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  • Brian Malliet

iREOC Virtual Summit 2020 Discussions Tackle Business During COVID

I was pleased to lead some great discussions with industry leaders at the IREI Summit - Real Estate Operating Company (REOC) for 2020 held at the end of October. Keeping with the spirit of 2020 and COVID-19, we held the roundtable discussion virtually via Zoom, which itself is a sign of how technology is changing the way we do business in real estate! Big ideas came out of the conference which was attended by 100 investors, managers, and operators about the future for real estate operating companies and joint ventures.

The first group discussion revolved heavily around one of the topics on everyone’s minds these days - doing business through the unexpected changes brought on by COVID-19. We touched on big themes like how COVID is reshaping the economy and what 2021 might look like going forward.

For instance, COVID has brought about some significant deal structure changes in investment strategy, such as:

  1. Entity level investors seeding new joint ventures or separate accounts with a portfolio of assets;

  2. Selecting smaller select funds with existing REOC managers focused on their specific niche; and

  3. Looking at operating platform companies and how the current market conditions with COVID may open unique and profitable opportunities regarding their execution abilities.

While other parts of real estate have been hit hard by COVID, industrial and multi-family real estate, fortunately, has been resilient to the changes. This resiliency comes largely thanks to the e-commerce industry, explosion of 3D manufacturing and innovations in areas like chip storage, sensors, and AI, BI, and driverless technologies, which was already growing exponentially pre-COVID.

During the course of the two days, we also addressed investing deals in a “COVID World” and what the general challenges were during the early stages of the pandemic on both the investor side and the operators' sides of the business. One of the main challenges from the investor side was future uncertainty and how to safeguard against any new potential risks from COVID.

Turning to joint ventures, we looked further into the characteristics and type of structures that currently have the least amount of perceived risk. As mentioned earlier, entity and property /portfolio level investments have had a strong appeal, particularly with REOCs who focus on the industrial and multi-family strategies of the real estate industry.

At the end of the two-day program, I walked away feeling a renewed sense of optimism and accomplishment in our industrial focused market area and our concentrated accommodations for our employees and most important their families during this time of uncertainty. And I was energized to bring the event’s insights back to my leadership team and our tenants.


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