Sasha Cucuz, Greybrook Capital
The Art of Delivering High Quality Real Estate Investment Opportunities
My guest today, Sasha Cucuz, is a Partner at Greybrook Capital, a capital aggregator that raises money from investors and then invests that capital in deals that other sponsors put together. It’s a bit like a private equity shop that crowdfunds their capital instead of relying on institutional sources.
For an investor looking to invest in real estate, you have a few choices. You can buy and manage directly, invest with a sponsor directly, invest via a crowdfunding platform, invest in a fund, or invest in a company like Greybrook who represents your interests with a sponsor. Theirs is an interesting structure and one that is not uncommon, but with 80 projects occupying 39 million square feet of projected density, and 27,000 residential units with $17 billion of projected gross development value, Greybrook is one of the biggest.
Find out more in this fascinating podcast with one of real estate's foremost leaders, Sasha Cucuz.
What You're Going to Learn
- Why Real Estate Is Not a Short Term Investment
- The Difference Between Real Estate Capital from Individual Investors Vs. Institutional Investors
- How High Net Worth Individual Meets the Real Estate Sponsor
- Exploring A System Designed to Address Real Estate Inquiries
- Being the Best at Private Equity Real Estate Investments
- Why Real Estate Development Can Be Extremely Complex
- How to Structure Real Estate Deals with Maximum Versatility for Clients
- What Is the Bridge between the Individual and a Real Estate Developer
- How Real Estate Developers Deal with the One Partner Strategy
- An Approach to Decision Making on Real Estate Development Projects
- How Maslow’s Hierarchy of Needs Applies to Residential Real Estate Resiliency
- How To Practice Due Diligence on Real Estate Sponsors before Investing
- And much more!
Listen To or Watch the Full Podcast Here
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Real Estate Is Not a Short Term Investment
ADAM GOWER: Sasha, thank you so very much for being on my podcast. A real pleasure to meet you and you guys are, at Greybrook, ginormous, huge institutional players, as far as your scale is concerned and yet you raise money from individual high net worth investors. Tell me why. Why don't you just raise money from institutions?
SASHA CUCUZ: It's a great question. So first of all, thanks for having me. It's a pretty simple thing really. You know, the way we look at the world is, individuals are really their people. They save. They're building for their retirements. They're looking at things on a very long term basis and that's something in real estate that's a very important consideration because real estate is not a short-term type of investment. So, our philosophy is, if we pick a strategy that's a great strategy and we focus on individual investors who are looking with a long-term investment horizon, we tend to have an alignment from a philosophical perspective. When it comes to institutions, you know, you're dealing with a company that has somebody managing the money and maybe they stay there for 10 years. Maybe they are there for 2 years and they leave and somebody else comes in. We like dealing with individuals because we can build relationships with those folks and if we take our time at the beginning to understand what their investment objectives are and ultimately what they want from their investments, over time, we think we can create a great alignment. So, we like to focus on that area.
Real Estate Capital from Individual Investors Vs. Institutional Investors
ADAM GOWER: So that's a very interesting distinction that you make. That, because you're a long term real estate investor, retail or let's say individual investors are more inclined, or you have a closer bond to them. What's interesting about that to me is, because I've always thought it's the exact opposite, actually, that it's institutional capital that is looking for insurance premiums today so they can pay out in 30 years. Whereas retail investors, if you'll allow me to use that term, high net worth individuals, they want income today and I know you do a lot of ground-up. They want income today in terms of preferred returns or some kind of dividend and they want to know that in 3-5 years they're going to get that money back in case they need it. So tell me more about what long-term means and address that contrast, if you like.
