Before the 1990s, real estate was mostly owned by families, developers, insurance companies, and pension funds. Closed-end, blind-pool private equity funds debuted in early 1990s. The model benefitted from: High cap rates (purchasing fragmented real estate, typically owned by families without other liquidity options) Decreasing interest rates Institutional value-add initiatives Later, portfolio level synergies (internal infrastructure, property level costs) Now we are

Downside for buying small properties unlevered: lower IRR Sometimes, lower MOIC Upside: Protect basis during macro downturns Maximize whole $ profits ("you can't eat IRR") Significantly less risk of "losing your equity" Lowers transactional friction (lending process the same for $2m and $40m deals) Time-horizon and business plan optionality Most surprising benefit: can offer compelling seller financing at exit to enhance pricing Current investment market conditions favor rea

In real estate investing, there's a fundamental tension between DURATION and LIQUIDITY. Benefits of long DURATION in a real estate fund: frictionless compounding of interest, ability to harness Operating Company Value, the power of scale, knowledge of your own assets, data / information. We've materialized this first-hand in our employee housing, neighborhood retail, and vacation rental platforms. I feel very strongly that real estate investing performs best over long time