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Welcome to the Counting Capital podcast. I’m Robert Brunswick, Chairman of Buchanan Street Partners and your host. Buchanan Street Partners is a real estate investment management firm based in Newport Beach, California. The focus is on value investing and commercial, multifamily, and self-storage direct ownership, and in making real estate debt investments. Our monthly program was established to provide educational insights to not only the real estate marketplace, but the greater investment arena.
I will be inviting and joining in conversations with varied experts and personal relationships that I’ve established over my 40 years in the business. As a former adjunct professor at UCI, I’m confident you’ll enjoy the content-rich learning format and high-quality guest resources. We’ve created our Counting Capital podcast to benefit our company’s existing clients, family members, registered investment advisors, and the greater learning community.
I’m regularly asked what’s different about real estate today versus when I started in 1981. Is real estate investment business a good career for someone to consider? What’s the best way to invest in real estate? How does real estate differ from other investible asset classes, and so on. 1981 was a great year for rock and roll with the Rolling Stones’ Start Me Up, Foreigner’s 4 album, Journey’s Escape, and many others, but not such a great year for the real estate industry as the prime rate topped out at 21.5%. And with real estate’s need for meaningful capital leverage, this was not conducive to making new real estate investments.
Yes, in 1981, the capital markets were unpredictable at best as real estate was simply viewed as an adjunct or occasional investment for an institution or high net worth investor as a majority of capital was deployed in the bond and equity markets. When I entered the business, aside from the high interest rates, real estate careers were few and far between as job opportunities were limited to brokerage, development, construction management, and lending with most participants needing to be generalists as they responded to the significance cyclicality of the asset class.
For myself, I learned the trade by leasing office buildings where I would start at the top of the Transamerica building in San Francisco and work my way down looking for clients to hone my craft of the job. We now fast forward to an asset class that has grown by leaps and bounds, primarily because of four variables, including a public debt and equity market that allows for the predictability of capital flows, and a vastly improved educated workforce with many colleges now offering an undergraduate or graduate degree in real estate. Most importantly, a transparency of reporting protocol that assures investors and investment managers of a standardized communication format. Lastly, the immediate access to information that enables the investor to quickly and prudently triangulate data on a particular investment.
Today, the real estate industry offers tremendous real estate career opportunities with much more specialization and expertise required and taught as the real estate asset class has become one of the most significant alternative investment options within today’s greater investment marketplace. Previously, the industry was described as having four major food groups, including office, industrial, multifamily, and retail. But real estate’s current product platform now offers a greatly expanded menu of investment opportunities to include such things as student housing, senior housing, self-storage, cold storage, life science, medical office, data storage, and many loan debt products, with each capturing significant capital flows as most institutional investors now look to allocate in excess of 10% of their investible assets to a diversified real estate investment portfolio.
So when I’m asked, what’s the best way to invest in real estate? It depends on many factors, including the investment amount, the need for liquidity, timeframe expectations, the appetite and understanding of risk, and investors’ own investment experience, their greater investment portfolio, and the other available investment options. Today’s real estate market offers public REITs, crowdfunding vehicles, public and private funds, individual direct investments, and soon to be access to your own 401k to enable you to satisfy your real estate allocation.
I’m confident you will enjoy our Counting Capital monthly podcast as we present you with diverse content from our knowledgeable resources who will provide their own unique perspective within their area of expertise. I look forward to seeing you on next month’s episode for a conversation with my business partner and good friend of 25 years, Tim Ballard, our company’s president and CEO. Thank you for joining us on this episode of Counting Capital. I hope we provided you with some good learning.