SASHA CUCUZ: So your general perception on the differences between the two is very accurate. I think, generally speaking, an insurance company, a pension fund, what we call "permanent capital sources" in our universe, they are very long-term oriented and probably more so than an individual. I think what I'm referring to, more than anything is that, when you're building a relationship with an individual, not to say that their objectives can't change, not to say that their life circumstances don't change, but generally, they're investing today so that one day they can retire, whether that's 10 years down the road, 20 years down the road, 30 years down the road and they're willing to, in a good strategy, kind of, stay the course if they trust you and if you've done a good job for them. A lot of these institutions, you know, some of them obviously have very long-term permanent strategies, but they also are more prone to reallocating, rebalancing. You know, one day they're looking for development. The next day they're looking for something different as they round out their overall portfolios. So, it's a a little bit less about the nature of the length of the investment and more so around how one manages their investment.
SASHA CUCUZ: I always make the joke internally that, you know, nobody's waking up in the morning thinking about their asset allocation. Well, that's what a pension fund manager does pretty much every day and then they'll spend all day with their team talking about their allocation and what they need to do to tweak it and it's first of top of mind, whereas for the individual investor, it's more of a byproduct. You know, they have a day job. They go to work. They don't want to worry about these type of things. They allow us to worry about these type of things for them. And I think that it just fits with the infrastructure that we built, which is a, maybe a different point of discussion but we set out, in the early days, to build an infrastructure, a team of people that can deal with individuals rather than institutions. And we have institutional capital so we have a group that deals with that capital but it's a completely separate group, a completely separate requirement that deals with our individual investors.
High Net Worth Individual Meets Real Estate Sponsor
ADAM GOWER: You have a whole team of people, don't you, that communicate directly with high net worth individuals. So tell me something, if you would, Sasha, about the investor journey from somebody who, somebody perhaps who's listening to this podcast that's never heard of Greybrook before. What's the pathway that they will go through in your system?
SASHA CUCUZ: Sure. So once they reach out to us, whether that be through digital means, whether they pick up the phone, we like to think of ourselves as having multiple ways to learn about us. But once they get a hold of somebody at Greybrook, the journey really begins with understanding the company first and then the product from a strategy perspective before we go into the deal. Right. And that's important to us because firstly, we built our whole business on partnership because we as a financier and a manager of developers and development, in every case, we have an execution partner, a developer that's actually doing all of the technical work on the ground, of course, with our support and oversight. But, it made us really understand how critical the decision of who your partner is to that equation. So, for us, the first thing that we try to do with an individual who comes across our firm is to really get them intimately familiar with us as a company, our history, our track record, our investment strategy, and get people very comfortable with this platform before we start talking about deals.
SASHA CUCUZ: So, I can tell you that we've had examples in the past where people learn about us through a deal. Right? They see something circulating and they're like, hey, I saw that deal, can I invest? And usually we have to kind of rewind and say, the answer is maybe. Not in an arrogant fashion, but it's all about suitability, whether this is a fit for what you're looking for. Because a lot of times, it may look that way on the surface, but, we have to get to know you first. We have to get to know what your objectives and risk tolerances are before we can match you up with the right opportunities. We like to rewind back to: why are you even seeking out an investment like this? Help us understand that. We'll help you understand us and then that journey begins and we take them through that process, getting to know one another, if you will, and then we start talking about specific opportunities and how we build a portfolio for that individual.
A System Designed to Address Real Estate Inquiries
ADAM GOWER: What I think you said was that, before somebody invests with you, you educate them on who you are, what you do, how you do it, your investment philosophy. But, what I think you said was that you have a team of people that do that. Do you use digital media to automate that process? That's kind of what I'm getting at.
SASHA CUCUZ: Yeah. So the answer is we do. We try to cater to the preference of the individual. So, it'd be a perfect world if everybody preferred the same means of communication. You can build out one way to, sort of, from the funnel right down to how you ultimately engage. We can do it all. So, there's individuals who find out about us online or through a friend. If they prefer to meet with somebody face-to-face. We have everything from that to a fully automated, you know, come on our website, request a discussion. You get sort of a virtual avatar, if you will, that's an actual person. Like, you're not dealing with an algorithm. You're dealing with a person who's part of our capital markets team, who ultimately is perfectly comfortable and equipped to deal with clients digitally and that whole process can be automated, everything from learning about the investment right through to the ability to transact, in fact, and buy an investment, to put it that way. All that can be done digitally. So I would say that, it's all driven by the preference of the individual and in fact, we find that, in most cases, people like some combination of the two. They like the convenience of being able to learn about things on their own, on their own time. Frankly, I'm like that as an individual.
