Relations, HR, tax audit, legal”

·       “And I spent about a year, two years of my life, getting my teeth kicked in by these investors. Because even though the deals were doing well, they didn't know about it, because I had no reporting mechanism. And I had no way to market everything that we were doing”

 ·       “If you don't have institutional quality reporting and Investor Relations, because it's inexcusable. And it does take a lot of money, it does take a lot of time. But when you're dealing in the syndication business, I have over 500 investors, it really does cut down to the amount of time that it takes to get on the phone and explain to them what's happening with this individual asset”

·       “I have an in-house comptroller who's a CPA with a public accounting tax background, and you'll pay up for that personnel. But it will make your life a lot easier. And it will make your company perform so much better on an execution level”

·       “Do I think it's sustainable to have the massive concentration of employees work from home? No, I think that spike of productivity that we saw in q2 was because of novelty, and people worried they were going to get fired. But as the months have gone on, we've seen burnout, depression, lack of productivity, lack of creativity”

·       “And the office will become a place where collaboration occurs, right, big multipurpose offices, big conference rooms, where you can do that kind of groupthink, or have very quiet time, if you don't have your own individual office in your home, if you're a younger person and have an apartment, working your kitchen, etc.”

·       “I think another big miss application of the term or misunderstanding of the term is that a family office is not represented by the number of zeros in the bank account. It's represented by a mindset”

·       “And they generally fail if they try to extend over multiple generations. So, I think the biggest thing for you if you are interested in networking in the family office space, is to understand what their problems are”

Mike’s Top Tip’s

·   “One of the biggest things that you hit on is when you are a sponsor, and you're the general partner, it is so important that to protect yourself. Is your number one goal, you want to make money, you want to have funds, but you want to protect yourself. And the easiest way is to say you know what, I refuse to do my own books”

 
Resources from Brian

LinkedIn | Excelsior Capital LinkedIn | Twitter | Excelsior Capital Website

ABOUT BRIAN ADAMS

He has served on the Board of Sirrom Partners, LP, a single-family office investing across private and public asset classes since May of 2008. Since May of 2017 he has served on the Investment Committee for Solidus LP, an early-stage venture capital firm focused on investment opportunities in Healthcare and Technology. From January of 2016 to January of 2018, Brian served as a member of the Board of Next Gen Advisory Faculty for the Institute of Private Investors / Campden, a program designed to support next generation family members in preparing the following generation for the responsibility of being a steward of family wealth. He has also served on the Advisory Committee for the Southeastern Family Office Forum since December of 2016. Brian is a former practicing attorney, earning his J.D. from Suffolk University and his B.A. from Wesleyan University with Honors.