Ep 159: From Fund to Syndication with Brian Adams
Most real estate businesses and investment groups follow the trajectory of starting with syndication and transitioning to funds. Our guest today has taken the opposite route, with excellent results. Brian Adams is the President and founder of Excelsior Capital, where he spearheads the investor relations and capital markets arms of the firm. In today’s episode, we get together with Brian to discuss what prompted him to choose syndication over funds and what he has learned and gained from it. Tuning in you’ll hear Brian discuss the pros and cons of this model and why he is dedicated to raising capital in a way that fosters positive relationships with his clients. We unpack the effect that the COVID 19 pandemic has had on his client needs as well as where people are investing. Brian explains his use of drone footage along with a subtitled pitch overlay and why it’s been so convenient for his clients. Later Brian breaks down how the migratory patterns of millennials and how they are investing in real estate. Hear how Brian’s observations on how the COVID 19 pandemic has affected office spaces and densification and what he predicts for the work-from-home trend over the coming years. We had a great time chatting with Brian and we’re sure you will find the conversation as thought-provoking as we did! For all this and much more, tune in today!
Key Points From This Episode:
Meet today’s guest Brian Adams.
Why Brian decided to switch from funds to syndication.
Why there can be a lot of pressure to start a fund if you're in the real estate business.
Why it’s more challenging to close syndication deals than if you had a fund structure.
The emotional element of choosing a location to invest in.
The financial health of real estate businesses in general and why they are often worse than they appear.
The type of relationship Brian cherishes with his clients.
How Brian provides value to his clients outside of the deal.
Brian’s approach to raising capital that also fosters positive relationships with his clients.
What Brian has learned about his clients’ needs during the COVID 19 pandemic.
How Brian anticipates the questions that investors will ask.
Brian’s use of drone footage with a pitch overlay and why it’s convenient for clients.
How the COVID 19 pandemic has affected office spaces and densification.
How the pandemic has affected where offices are located.
The working from home trend and why Brian predicts it will change in the next two years.
How millennials are approaching property acquisition.
The challenge of parking for central business districts.
“We pivoted, because, you know, I think a fund for real estate and the type of real estate that we're doing is just a sub-optimal investment vehicle for individuals and families.” — Brian Adams [0:05:42]
“If you're looking to deploy $25 million, you want diversity, you want security, you've got to write a pretty big-ticket because you have a larger minimum, I think a fund is a really good vehicle for you.” — Brian Adams [0:05:55]
“I mean, you can imagine if you had true discretionary capital, push the button, two weeks later, you get X amount of million dollars, you go acquire a property, whereas I like to be held to account of having to defend my underwriting, my assumptions, markets, etcetera.” — Brian Adams [0:11:09]
“I wanted a relationship where I could provide value beyond the deal itself, right? So introductions, referrals, education content, we do all kinds of things there to try to add value beyond just the deal. And I like that type of relationship.” — Brian Adams [0:16:56]
“Even if they liked me, and they like our deals, they don't necessarily want me to take them out to lunch and pitch them every time. So what we started doing was when we send out an opportunity, we create drone footage with a subtitled pitch overlay.” — Brian Adams [0:20:49]
“Millennials, which are now the largest generational working cohort in American history, 73 million people. And because of the Great Recession, their family formation phase got pushed back three to five years than average, but they're starting to get married and have kids.” — Brian Adams [0:34:10]
“What we're seeing play out is employers realize that they need some kind of physical footprint in these locations, and CBD downtown areas.” — Brian Adams [0:38:33]
Links Mentioned in Today’s Episode:
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