SASHA CUCUZ: I like to sit there at night and say, OK, now my day is done. I've done all the things I need to do so let me get back to thinking about that investment or learning about this different strategy. We try to cater to the way people go about their investment decisions and that's what we've built and I think we can be very versatile about it at the end of the day. But we find that it's somewhere in the middle where people like to engage on their own terms and they can do that digitally. But there's times, even that individual will reach out and want to speak to a live person. And we don't have, it's not like a call center type thing, where you're getting somebody different every time. You're assigned from the minute you enter our universe, you're assigned a relationship manager right off the bat. And that is your relationship manager and you deal with that person and his or her team. There's somebody who's an investment professional who's there to kind of help with the investment. There's somebody who's more administratively inclined to help with paperwork and other administrative components. But that team, that you're assigned, is your team, and it stays that way throughout.
Being the Best at Private Equity Real Estate Investments
ADAM GOWER: That's really interesting. So, is the investment person an adviser? You're actually giving investment advice and figuring out what's the best for your particular investor?
SASHA CUCUZ: So one thing we try to be careful not to do is purport ourselves to be the be-all end-all for everybody. OK? We are experts in our chosen vertical which is private equity real estate investment. And even within that universe, we tend to focus more on what we call opportunistic or, sort of, ground-up development and/or rental type construction. So, what we do is, we are experts in that area and we can help you build a portfolio that is balanced and diversified within this subsection of the investment universe. So, we're not an investment adviser in the traditional sense, where I'd say, Hey Adam, let's sit down. Let me understand your objectives overall and how much you should have in stocks and bonds and where you should put all of that capital to work. We're more trying to work with those advisors and say, hey Adam, you know what? Your advisors put a plan together for you. Some percentage of that should be allocated to alternatives. This is a great alternative and here's how we can help round out your portfolio. So, it's not a comprehensive relationship. It's a very specific relationship. But we're also very collaborative with other advisors.
ADAM GOWER: And you also have a huge range of investment opportunities. So, if somebody comes through your door, you can point them to a ground-up development that's nearing maturity, I'm guessing, or a value-add where there is some ongoing income. Is that how you structure it?
SASHA CUCUZ: Yeah. Generally speaking, our investments are mainly in the residential realm, and that's by design. It's not that we're afraid to get into other asset classes. We have a very deliberate thesis on why we think the stability of residential real estate is something that individual investors, who have a long term investment time horizon, should generally be invested in, not unlike a pension fund or insurance company. Our investments are usually one of two types of genres. One is the ground-up development, where we will look from the approvals and permitting process right through to completion. Whether it be an apartment building that we would then sell at the end of its completion and stabilization, or whether it's a condominium building or whether it's a housing community. We do, kind of, a little bit of everything. And we have another strategy that is the value-add strategy where, we would acquire an asset that we feel can be repositioned and improved. That, usually has a cash flow component at the beginning, from the beginning, right through. And then obviously, we're hoping to generate a sort of outsized return through our value-add program. So those are two main genres. Every now and then we find a great retail property that we that we like to acquire. But I wouldn't say that that is the most common. We try to, kind of, stay in our lane and become the best at this particular area. And the way we work with our clients is to say, look, you should have exposure to all different types of assets within real estate. We'd like to be your go-to as it relates to this specific one, which we think offers a great risk reward relationship and for anything else, you should you should engage with others. So, again, it's very important for us not to overstep and we're very, very serious about maintaining people's concentration levels. And, you know, we've had clients over the course of history that we perform very well for, who say "great, I'd like to take my entire IRA and put it into your type of investment". And the answer is, unfortunately not, because that's not a good idea. We have the good fortune of having a lot of access to capital. So, it's really about creating the right strategies, the right portfolios for people and that's our focus.
