DURATION vs. LIQUIDITY

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-horizons.

BUT, it is at the expense of LIQUIDITY to LP investors, who have their money tied up for the long-term with one sponsor / investor.

Paramount to getting comfortable with DURATION: TRUST. Can you TRUST your manager. Who are they as a person. And TRUST is impossible to build in one meeting or one dinner.