Spotlight Interview: Robb Bollhoffer: Managing Principal, 29th Street Capital

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Robb Bollhoffer, along with his acquisition team have grown 29th Street Capital’s apartment portfolio to over 7,000 units in only a few years. Robb’s career in commercial real estate began as a Senior Acquisitions Analyst at Trizec Properties, then Managing Director at Strategic Capital Partners, and now Managing Director at 29th Street Capital. Robb and his team at 29th Street Capital focus on acquiring add-value multifamily assets in 10 high growth markets across the U.S. In addition to Robb’s impressive resume and his many successes he is an all around great guy on a personal and professional level. Search Apartments for Sale on Leavitt Digital.

Continue reading Spotlight Interview: Robb Bollhoffer: Managing Principal, 29th Street Capital

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

 

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Sean 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 apartment properties on the north side of Chicago 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, 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: http://www.triadrepartners.com

For more information on Leavitt Digital please visit www.ldcre.com

Leavitt Digital Breaks into Institutional Real Estate with Priced to Market Student Housing Portfolio Estimated to Sell for as Much as $85MM

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Leavitt Digital is excited to add Triad Real Estate Partners’ newest listing to Leavitt Digital’s Free Commercial Listing Platform. Triad Real Estate Partners recently listed a 42 property Student Housing Portfolio with assets at Northern Illinois University, Western Illinois University, and Southern Illinois University. The 98.76% occupied Star Properties Portfolio contains 980 Units, and has the upside of rent increases.

Sean Lyons of Triad Real Estate Partners spoke with Leavitt Digital in detail about this offering; both Triad Real Estate Partners and the portfolio owner feel this offering should be listed as “Priced to Market”. This portfolio offering is a very unique opportunity and Triad is already seeing serious demand from student housing investors all over the country. Both Triad Real Estate Partners and the portfolio owner are confident the market will dictate the price on this portfolio and it will ultimately fetch a sales price as much as $85 Million.

This portfolio is Student Housing and the location is in the Secondary Markets; both of which have seen a growing surge of investment dollars. Even with the growing levels of interest and capital flowing into Student Housing and Secondary Markets investors are still able to find above average returns within this product type and these markets when compared to Institutional Office, Industrial, Retail, and Apartments in the Primary Markets.

“Leavitt Digital is excited Triad Real Estate Partners sees the value in   adding its Institutional Student Housing portfolio to Leavitt Digital’s Free Commercial Listing Platform. Without an official price tag (estimated $85+ Million) on this portfolio it is the highest priced offering listed on Leavitt Digital to date. We are reaching milestones every day, just recently Leavitt Digital surpassed $1 Billion in listings on its Free Commercial Real Estate Listing Platform. Triad Real Estate Partners listing this portfolio on Leavitt Digital further validates Leavitt Digital’s becoming a commodity in the commercial real estate market,” said Brendan Hotchkiss, CEO of Leavitt Digital.

For more information on this portfolio please visit the portfolio listing on Leavitt Digital. For more information on Sean Lyons and Triad Real Estate Partners please visit Triad Real Estate Partners’ website.

Spotlight Interview: Lee Kiser: Principal/Managing Broker, Kiser Group / Principal KIG / Principal, KIG Analytics

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Lee Kiser co-founded Kiser Group with his partner Estella Kiser, in 2005, and has developed the company into the most recognized brand in Chicagoland for mid-market multi-family commercial real estate brokerage. Kiser Group currently has 23 staff members.

 

LD: Congratulations on Kiser Group’s 10-year anniversary! Your team has a very impressive track record for selling apartments throughout the Greater Chicagoland area.  Can you tell us a little bit about how Kiser Group distinguishes itself from other commercial real estate brokerage firms?

LK: Kiser Group brokers are the most highly educated, best-trained agents in the market. Our brokers’ ability to lead their clients to solid investments is unrivaled. Another differentiator is that Kiser Group provides its agents with everything they need to help their clients, including the latest technology, research, and marketing tools. No other firm in Chicagoland knows multi-family investment like Kiser Group.

 

LD: Everything we have read lately indicates all signs for apartment investments remain strong: 1. Financing remains active, 2. Occupancies remain strong, 3. Rents are increasing.  However, there is strong market opinion that a rate hike is right around the corner.  In your opinion what will the next 1-2 years look like for Apartment Investment Sales on a National basis?

