How to Think About Opportunity in Today’s Market
We recently touched on an important shift we’re beginning to see in the market: distress is emerging, and with it, opportunity. That said, timing matters. Trying to catch falling knives rarely ends well. While distress is building, it’s still early in the cycle. In markets like this, patient capital tends to win. What is changing […]
Lesson #6: Your Team Matters
There’s an old African proverb: If you want to go fast, go alone. If you want to go far, go together. You don’t truly understand a team until its stress tested. Adversity either bonds or breaks you. When the stakes are high, your team is everything. That’s why the people you choose to invest with, […]
Concentrate to Build Wealth, Diversify to Protect It
Lesson #5: Diversify For a long time, I relied heavily on a single strategy I believed in and went all in. It worked. Until it didn’t. It’s impossible to predict the future. No matter how strong the thesis, no matter how compelling the data, no matter how good the track record looks. Markets don’t reward conviction […]
Lesson #4: Everything Works… Until It Doesn’t
Long track records create confidence. Sometimes too much of it. Markets don’t care how long something has worked. They don’t care about your experience, your reputation, or your past success. There are moments when what worked yesterday simply stops working tomorrow. There was a time when payphones were everywhere. Long-distance calling cards were a real […]
Opportunity from Crisis
Thank you for the feedback on the recent updates. My last few notes have focused on the challenges we’ve navigated across the market and within the GVA portfolio, along with key lessons learned coming out of this cycle. For those interested, I’m continuing the lessons learned discussion on LinkedIn. Today, I want to shift the focus […]
The Truth About High Returns: Risk Never Disappears — It Just Hides
Lesson #3: Big Returns Carry Inherent Risk We had a 12-year track record with an average IRR of 42% through 2023. Strong numbers, but even the best track records don’t make you immune to risk. When conditions changed, the downside showed up fast. Big returns always carry inherent risk, and history is no guide to […]
The Perfect Storm in Multifamily: Fed Hikes, Falling Rents, and 50,000 New Units in Austin
Market cycles are inevitable in real estate, but the convergence of factors since 2022 has been unprecedented: aggressive Fed rate hikes, 40% valuation drops in some markets, and historic supply surges all hitting simultaneously. Austin alone had 50,000 units in the pipeline, driving rents and occupancy down just as borrowing costs spiked. The timing created […]
Lesson #2: Floating-Rate Debt and High LTVs Run Out of Options Fast
In a near zero interest rate environment, floating-rate debt and higher leverage can feel like a good choice. When debt is virtually free and you’re focused on maximizing returns, leverage is the way to do it. But the risk is always there, even when it doesn’t feel like it. When rates rise quickly, debt service […]
Don’t Fight the Fed
Lesson #1: Don’t Fight the Fed One of the most important investing lessons I’ve learned came in the spring of 2022. We had just closed our first deal with a new institutional equity partner, the first of what was supposed to be multiple deals. Shortly after, the Fed began one of the fastest and most […]
In the Arena: Real Estate Investing Lessons Learned Through the Ups and Downs of the Market Cycle
It’s been quite a cycle, and I’ve had a front-row seat to both the upswing and the downswing. Now that things have settled a bit, I wanted to share a series of lessons learned from this period. This season required a lot of hard decisions. Looking back, I’ve had time to reflect on what worked, […]