Real Estate Development Can Be Extremely Complex
ADAM GOWER: That's really interesting, and I love that you use the term DNA because extracting your DNA is the single most important thing when it comes to communicating with investors. Wouldn't you agree?
SASHA CUCUZ: I do. I mean, like, you know, one of the things as it relates to communications and, you know, this is probably universal when you're dealing with individual investors. Real estate development and private equity real estate can be extremely complex. And you have to take a level of complexity and frankly, from a regulatory perspective, you know, quite sophisticated documentation. You're offering memorandums, your subscription agreements, like they're very legal and people need to understand them but, part of our job is to help them understand this in a simple way. And it's not, by any stretch saying, that a retail investors are simple. It's to say that retail investors are experts in whatever field they're in. Whether you're a public school teacher, whether you're a construction worker, whether you're an investment banker or a rocket scientist, you're probably really damn good at what you're doing in your own vocation. That doesn't necessarily make you an expert in real estate development. So what our job is, is to try to kind of come to communicate in a common language where we can take very complicated concepts and break them down into a digestible form so that people don't feel intimidated and it can be very intimidating. So a lot of times, unfortunately, I guess fortunately or unfortunately, depending on how you look at it, the legal aspect or the regulatory aspect that comes with investing in a product like this has to be very formal. So people get a significant amount of information and it can be intimidating where they say, man, I don't understand this. It's a lot of legalese. It's a lot of different documents. And we try to say, look, that's one stream and it's for your protection and you have to understand that but let us really get to the root of helping you understand the strategy, what the investment risks are, what the investment and opportunity is and we can do that in a simple way so that it's not intimidating. And that's really what we've become very good at.
Structuring Real Estate Deals with Maximum Versatility for Clients
ADAM GOWER: Fascinating. So you have described creating ideal, let's say, this $200,000 investor and rolling out their investments over a period of time. Correct me if I'm wrong, but you don't have funds do you? These are all individual deals. So why not? Wouldn't it be much more efficient to just put a fund together in a high-risk, a medium, and a low-risk fund, for example?
SASHA CUCUZ: It would. So the answer is, it would be more efficient for us. We try to look at the world. Maybe it's smart, maybe it's not smart. But the way we've chosen to look at the world is to say, if I were a client, I'd like to have versatility. So, if I raised a fund today, unless I raised a fund that had the widest parameters where I could do kind of whatever I want, however I want, whenever I want, then I could kind of attract Adam and whatever his investment objectives are. I could attract 10 other people that all have totally different objectives but I have a very broad-based strategy that allows me to do kind of whatever I want. But, when I buy that investment, what I've always thought about is, how am I matching two diametrically different objectives with one investment? So, what we've tried to think about is, if we do it on an individual basis, we can actually tailor portfolios. So, if you were a client of ours, you might say, OK, great, Sasha, I get it. I buy into your strategy. It's great. I'm ready to go. I've got $200,000 and the likelihood of you deploying that $200,000 inside of the first 6 months is pretty low. Inside of the first 12 or 18 months is actually probably the time horizon because we may have 6, 7, 8, 10 deals between the time we meet and the time you're allocated. Half of those may not be right for you. So, if I was just a fund, then you'd be invested in all of them with your pro-rata interest. This way, I think we can be a lot more versatile and create specific portfolios and specific exposure for our clients. So it's a little less efficient if you're on our side of the equation. But, you know, we built an infrastructure from day one that can deal with that type of transactional cadence. So it's something that we've digested and can deliver on as a firm and I think it gives us a maximum amount of versatility when we're dealing with our clients to create very specific investment portfolios for their own personal objectives.
