Spotlight Interview: Sean Lyons, Founding Partner at Triad Real Estate Partners

350d754Sean is a Founding Partner at Triad Real Estate Partners. He has close to 15 years of experience selling investment real estate, both in Chicago and throughout the country. Before starting Triad, Sean was a Senior Associate at Marcus & Millichap. As a Director of its National Multi Housing Group, he concentrated his efforts on selling Chicago apartment properties and in several tertiary markets throughout The Midwest. He has also serviced his clients by diversifying their real estate investment portfolios and helping facilitate their 1031 Exchanges into other product types, including Single-Tenant and Multi-Tenant Retail, Office, and Industrial Investments. Sean and his two partners at Triad, Shaun Buss and Ryan Tobias, have brokered the sale of more than $850 million of investment property, in over 175 transactions, including 4,000+ apartment and student housing units.


LD: What career path did you want to take when you were in college?

SL: Funny story. I was an English Major in college and had no clear path on what I wanted to do when I graduated. My senior year I was at a football tailgate at Boston College and my good friend’s Dad asked me what I was going to do after school. He owned a large beer distributor in Davenport, IA and he was a great guy who everyone loved. I said I was still debating it and he told point blank that whatever it was, I needed to be in a Sales role in some capacity. I didn’t even know that “Sales” was a career at the time so I started looking into it and I have been selling ever since.


LD: Triad Real Estate Partners has had a strong continual grow in success since its formation. Can you tell us a little bit about your niche and what sets your firm apart from other commercial real estate brokerage companies?

SL: Triad’s niche has always been brokering the sale of multifamily investments, student housing and LIHTC properties in the secondary and tertiary markets throughout The Midwest. Our business model is built around finding higher cap rate, higher yield deals and selling them to out of market buyers who are in search of better returns. We cover about 45 smaller markets and college towns throughout The Midwest and most of them are a day’s drive from Chicago. There are not many brokerage companies with both regional and national reach who target these markets specifically so that gives us a unique advantage over our competition when you look at our track record.


LD: In your earlier career you worked at Computer Associates. Coupling your technology background and your active marketing and sales of multifamily, student housing, and affordable housing assets influences what impacts do you see in how commercial real estate business is conducted today due the evolution of technology?

SL: I say all the time that the commercial real estate industry remains one of the most antiquated big businesses left out there. The way most brokers conduct their day to day business is cold calling owners and using prospecting tactics that have lost their relevance. Given my technology background, one of my key roles at Triad is constantly looking for new and innovative ways to leverage technology in order to maximize efficiencies and expand our brand and reach. I don’t want to give away all of my secrets, but we have found and implemented multiple tools that give us a distinct advantage in the marketplace. To me, this is one of the most interesting and exciting parts about being an entrepreneur who owns your own business. You can constantly try different things until you find something that sticks and there is nobody there to tell you that you can’t do it.


LD: Triad has been very active in the secondary markets throughout the US, but primarily in the Midwest. With the suppression of cap rates have you seen more new investors entering the secondary markets?

SL: No question about it. Everyone, especially coastal buyers, are in search of yield. The Midwest has traditionally been very fundamentally sound and it is not subject to the same peaks and valleys as several of the more volatile markets around the country. Our niche resonates with almost every profile of Buyer on both a regional and national level. The majority of our deals don’t bet on unrealistic rent growth and aggressive pro-forma projections. They are bread and butter assets that almost any investor can get their hands around because the numbers make sense. Everything in this business is relative and we have had a lot of success bringing Buyers from both coasts to these secondary and tertiary markets in The Midwest as they simply do not see those kinds of returns where they are looking to buy locally. The key is building out that network, which we work on growing and expanding every single day.


LD: Multifamily, student housing, and affordable housing have seen some of the better financing options out there when comparing against office, industrial, hotels, etc. What do you see happening with financing for multifamily, student housing, and affordable housing over the next year and how do you think that will impact the market?

SL: Honestly, I have never seen the amount of capital that is currently available in the market chasing these deals. I get 3-5 cold calls a week from different lenders asking if they can lend on our inventory and I have never experienced that prior to starting Triad. Having lived through it before back in 2008 and 2009, there is a part of me that is starting to get nervous that a correction is inevitable once interest rates tick up. That said, I still think there is a decent runway left in our particular asset classes of multifamily, student housing and tax credit deals because the underlying fundamentals remain very strong and should continue that way for the foreseeable future based on everything I read. It is obviously market specific, but that is one of the many reasons why we focus on markets where the supply vs demand dynamics remain relatively in check because you do not see the same levels of new development that you do in the higher profile core urban markets. Given that the majority of our deals trade in the 7-9% CAP range, I believe both lenders and investors will continue to have an appetite for that level of yield, especially if you are not betting on long term rent growth and unrealistic appreciation.