LK: Everyone seems to agree a rate hike is inevitable. The first moves will be nominal – 25 basis points per – and the Fed will monitor how the economy adjusts. I anticipate that we could be as much as 200 basis points higher by the end of 2017. If so, cap rates will also adjust. At the same time, I do not anticipate rent grow slowing; meaning NOI’s should continue to grow through the end of 2017. The effect of the simultaneous trends of cap rate increase and rent growth will be a leveling of values in multi-family over the next few years but I do not anticipate a decline in value (price per unit/foot)

 

LD: Throughout your tenure in selling apartment buildings in Chicago, has Chicago seen an increase in outside capital (non-Chicago based companies) investing into its real estate; driving valuations higher and cap rates lower?  Where is this capital coming from geographically?

LK: Chicago has become a world-class city in the past 10 years and with that has come world-class investment. We are currently closing Chicagoland apartments with investors from both US coasts, Canada, China, Japan, Israel, and several Western European countries. The profile buyer having a greater impact on cap rate compression, though, is the fund-driven investor, not the foreign investor. Chicago has seen institutional and pseudo-institutional investors moving into traditionally non-institutional assets. This means increased competition for the traditional mid-market private landlords. The return requirements for the fund-driven investors are substantially lower than the private market. This has been the biggest factor in cap rate compression in Chicago.

 

LD: Do you believe the increase in outside real estate investment dollars into Chicago is an indicator that real estate in Chicago is under priced when compared with other leading US Cities?  Has the City of Chicago has elevated itself over the years?

LK: Chicago has definitely elevated itself over the years but local cap rates are still significantly higher than other major US markets where foreign or fund-driven investors have traditionally purchased (NYC, San Francisco, LA, Miami). Chicago multi-family real estate is the best investment relative to the same asset class in any other major US market.

 

LD: Have tenants become more demanding on the level and quality of the amenities they expect from their landlords?

LK: Amenities are certainly more of a competing chip for landlords than previously but not necessarily due to tenant demand – due to beating the building next door. Chicagoland’s new construction pipeline boasts buildings with world-class amenities such as pet grooming areas and salons, outdoor grill areas that mimic high-end restaurants, demonstration kitchens, smart technology for laundry and parcel service, and many more.

 

LD: Can you tell us a little bit about what types of debt you are seeing on the acquisition side (CMBS, Agency, Fannie, Freddie, etc.)?  What types of leverages are typical on of these lenders on the deals your team is closing?

LK: The only thing I think is unusual is the return of the CMBS market. I’m seeing loans completed at LTV’s, price points, and on appraisals that make me think no one really learned anything in 2008-10.

 

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

LK: Each year brings transactions memorable for different reasons. The ones I remember most are the ones I’ve sold more, than once. I really enjoy watching the same asset in the hands of different clients over time. Each client adds value in a different and unique way. Kiser Group’s record so far is selling the same asset four (4) times, with several in the “3-times” category. Nothing to me speaks more loudly than repeat clients and repeat assets. This means that we’re helping clients create wealth over time and continually being called to assist in that process. I anticipate Kiser Group has the longevity to be transacting the same asset a dozen times. Right now I’m seeking the 5-peat.

 

LD: What advice would you give a young Lee Kiser just out of college and starting his professional career?

LK: Move to a big city (Chicago) earlier than you did, align yourself with an industry mentor as quickly as you can, learn everything you possibly can about your chosen field. Immerse yourself as quickly as possible in your chosen field, then as quickly as possible think about how you can make things better for your clients. Once you have the knowledge, you will create new ways of working within the field. If you do this at an early enough age, you’ll be in a position to change things in your profession.

 

For more information on Lee Kiser and Kiser Group,

please visit ‪www.kisergroup.com

 

In 2014-15, Lee co-founded KIG and KIG Analytics with his Partner Susan Tjarksen. KIG is an institutional multi-family broker based in Chicago. Licensed in 9 Midwest states, KIG currently has listings in Illinois, Wisconsin, Indiana, and Kentucky. KIG has 10 staff members. KIG Analytics is a data analysis and visualization company that is a wholly owned subsidiary of KIG. ‪For more information on KIG and KIG Analytics, visit www.kigcre.com.

 

For more information on Leavitt Digital please visit www.ldcre.com.

 

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