🏦 Recession vs. resilience: BEC '24 recap

Plus: Anthony Vicino scales leads, and two winners take home $600K in investment dollars.

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Best Ever CRE Team
April 14, 2024

 

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👋 Hello, Best Ever Community!

In today’s special edition newsletter recapping this week’s Best Ever Conference, CRE experts debate the likelihood of a recession, Anthony Vicino scales leads, and two winners take home $600K in investment dollars. 

➡️ Plus: Want to promote your business to the Best Ever audience? Here’s your chance! By referring new subscribers to the Best Ever newsletter this month, you can earn a chance to win a branded blog post on our website, a dedicated branded email, and more. Learn more below!

This newsletter is brought to you by Viking Capital, a multifamily boutique with nimble investment sourcing, structuring, execution, and asset management capabilities. Learn more about Viking Capital here.

Onward!

⭐️ TOP STORY
RECESSION OR RESILIENCE? CRE EXPERTS WEIGH IN

The Best Ever Conference's Economic Summit brought together two renowned experts, David Rosenberg and John Chang, to share their insights on the current state of the economy and its potential impact on commercial real estate investments. While their perspectives differed, both speakers provided valuable analysis and recommendations for navigating the complex economic landscape.

David Rosenberg (Rosenberg Research) made a detailed case for an impending economic downturn and recommended defensive investment positioning, even as the consensus remains relatively optimistic for now.

  • Rosenberg is still calling for a recession despite others abandoning that forecast, arguing that interest rate hikes just haven't fully impacted the economy yet due to lags.

  • Fiscal stimulus and excess savings from pandemic relief programs provided a big boost to the economy in 2021–2022, but those impacts are now fading.

  • Despite the resilient economy and job market currently, Rosenberg sees growing imbalances that need to mean-revert, likely through lower interest rates and a potential stock market downturn.

  • He recommends defensive positioning in bonds, dividend stocks, utilities, REITs, and energy while avoiding riskier equities on expectations of better bond returns in the next year.

On the other hand, John Chang (Marcus & Millichap) presented a more optimistic outlook, saying that despite potential recession risks, "It's going to be okay."

  • He identified the top five trends that will impact commercial real estate over the next five years as AI/technology, demographics (millennials and baby boomers), housing affordability, public policy, and deglobalization/supply chains.

  • While AI may disrupt some industries, Chang sees the digital transformation from e-commerce and remote work as currently having the biggest real estate impact.

  • The large millennial generation entering prime homebuying years will drive housing demand, benefiting single-family rentals and build-to-rent despite affordability challenges.

  • Chang recommends investors keep a long-term five-year perspective on where demand drivers are heading rather than getting distracted by short-term volatility.

🌎 BEST EVER CONFERENCE 2024
FARMER VS. HUNTER: SCALE YOUR LEADS

Anthony Vicino (Invictus Capital) shared his insights on leveraging social media to build a powerful brand and attract an abundance of deals, partners, and capital in the competitive real estate industry. 

By consistently creating valuable temporary and evergreen content, engaging with target audiences, building an email list, and mastering the art of storytelling, Vicino says real estate entrepreneurs can attract more deals, partners, and capital than they can handle, amplifying their impact as agents of change in society.

  • There are two ways to generate leads — being a hunter (actively pursuing leads) or a farmer (creating content to attract leads). Being a farmer allows you to scale beyond your individual efforts.

  • The key is to consistently put out content on social media. Temporary content (posts, stories) makes people aware you exist and drives traffic to evergreen content (blogs, videos, podcasts).

  • Evergreen content establishes credibility, transmits ideas, creates connection, and most importantly drives traffic to your website/email list.

  • Your website has one key objective — to get visitors' contact information so you can follow up with them, not just look fancy. Your email list is your most valuable business asset.

  • Consistency is critical. You need to keep putting out content even when it feels like no one is paying attention. Successful people failed a lot to get where they are.

  • To jump-start growth, engage thoughtfully in the comments of accounts that already have the audience you want to attract. Provide value there instead of just pitching.

  • Build your system in reverse — email list and website first, then evergreen content, then temporary content.

  • The secret to viral content is storytelling. Learn to tell engaging stories about what you do, how, and why in a way that influences your audience. That's how you attract more leads than you can handle.

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New Braunfels, recently named the "Third Fastest Growing City in the Country," boasts a remarkable population growth of nearly 40% in just five years. This growth is fueled by the influx of new major employers, vibrant entertainment centers, and thriving tourism, making it a hotspot for residents and visitors alike.

As the highest-occupancy submarket in the Austin-San Antonio MSA, Villas at Sundance enjoys robust tenant demand, ensuring a stable income stream for investors. With minimal new supply expected in the area, Viking Capital has secured this asset at a substantial discount, presenting a remarkable opportunity for investors to capitalize on the region's unparalleled growth potential.

Don't miss out on this exceptional investment opportunity! Register to learn more today.

🌎 BEST EVER CONFERENCE 2024
PITCH SLAM WINNERS TAKE HOME $600K

On the final day of the Best Ever Conference, four finalists pitched unique real estate investment opportunities to a panel of judges, ranging from ground lease and private lending funds to retail strip centers and self-storage conversions, vying for a total of $600,000 in prize money.

🎤 Vali Lazarescu from Group RMC pitched a ground lease fund targeting a 21.3% IRR and 3.86x equity multiple over seven years, with 12%–14% cash-on-cash returns. The fund invests in institutional quality ground leases, often providing both the ground lease and mortgage financing.

🎤 Vanessa Peters and Maurice Johnson from Rockstar Capital pitched a private lending fund providing due diligence/pursuits costs capital to their partner BRD Land & Investment, which does land entitlement. They target 25%–30% annual interest rates and a 60/40 profit split to LPs, with a 10% preferred return.

🎤 Zach Alms from 507 Capital pitched a retail strip center fund targeting a 12%–18% IRR and 1.8–2.0x equity multiple. They are raising $10 million to acquire 6–10 strip malls across the Midwest, with in-place cash flow from credit tenants. The fund has a 6%–7.5% preferred return based on investment size.

🎤 Clint Harris from Nomad Capital pitched a $10 million self-storage conversion fund targeting a 19%–22% IRR and 3.2–3.6x equity multiple over 10 years. They acquire vacant big box retail at a low-cost basis and convert to climate-controlled self-storage. A cash-out refinance is targeted in years 4–5.

🏆 The Winners: The judges selected Vali Lazarescu with Group RMC as the first-place winner, receiving the $400,000 investment prize. Zach Alms with 507 Capital won the second-place prize of $200,000.

🏆 REFERRAL PROGRAM
ENTER TO WIN AN EMAIL TAKEOVER & MORE!

Want to promote your business to the Best Ever audience? Here’s your chance! This month, by referring new subscribers to the Best Ever newsletter, you can earn a chance to win a branded blog post on our website, a dedicated branded email, or even be a guest host on the Best Ever Show!*

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Have a Best Ever day!

—Joe Fairless