The Bridge between the Individual and a Real Estate Developer
ADAM GOWER: So let me ask another thing going all the way back to that first time when you first started. What was it that made you decide to be an investor in other people's deals rather than investing in your own deals?
SASHA CUCUZ: Yeah, so that's a great question. You know, I think, it was twofold. One was, kind of, I'm a big believer in specialization of trade. And what I mean by that is to say, if I wanted to become a developer, I'd have to spend 20 years and all of my working life to become as good as one of the developers that I already have access to. So, why would I want to duplicate what infrastructure and capability these guys already have? By taking a partnership approach to things, we can focus on the things that we're good at, which is the capitalization, the structuring, the ongoing management, together with the developer. So, it's not to say, I want to make this clear to you Adam that, we're not here just to put a financing together. We are an asset manager in the sense that, when you invest your money with us, we will put it in a project with a developer and we, together with that developer, will manage that project going forward and make sure that it completes successfully. So, what you're getting is two layers of management. One is on the ground execution through the developer. And the second is that other layer of expertise that we bring to the table, which is actively making decisions together with our developer, reporting, financial discipline, running our audits, all the things that you would want to do and need or should have as an investor.
SASHA CUCUZ: So, where we decided in the early days, we wanted to specialize, was on that layer that we think marries very well with the execution. It's, sort of, that bridge between the individual investor and a real estate developer. And why we decided to do that, again, is that expertise that I mentioned at the onset, I think they have it. So why duplicate it? The second reason is that we felt there was a missing component, because if you're an individual investor and you invested directly with a developer, you know, at the end of the day, if the developer is making all the decisions as an investor, you're really beholden to that developer in their decisions. We, as the, sort of, middle person or asset manager, we are accountable to the investor. So when we deploy that money with the developer, we're there effectively representing the money and creating that secondary layer, that should give people a little more comfort and certainly it gives them more protection in the instance of making an investment in a product like this.
Real Estate Developers Deal with One Partner Strategy
ADAM GOWER: So, the implication of that is that you are, if not, the only investor with a sponsor, you are at least a significant majority investor. Is that the right assumption?
SASHA CUCUZ: Yeah, we're usually the only. So, the way that we like to do business is to have almost a joint venture where the developer has a relationship with Greybrook. Greybrook represents its capital. So to the developer, they're dealing with one decision maker. They're dealing with one partner, if you will, in decision-making, in execution, in strategy. And that's us, as Greybrook. We don't have a problem being in a deal with other GPs or other limited partnership vehicles. It's our strong preference to be the only. So usually the way we approach things is, the developer or sponsor will put up a share of the capital that they're accountable for. We, Greybook and its investors put up the balance and there's two parties at the table.
ADAM GOWER: And what is the biggest pushback that you get from investors or from new prospective investors to that kind of structure? And I have a couple in mind. I'm not going to suggest them, but....
SASHA CUCUZ: I think the biggest pushback is the fee structure because there's a promote structure that the developer, obviously, is entitled to. There's, you know, management fees, if you want to call them that, that we're entitled to. The vast majority of them are back-ended. So their success fee-based. We like to create an alignment in that regard. So people say, OK, great, well, but if I invest directly, then there's not this additional layer. And my answer to people is, look like you, and I'm not saying this because I'm on my side of the equation. This is how I invest in my personal life. Fees are there effectively if I'm getting value for them and the work is being done and it's either providing me with greater protection or greater maximization of my opportunity, I'm more than happy to pay them, especially if their back-ended success fee based fees. So, we like to look at this as saying, look, you're getting an additional layer not only of oversight, but actual execution, and we're there through our structure to protect investors. In many cases, you can invest directly with a sponsor. But again, you're going to be beholden to the decisions of that sponsor and frankly, look, I know this business enough to know that there's inherent conflicts as it relates to what's good for the money and what's good for the developer, who also has their infrastructure and other considerations that they're thinking about. When you're on our side of the equation, that goes away because the developer's infrastructure, their own considerations are of no consequence to us. We're making decisions strictly on behalf of the investor and what's good for the investor.
