Was at a panel discussion on development recently and rising construction costs came up. Everyone wants to know why it costs like 30% more to build a building than it did two years ago. There are lots of theories, including: All the sub-contractors retired in 2008 Lots of laborers went back to their home countries … Continue reading “Why construction costs are so high”
Blog
SROs: A new, old idea
I read a TON about business, in general, and real estate, in particular. So it’s fairly rare for me to come across an idea that’s genuinely new to me. But I came across one last night, during a conversation with a much more experienced owner-operator, that I’d like to share. We were discussing the housing … Continue reading “SROs: A new, old idea”
Why we don’t get capital from investment bankers
Had a nice-but-unhelpful call with a real estate investment banker yesterday and thought the conversation would make for a good blog post. First: What’s a real estate investment banker? That’s a fancy name for a person or company that connects operators (like us!) with debt and equity. Generally, “investment banker” is used to distinguish the … Continue reading “Why we don’t get capital from investment bankers”
(Re)tenanting a vacant building
Regular readers know that we’ve renovated and re-tenanted something like 80 buildings over the past ten years. If you haven’t done this kind of thing before, you have no idea how complicated it is and how much can go wrong. Over 80 buildings, we have made every kind of mistake you can think of. We’ve … Continue reading “(Re)tenanting a vacant building”
Suddenly, everyone cares about insurance
The wild fires currently raging all over California have me (and some of my investors!) thinking about insurance. In general, the insurance premia Adaptive pays on our buildings can appear high, relative to premia paid by owners. Why? Most owners do the following: Buy an insurance policy when they first buy their building. Then, each … Continue reading “Suddenly, everyone cares about insurance”
Telling our story (again)
I remember reading one time that being the leader of an organization means repeating that organization’s story over and over and over again, to anyone willing to listen. Lately, I’ve found myself telling all kinds of people what we’re about. So, I figured I’d repeat it here, for those of you willing to listen. Adaptive: … Continue reading “Telling our story (again)”
The other LA tech story
Everyone interested in LA’s tech sector has been talking up Silicon Beach for years. SB is the constellation of tech companies, including SnapChat, Google, Facebook and others which are located on the Westside, mostly in Santa Monica and Playa Vista. But I think all the attention paid to SB has obscured the most interesting story … Continue reading “The other LA tech story”
The “How much are you putting in” Test
Whenever I’m out raising capital for an opportunity, I get asked the following question: How much of your own money are you putting in? I understand why people ask. They are trying to determine how much conviction I have in the opportunity. The more I put in, the more conviction I have that this is … Continue reading “The “How much are you putting in” Test”
What we ignore
Just finished work on the deck for our new fund*, and thought I’d share a “philosophy” slide of which I’m particularly proud. Veteran investors / sponsors will notice that our way of thinking about deals differs dramatically from those of most real estate private equity shops. For example, as you will see below, we refuse, … Continue reading “What we ignore”
Why I oppose Prop 10
Want to add my voice to those urging people to vote against Prop 10. Oh, you say, what a surprise! A real estate guy who dislikes rent control! Shocking! But, honestly, we’ve learned how to make money for ourselves and our investors under rent control. The more buildings that are subject to rent control, the … Continue reading “Why I oppose Prop 10”