Alex Lieberman

In my first podcast episode for PERE -- and very first ever cover story -- I looked at the cracks that are beginning to show in the multifamily market. For Spotlight, I spoke to Brian Thies and Christopher Wolfe from Fitch Ratings about banks' exposure to the asset class, and how much the narrative around residential may be changing. You can listen here: https://lnkd.in/dNtTTYRf 

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Excited to share the findings from the latest John Burns + CRE Daily Fear and Greed Index Q124. We had a record 1400+ subscribers participate. Here are some of the key takeaways: 📉 The percentage of investors planning to increase CRE exposure fell from 54% to 43% this quarter despite having 𝐩𝐥𝐞𝐧𝐭𝐲 𝐨𝐟 𝐜𝐚𝐩𝐢𝐭𝐚𝐥. 📈 Investors favor 𝐢𝐧𝐝𝐮𝐬𝐭𝐫𝐢𝐚𝐥 𝐚𝐧𝐝 𝐫𝐞𝐭𝐚𝐢𝐥 investments over office and multifamily investments. This has been an interesting story to follow. 🟢 68% of CRE investors are 𝐦𝐚𝐢𝐧𝐭𝐚𝐢𝐧𝐢𝐧𝐠 𝐜𝐮𝐫𝐫𝐞𝐧𝐭 𝐞𝐱𝐩𝐨𝐬𝐮𝐫𝐞 (up from 66% in 4Q23 and 49% in 3Q23), with only 20% increasing and 12% decreasing. 𝐖𝐡𝐚𝐭'𝐬 𝐭𝐡𝐞 𝐛𝐨𝐭𝐭𝐨𝐦 𝐥𝐢𝐧𝐞? 📉 Investors became less optimistic this quarter. 📈 Sentiment is shifting positively. 💰 Uncertain rate cuts keep capital on the sidelines. 📊 Next quarter's F&G index should reflect a bottom. Download the 1Q24 survey findings: https://lnkd.in/ewhdiwpg #credaily #johnburns #fearandgreed #index #commercialrealestate

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Machine Learning is revolutionizing Venture Capital in ways that may not be widely recognized yet. In the past, building billion-dollar companies required hefty investments upwards of $200M, typically at a late-stage growth round. However, today, small teams of 4-6 individuals with a few contractors are achieving multi-billion dollar valuations right now. Today. The ability to leverage Machine Learning for tasks such as source code development, architecture building, lead generation, marketing content creation, and customer support is enabling these lean teams to operate capitaly efficient. This trend is expected to keep company sizes small throughout their growth trajectory. As AI and ML technologies continue to empower entrepreneurs, the barriers to entry in the startup space are significantly decreasing. This shift is likely to drive a surge in the number of startups, with projections indicating that 90% of companies in the near future will emerge from the startup ecosystem. Exciting times lie ahead for the startup landscape as technology reshapes the entrepreneurial journey.

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Per PitchBook, PE managers' returns to LPs are still in decline. The data speaks for itself. Clearly the past few years have seen a significant decline in realizations. However, one of the biggest mistakes continually made in investing is to take recent data and simply extrapolate it into the future. The article makes the statement: "The decline is a sign that PE realizations have yet to bottom out, as GPs navigate unfavorable market conditions for exiting their often long-held investments." I wouldn't be so sure. The data might actually be pointing out that the decline has bottomed out - and we simply have not yet recognized it. The investing markets are a pendulum, constantly swinging back and forth between wide open capital markets and markets closed tight. We have been in a closed market for some time now. Don't be too surprised if what we are experiencing now is the early innings to a thaw. Only time will tell... Endeavor Colorado #privateequity #venturecapital #innovation #entrepreneurship #founders #startups #investing https://lnkd.in/gCCWN9_D

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2 active fund offerings from the Echelon Fund team who have been killing it ever since their cohort at The Fund School. https://lnkd.in/gVd-dhfY sidecarportfoliofund.com This presentation of Echelon Fund, LLC and Sidecar Portfolio Fund (the “Company”) is for information only and shall not constitute an offer to buy, sell, issue or subscribe for, or the solicitation of an offer to buy, sell or issue, or subscribe for any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The information contained herein is subject to change without notice and is based on publicly-available information, internally developed data, third party information and other sources. The third party information has not been independently verified. While the Company may not have verified the third party information, nevertheless, it believes that it obtained the information from reliable sources and has no reason to believe it is not accurate in all material respects.

