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Transcript:
Chris Bounds 00:00
What are your thoughts on the current current market?
DL Campbell 00:02
Well, you know, there’s a lot going on, and I’m trying to stay out of it as much as possible. I’m going to uli.org to find the market trends and we just had a really good update on the market yesterday that was very pretty positive, very positive on the multifamily side. Retail is is okay, it’s going to be okay. Industrial is going to have a challenge because it’s over built. And office has been soft for decades. So we really had a good market update in terms of unemployment, and also in NA I O P. has good training. CBRE has some good trending. So what I’ve done is I’ve been staying away from the syndication seminars, that are telling people to buy anything, you know, no matter what.
And going with more of the industry standard, professional organizations where I know that, like, I have all the knowledge but I’ve put my guys through the ULI the Urban Land Institute training, because they have good foundations of commercial real estate that a lot of these syndicators are not teaching. So I think that’s that’s the biggest problem is knowledge base, there’s a skill set gap over the last three to five years and it’s causing, it’s causing a lot of uncertainty and havoc in in the market.
On the flip side, you know, what is doing for our deal is the lenders are saying seeing our ultra conservative underwriting, and it’s shining so brightly. So even with interest rates rising and banks closing, and that uncertainty, investors have pushed the pause button. In some cases, our investors because our deal is conservatively underwritten and profitable from their standpoint, they are actually coming back in to strengthen their positions and increase their positions. So there’s both sides. There’s a lot of stuff going on long volatility, but it makes our deal or any of your off market deals. It makes them shine because they’re much much better. Yeah,
Chris Bounds 02:34
in market volatility, there’s a flight to quality. I mean, some may pullback and panic can just kind of hold off. And then others though. They want quality. Your blue chips, if you will. Class A, as far as real estate is concerned. So it seems like that’s what you’re seeing.
DL Campbell 02:56
Yes. So what are you all working on right now? We’re primarily
Chris Bounds 03:01
for, or at least our fund is primarily focused on workforce housing, cash flowing assets and strong markets that have long term projection growth with and this is the biggest paramount, very experienced operators. So yes, and these are operators who have been in business for much longer than the last three years. Like what what we’re doing right now, San Antonio, where they have 40 years of experience. Three billions of transactions. And there’s institutional backing in that in the billions. So in its class A, so those kinds of assets are, what we’re focused on.
And ultimately, what I encourage investors, passive investors or operators, that, if you’re going to work with someone definitely really underwrite the operator, because anyone who’s started real estate in the last 10 years, for the most part, they have not experienced cloudy skies, or turbulence. There’s been some hiccups here and there and local. I mean, hurricanes could you know, you may have storms, and then there was a pandemic, those things are real, but by and large, has been a pretty strong macro market. It’s not the case anymore. Clouds are brewing recession hence or seem like they’re, they’re always being whispered and getting stronger. We just don’t know.
I personally am very bullish long term on residential real estate. But there are short term challenges that operators are going to have to overcome costs just skyrocketing across like in double digits, year over year, like taxes and insurance and materials and labor, utilities. Then you have debt. I mean, that’s that’s the Biggest probably one of the biggest challenges how are you financing it? Are you doing bridge? Is it is it floating rate? What can I catch you buying and how much are those caps costing you? And then of course you have the local market and the demographics and whatnot. So we focus on really strong operators
DL Campbell 05:19
in great markets, strong assets.