Decision Making on Real Estate Development Projects
ADAM GOWER: Yeah, it's very interesting and I always think of real estate actually, as an investor in somebody else's real estate deal as being a zero sum game, meaning any money that the developer makes, by definition, comes from the investor side and vice versa. It's zero-sum. So any kind of negotiation, any kind of fees, any kind of promote, it's zero-sum, basically. So as a small investor, one of the biggest problems that you have as a small investor is, you have "take it or leave it contracts". You want to invest with us, you should read it. You don't need to because we're not going to negotiate it. I mean, I'm not saying that, but that's the point. Take it or leave it.
SASHA CUCUZ: Yeah. And I think you know, I'll give you a different perspective on that, which may be helpful and I think that the way you've characterized it is generally correct in the sense that, you know, the zero-sum game I think is a little less our reality because in the game of opportunistic investing where you're taking, effectively an input or raw material, that's land, and now you're building a widget and there's value creation through that process. I think there's, obviously if you aligned it appropriately, there should be a lot in it for everyone. But I think to your point around control and, sort of, individual investors, there's a little bit of a quid pro quo. And the way that I look at it is to say, the reason that we don't offer control to even big investors, like we have investors that make up an entire LP for us. It might be an institution. It might be a very, sort of, an ultra high net worth individual that might be 20 or 30 million dollars of.... So we have literally us, one LP and the developer. That LP still doesn't have any more control than if you put $100,000 dollars in. And that's always been a negotiation because they say, well what do you mean, I'm putting up all the money, why don't I get a level of control? The answer is as follows: if you want to attract the best developers who have capital, right, so the reason developers work with us, or the type of developers that we work with, in any case. It's not because they need money. It's because, you know, like the way Apple accesses capital markets, I mean, they have more cash than they know what to do with but they'll still issue bonds. They'll still do the things because it allows them to be more efficient with their own money and allows them a better return on equity on their own capital. So, we have partners who are very well capitalized and if it's not the right business opportunity for them, they just use their own money. And it's not an economic deal. They look at it and say, look, if I'm getting into a partnership with Adam, if Adam is not a real estate expert and all of a sudden I'm in a JV and he has an equal say over everything we're doing, how do I put my destiny and everything I know, as the developer, and all the right decisions that I would make and rely on the fact that Adam, who's an expert in whatever his vocation is, who doesn't really know much about real estate, even though he's wealthy and can put money in a deal like this. I can't make decisions with Adam because how do I know that he's going to make the right decisions? How do I know he's not going to stop me from making a different decision that I want to make? So where Greybrook fits in and why we need to maintain this control is that over the course of our history and working with these developers on a repeat basis, they know that we know their business intimately.
SASHA CUCUZ: They know that we understand all of the risks, all of the different pressure points. And as such, they can rely on us to make decisions that are very much within the realm of their industry because we have shared experience and we have the same, sort of, understanding of the business. You know, if you were doing a deal directly with the developer, the JV might look a certain way where you have control over a very few things. In our deal, you'll have, through us, control over every single aspect of the development because the developer knows and understands that Greybrook knows how to make these decisions so I trust going into a 50/50 joint venture as opposed to saying, well, I'm going to go into a joint venture, but I'm going to retain decision making on all these critical things because you don't know anything about real estate and I don't say that in an offensive way. It's just a question of, who we are in the equation versus some of our investors who, again, just aren't experts.
Maslow’s Hierarchy of Needs Applied to Residential Real Estate Resiliency
ADAM GOWER: How do you promote something to investors when all this kind of "society living" is co-living in an extremely glamorous way, for anybody that doesn't know. I do recommend you go to the Greybrook website, have a look at that, because it's absolutely fabulous what they've got going. But how do you sell that to somebody who in whose mind is the only thing that's going on in their mind is, today: COVID. I can't use any of that. So in that context, how do you deal with people's deepest most concerns when you're trying to sell a product like real estate?