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Today's Thesis Driven explores the rise of rewards and loyalty programs in multifamily. They're one of the few bright spots in proptech, with Bilt Rewards raising $200 million at a $3.1B valuation earlier this year. Loyalty and rewards are mainstays of hospitality and travel - can they translate to the multifamily sector? Investors and a handful of entrepreneurs clearly believe so. Bilt isn't the only player in the multifamily rewards space - this morning, cash back rewards company Stake announced its acquisition of Circa, a delinquency management and collections app. Unlike Bilt, Stake and Circa are focused on the "everyday renter" and are often found in workforce housing and garden-style properties. The rise of these rewards apps - which often include their own payments systems - puts property management systems like Yardi, RealPage, Inc., and Entrata in an awkward spot. While rewards apps are gaining popularity with owners, PMS players have historically owned the $750 billion in annual rent payments and aren't keen to give it up. Apps like Stake also may have a role in the future of financial services. Stake sees itself as becoming a sort of "renter's bank", offering financial services alongside its existing checking account, debit, and cash back options. Regardless, it'll be fun to watch the dynamics in this fast-moving sector. Full deep dive on Thesis Driven linked in comments!

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What does “Turnkey” mean? 🤔 It means to be implemented into a current business process without disruption. To be honest, bringing technology to Apartment buildings & developments is the farthest thing from turnkey… But at Grata we are constantly enhancing and evolving our Full-Service offering to bring our mobile app solution to any building, anywhere at anytime and make the complicated, turnkey. And yes, we take it as far as 1-on-1 sessions with residents to adopt and answer any questions. The Grata difference is we treat every building like our own, and your residents and property management team are very important to us. 🤝 Shoutout to Arjun Mali pictured below 🚀 #RealEstate #Technology

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The state of venture capital is wild right now. We are witnessing a surge of innovation across the spectrum: - Funds merging - VC doing PE - PE doing VC - Secondary funds - Buyout funds - Spin-out funds - Debt funds - Continuation funds - Infrastructure funds - GP turnover - Hard Tech surging - Family Office uptick

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A Manhattan office building is set to be sold at a roughly 67% discount, signalling just how far values may have fallen for certain properties. Empire Capital and Namdar Realty have agreed to buy 321 W. 44th St. from Related Fund Management for less than $50 million, a massive drop from the $153 million that Related purchased the building for in 2018. The market largely froze up over the past two years as lenders and owners struggled to agree on pricing, holding onto assets instead of being forced to sell at fire-sale prices. But looming maturities and rising costs are starting to push more owners to cut their losses. Read more Bloomberg News

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In the multifamily real estate scene, it's all about innovation and adaptation. My recent conversation with Kevin Bupp uncovered the need for creative financing solutions as we navigate market oversupply and lender liquidity issues. Preferred equity is one such lifeline, offering a strategic cushion with fixed returns that prioritize investors. This adaptable approach is shaping the future of our investments. Listen now! https://hubs.li/Q02vnKb90 #PreferredEquityInvestments #CREInvestments #AccreditedInvestors

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When search fund entrepreneurs come to a point where they're ready to present a Letter of Intent (LOI) to a potential seller, the real work begins. The LOI is a buyer's version of a term sheet. It lays out the structure of the deal, identifies the transaction structure and includes a price. It's the first step on a long journey. But before the LOI, there's not much ability to do confirmatory due diligence. Until the LOI is in place, most sellers with alternatives in the marketplace won't stop and take the risk that the fledgling search fund is actually a serious buyer. As a result, it's a pivotal moment. The buy-in starts with the seller responding to the LOI. If they're fairly prompt, respectful and communicative, that's a good sign. If they understand the LOI, push back only on things in the LOI that matter to them the most, and are willing to sign it, that's a very good sign indeed. The buy-in is secured by the search fund operator doing everything they promised in the LOI. The buy-in is further supported by the seller owning the due diligence process, not inventing new contingencies and making it easy to meet other stakeholders (i.e., employees, customers, etc.). If the seller is doing the work to complete the LOI, is hustling to get it done, is not pushing back on most of the terms, if the seller can explain the company's value and reason for being and if the seller is eager to work with the search fund operator to surmount any challenges that arise, these are all signs of buy-in. It's quite possible that a seller might later negotiate on the fine points of the final agreement. But if the LOI is a fight, it's going to be very hard for the sale to happen. If there's a deal, there's buy-in. If there's not buy-in, there's no deal.

