Ep 70: Family Office and Real Estate with Billy Haddad
Billy develops new relationships, performs due diligence on potential ventures, and manages existing holdings for Partners Path, which invests on behalf of a small group of ultra-high net worth individuals, primarily focused on multifamily and mixed-use real estate in core urban markets across the United States. Previously, Billy worked in the Credit Risk and Public Finance divisions of Barclays for over five years. He received a bachelor’s degree in Economics from the Wharton School of Business at the University of Pennsylvania. In this episode, Billy explains what exactly a family office is and how it functions on behalf of ultra-high-net-worth individuals. We talk about investment timeframes, relationships with real estate operators, local versus out-of-state investments, market downturns, COVID-19, and unemployment, as well as cities versus suburbs, long-term consequences on major hubs, and what a family office like Partners Path looks for when wanting to invest alongside new operators. For all, you need to know about family offices and their increasing role in real estate markets, tune in today!
Key Points From This Episode:
Billy shares a bit about his background and his family office space, Partners Path.
What a family office is and how it functions on behalf of ultra-high-net-worth individuals.
The difference in investment timeframes in family offices versus other real estate investors.
Finding aligned interests and building long-term relationships with other real estate operators.
How Partners Path views opportunities differently when working with local operators – focusing on the market in general and opinions about individual operators.
Taking a lower return on local deals because of higher cap rates in New York.
How downturns in the market affect market prices, how COVID-19 has impacted cap rates.
The impact of COVID-19 on the market in New York, particularly whether or not tenants are paying rent, how forgiving lenders have been, and how owners are holding up their assets.
Changes in the way operators are underwriting deals, approaching delinquency and vacancy.
Unemployment and how it will affect rent payments and people moving out of major hubs.
Why the suburbs with more space are more appealing during the pandemic.
An increase in available leases versus lease renewals in Partners Path’s properties.
Predictions for long-term consequences of COVID-19 on major cities like LA and NYC.
Why Billy thinks that people will return to normal once the pandemic is over.
Some of the things that Billy looks for when he’s searching for new operators to invest alongside with – track record or pedigree, familiarity with the operations of big firms.
The pros and cons of investing out-of-state and finding deals in different markets.
“When it comes to [non-local] markets we’re looking at, long-term, what do we think of this market, and also what do we think of this operator? Is this somebody who, 5, 10 years from now, we want to have done 10, 15, 20 deals with?” — Billy Haddad [0:14:43]
“We really like it when the property management is either done in-house or is something that the partner list aspires to. Otherwise, the person is largely doing something that I could do from my desk here in New York.” — Billy Haddad [0:35:35]
Links Mentioned in Today’s Episode:
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