SASHA CUCUZ: Sure. So as an investor, I think, again, when we're investing in something that we're buying today, usually in the context of society, we're leasing it up in three years. You've got to first, get all your permits and entitlements and then you've got to build it and then you got to start leasing it. So anything that we transact on today, or since the pandemic started, your window to, sort of, when you start building and looking at leasing is a few years out. So you have to, again, take a long-term perspective and notwithstanding, it's hard to look through the fog at what's happening today and all of the unfortunate circumstances surrounding the pandemic. You know, if you believe that the world will never, ever, ever be the same, then we're having a different discussion. If you believe that, at some point in time, there'll be some version of "normal life", which I believe to be the case, whether it's fully normal or some slightly modified version of normal, all of the trends that existed that brought people into cities that made cities expensive to live in that the rental demographic and who those people are, assuming that that sort of comes back to some level that was a pre-pandemic level, generally, people can wrap their heads around it. So anything that we invest in today, people understand the context of the macro thesis and they believe, that OK, in a few years, there's a pretty good chance that many of the trends we saw heading into the pandemic will be similar to the trends that we see three years from now.
SASHA CUCUZ: I buy that. I think it's a great investment for that reason. So, to address it from an investment perspective, that's how we have to look at it. As it relates to what's happening on the ground with some of our projects that we've already invested in years ago, that are now at the point where they're leasing up or people are living in them. You know, it's been actually quite interesting because to sit here today and say that a co-living platform would be unaffected by the pandemic would be insane. Everything's affected by the pandemic to some degree. The question is, how do you manage that and what are the drivers and decision points for people? And I think that one thing that we try to do is to try to create as safe an environment as we can with the right protocols, with the right sanitation protocols and things like that. So, we create as safe an environment as can be but then also there's a reality when it comes to urban living, and that is price point. I always say that, I joke around and I say the sitcom "Friends" was really just adults who are living in an expensive city, rooming together. That's what co-living is. All we've done is automate it and make it a lot easier from the perspective of the tenant.
SASHA CUCUZ: So what happens in the pandemic era is that people who live in cities that are prohibitively expensive, a co-living solution allows them to access an urban setting at a much cheaper price point. And in some cases, they weigh the, OK, it's a pretty safe environment. I've got to live with roommates anyway if I want to live in this city. So, this is as good a situation as anything because it's professionally managed. It has the right protocols, as opposed to me relying on myself and my roommates to be doing everything. So in fact, we've been able to overcome that on the basis of preparedness, as well as on the basis of being able to deliver a, you know, what I think is a fantastic urban living experience and social experience within a price point that is a lot more attractive than what would otherwise be available. So that's really the way we've dealt with COVID. And frankly, we have a lot of evidence in our portfolio whether things are leasing up and they're in lease up or whether they're existing stabilized assets and we've seen a lot of stability which goes back to the macro thesis of residential real estate and it's resilience because at the end of the day, it's Maslow's hierarchy of needs. People need a roof over their head, whether they're living as an owner, whether they're living as a renter, they do need a place to live.
Due Diligence on Real Estate Sponsors before Investing
ADAM GOWER: What's the most important thing. Somebody's thinking of a high net worth individual who is not invested in real estate before? What should they keep in mind as they look for investment opportunities in real estate?
SASHA CUCUZ: Yeah, you know what? You're right. You called it. It's going to be a similar answer, which is you've got to know who you're investing with, especially in a strategy where you're passive. Like we just pointed out in our earlier discussion, we make the decisions. So while it's great for you to understand the deal and the piece of property and please get as comfortable as you can and want with that, before you even go there, diligence the partners. Who are they? Where do they come from? What have they done? What is their track record? Are they regulated? Make that decision first, because at the end of the day, that's going to determine the outcome of your investment. 100% of the time.
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