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There have been a lot of headlines on the liquidity issues faced by non-publicly traded REITs, particularly Blackstone’s B-REIT and Starwood's S-REIT. Both firms have been facing major liquidity squeezes... but is panic warranted? My two cents: things are going to be OK. Given the number of questions I’ve received on the issue, I wanted to lay out the facts and offer my perspective: 🤔 What's a Non-Traded REIT? Unlike publicly traded REITs with readily available stock market liquidity, non-traded REITs (NTRs) offer limited redemption windows, creating a structural challenge. 🤷 The Problem? A recent NAREIT study shows a 22% increase in NTR redemption requests, highlighting the difficulty NTRs face in meeting redemption demands without sufficient cash flow. ⏰ Why Now? CBRE revealed a 15% drop in office occupancy rates, highlighting negative real estate sentiment and potentially driving the 22% surge in NTR redemption requests. So, what does this mean? 🔎 BREIT faced significant redemption requests throughout 2023 and in 2024, but successfully fulfilled all requests in February, March and April of 2024. 🧐 SREIT's liquidity reserves dropped significantly, reaching a low of $752 million in April 2024, forcing them to tap a $1.3 billion unsecured credit line with limited remaining funds ($225 million). 💡Non-traded structures have created a liquidity mismatch - investors hold quarterly redemption options, but the underlying assets and sluggish CRE market make it difficult for firms to liquidate properties fast enough to meet demands. Reality or Market Jitters? BREIT and SREIT’s respective office exposures are a mere 3% and 7%, representing a miniscule amount of the PE giant’s NTR’s gross exposures. Likewise, both BREIT and SREIT boast 95% occupancy across all sectors - further highlighting the quality of the minimal office product within each firm's NTR vehicles. Recent liquidity challenges highlight a negative sentiment on commercial real estate, which has led to a bank-run-like panic from retail investors seeking to pull cash out. This sentiment mostly stems from higher interest rates and office woes: declining demand due to remote work trends, lower rents, rising vacancies, and refinancing difficulties for office owners with maturing loans on lower-quality properties. Redemptions more than likely stem from these negative headlines and a level of retail investor unsophistication of what they actually own. TLDR: BREIT and SREIT's minimal and strong performing office exposure positively positions them to navigate these challenges, although there are some lessons learned by the industry about this structure and the consequences of retail participation. While this issue likely won’t go away in the near term, I don’t see this issue mushrooming into a bigger catastrophe. While Blackstone’s Jon Gray may be biased, I agree with his quote from a recent interview: “the market has reached its nadir, and now is the opportune moment to buy.”

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Check out another Invest Clearly verified investors review on VonFinch Capital

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EtA and Search funds (self-funded and traditional) will be consistently rivaling LMM PE funds and strategic buyers as the buyer of choice within 3-5 years. These acquirer types aren’t acquiring “below the PE radar” businesses anymore. That’s simply an outdated narrative. They are regularly buying $10-$40M lower middle market businesses. Here are 3 fresh data points that are giving me this glimpse into the future of small business acquisitions and ownership: Example 1: IT Services MSP serving regulated entities ~$8M revenue in ‘23 $1.9M EBIT in ‘23 ~$9M revenue in ‘24 ~$2.6M EBIT in ‘24 Sold to a searcher (MBA grad on his second lap as a search fund CEO). Sourced via Axial. The search fund outmaneuvered 30+ independent sponsors, 20+ committed capital PE funds, 10+ family offices and 4 strategics on this deal. See image below breaking down buyside demand by buyer type for this acquisition (data source: Axial platform) Example 2: Retail Health SaaS for patient acquisition ~$8M revenue ~$3M EBIT 90% 3-yr EBIT CAGR Sold to a traditional search fund for <6X EBIT (mid-career MBA, 1st time CEO). Directly sourced off market. Example 3: Distributor of Police, Fire, and Ambulance products $15M+ revenue in ‘22 $2.8M EBITDA in ‘22 $16.4M revenue LTM $3M EBITDA LTM Sold to a self-funded searcher. Sourced via Axial. Competition on this deal included 15+ individual sponsors, 6 PE funds, 6 family offices, and 2 strategic buyers. Historically, PE and Strategics maintained a “symbiotic” relationship with EtA and Search. EtA would buy sub-$2M EBITDA businesses, grow them to “LMM PE worthy” status, and then PE/Strategics would take them out. It's not such a black and white dynamic anymore. Brokers and M&A Advisors need to take this buyer category seriously, and PE and strategics need to continue to advance their differentiation strategies. EtA is maturing, the number of impressive operator acquirers is increasing, and LP capital is flowing. More data on closed deals can be found via the link in the comments.

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Unlocking Investment Opportunities with Tango CRE Join Tango CRE as they share high-performance strategies and insights into their investment ventures, including storage, multifamily, medical office, and land development. Learn how to connect with Tango CRE to explore exciting opportunities and build valuable relationships. #InvestmentOpportunities #TangoCRE #RealEstateInvestment #Multifamily #Storage #MedicalOffice #LandDevelopment

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📣 🔎 This an open call for #mergersandacquisitions insights from the #behavioralhealth industry. 🔍 📣 What would you call out as the most interesting deals of 2024 so far? I'm looking for insights from folks that work in... #venturecapital #privateequity #mentalhealth #addictiontreatment #autism #eatingdisorder #hospitals #psychiatry #healthplans #managedcare If you have insights you don't want to talk about publicly, DM here or email me at clarson@wtwhmedia.com

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It is no secret that fundraising has been incredibly challenging for founders at all stages. According to Carta’s Q1 2024 State of Private Markets report, Seed stage deal count fell 33% from Q4 2023 and Series A deal count fell 36%. Additionally, total cash raised in the same period was 30% less at each stage suggesting rounds sizes are also getting smaller. In this next edition of Collaborative Fund's Founder Support Series, I get into the details of how to prepare to fundraise in a challenging environment. Have a read and let me know what you think: https://lnkd.in/gJjqhsCd

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