LD: I look at the build outs for student housing and they are a world of difference to my college dorm. Can you tell us a little bit about what you are seeing in student housing and how it has changed over the years?

SL: The answer to this question could be an entirely separate interview. I continue to be amazed by what the “amenities arm race” in the student housing sector produces with these new Class A developments. 24/7 Fitness centers that rival the nicest hotel gyms, pools, movie theaters, lazy rivers, concierge services – you name it. You would think you are in a resort when you walk some of these newer developments and see the quality of construction and the amenity packages. There continues to be a strong demand for this product type, however, as many schools have older, tired product similar to what you may have lived in when you were in college. They are capturing a certain segment of the market that is willing to pay up for the nicest assets available and since they didn’t exist until recently, there is pent up demand. You see it even more at the larger schools that have a diverse student body, including 20%+ international students, who are happy to pay top dollar to have access to all of the amenities. It is truly a sea change in how students live and I think the trend will continue to move in that direction provided the demand remains as strong as it has been.


LD: Not only has the design and quality of student housing evolved, but it appears to be a major commercial real estate investment product type these days. Over recent years have you seen new student housing investors coming over from other property sectors? What do you believe the draw has been over recent years to entice new investors into this space?

SL: We really started getting active in the student housing space around 2010, right after we started Triad. We found that several of the owners in these smaller towns owned both apartments and student housing but that they were two distinct asset classes in term of how they are operated and managed. Our timing was ideal as the student housing sector was really starting to move away from being a more localized asset class and becoming more of an institutional level investment. National players began raising large funds and looking for deals all over the country as opposed to their closest college markets. I believe this trend began as a result of the crash in 2008-9 when almost every asset class took a big hit. A direct result of that correction was that savvy investors started looking for deals that they considered to be more “recession proof” and were not as exposed to the larger macro trends of the economy. Student housing was a great fit for this investment profile because many of the smaller college towns remain somewhat insulated from these issues. Every year, a new renter pool shows up on campus and they will remain there for the next four years. Provided the overall health of the school remains intact (which is not true for every school these days) and the enrollment growth is moving in the right direction, student housing remains a great niche asset class that has less exposure than most. This has resulted in all kinds of new investors from different asset classes entering the space for the first time.


LD: Everyone has a few transactions that stand out in the careers.  What is one deal thus far in your career that stands out to you and what is the significance to that deal?

SL: Not to dodge the question, but there has not been one specific transaction that stands out as the most significant. I will say that the first few we did to break into the student housing space were meaningful because that opened up the floodgates to a whole new asset class that has been very good to us over the past five years. To that end, we do have an $85M student housing portfolio we are marketing right now that will be memorable if we are able to get it done.


LD: What advice have you received that has been instrumental in your success?

SL: My favorite kind of advice is from fellow entrepreneurs who have taken similar risks in starting their own company and everything that goes into making it a success. I admire and respect those who don’t rely on the safe and easy route and who are willing to take a few steps backwards initially in order to take several forward. I do a good amount of networking, both personally and professionally, and I always find myself most drawn to the wisdom of those who have failed many times prior to succeeding. A certain tenacity is required to be an entrepreneur and I am naturally attracted to those who are willing to accept the risks in exchange for all of the rewards that come along with owning your own business. If you have put everything on the line in order to try and create something successful, I want to hear about the good and the bad that you have learned about along the way. The three partners at Triad – Shaun, Ryan and myself – talk about this all of the time as it is a constant work in progress.


LD: What advice would you give a young Sean Lyons right out of college?

SL: Whatever it is that you do, put yourself in a position where you are in complete control of your own outcomes and make sure there are no layers standing in between where you are now and where you ultimately want to be. I have learned to subscribe to a very simple philosophy that I apply to both my personal and professional life: Only concern yourself with the outcomes that you can influence or control in some way. This is true for my family and for my business. All the rest of the noise that is outside that scope is a distraction and it goes in a separate bucket that I can give some attention to later if I want. Following this simple philosophy has helped me remain focused on the things that are important while not spending a lot of time or wasted effort on the bullshit. It would have been helpful to have adopted this thought process earlier in my career, but then again, that is all part of the journey…


For more information on Sean Lyons or Triad Real Estate Partners please visit Triad Real Estate Partners’ website:

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