Twenty Million and Up
A conversation with a well-known Architect-Developer Jonathan Segal about the evolution of his business model and the strategic advantages it gives him
Spencer Burton has knocked on farmers’ doors looking for land deals in the Pacific Northwest, and he has built over a hundred properties in Latin America as a real estate developer. But he realized that he would be happiest if he was doing complex analysis of multi-million dollar property deals. And for that, he made his way into institutional real estate.
As Spencer explains in our chat, pension funds, insurance companies, endowments, and others such institutions, have huge piles of cash which they need to invest. They often allocate up to 10% of that cash for real estate investments. Then it falls to people like Spencer to decide what (gigantic) purchases, or even loans, to make with the money in order to get the best return for those whose money has been entrusted to the institution. So unbeknownst to many people, skyscrapers are often bought, or loans for skyscrapers made, by life insurance companies or teacher’s pensions funds looking to earn return for their investors.
His fantastic website, Adventures in Commercial Real Estate, has lots more details about the tools and techniques he uses to make these deals. Hope you’ll check out the site after you listen to our chat!