The most important variable

In a recent email to investors in Adaptive Realty Fund 4, I wrote:

“In our business, there are three types of variables (of varying degrees of magnitude):
  1. Things we can’t control…
  2. Things we can control…
  3. Things over which we have some, but not total, control…”

Spent the rest of the letter discussing the most important “type 3” variable.

Today, I want to talk about the most important “type 2” variable: price.


Repositioning buildings is inherently complicated. Lots of things can go wrong and some of them are totally beyond your control (see above).

But you can control the price you pay for a building.

Pay too much, and pretty much everything has to go right.

Give yourself a nice margin of safety, and you can survive some bad breaks and/or bad execution.

The trick is to be willing to keep your bat on your shoulder, watching pitch after pitch go by, until you find one you can really drive.