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Every Friday, join us as we dive into the latest in real estate multifamily with David Moghavem, Head of East Coast Acquisitions at Trion Properties. David invites top experts who know the ins, outs, and trends shaping the real estate multifamily market across the nation!
Whether you’re a seasoned investor or just curious about where the next big opportunity might be, Deal Flow Friday brings you the weekly inside scoop on what’s hot, what’s not, and what to watch for in today’s ever-evolving real estate scene.
David Moghavem (02:02)
All right, everyone, welcome to another episode of Dealful Friday. I'm your host, David Mogavum. And this week we got good friend, Greg Rolman. Greg, how you doing, man?
Greg Rollman (02:13)
good. David, thank you for having me. I'm excited to be on this podcast with you.
David Moghavem (02:18)
Greg, I mean, I think you're making your rounds. I think when I reached out, I saw you on BizNow. So it looks like you're on a marketing tour right now, crushing it on panels, virtual. I could find you anywhere at this point.
Greg Rollman (02:34)
That's the nature of the real estate business, right? You gotta put yourself out there. Well, I don't need to tell you that. You obviously started the podcast. So I'm preaching to the choir. Yeah.
David Moghavem (02:39)
For sure. Yeah, I took that a little bit extreme with the
podcast, but you know what? It's been a good time. It's a good excuse to talk to smart minds like yourself. So, you know, any excuse is a good excuse. Yeah. How was, Biznow, by the way, did you get any like good insight, any unique perspectives? What really stood out from that conference that you took away from it?
Greg Rollman (02:52)
And I appreciate the flattery.
yeah, mean it's, you know, like the panel that I was on was with some...
investors who have a much more institutional platform. I think they're with Heitman and with principal insurance. So, know, different perspective. They're more capital allocators versus us being a kind of a smaller, more nimble private equity fund. But yeah, at the end of the day, know, especially investors like Heitman and principal where they do a lot of debt, their perspective is important in the market and, you know, they're spending time in multifamily
data centers, kind of where you'd expect right now in the market.
David Moghavem (03:46)
Yeah, that's true. The data center has been very hot on the institutional space. I think that's why you're kind of seeing even some of this yield start to expand a little bit in the multi-space because some of that capital's elsewhere right now, whether it's in more risk averse options or maybe a little bit more risk tolerant like a data center. So it's we're definitely seeing that. Let me let me first introduce you, Greg. For those of you who don't know Greg, Greg Rollman's the managing
director of acquisitions at Triperion Holdings. He's responsible for sourcing, executing, invest in opportunities across the firm's real estate equity and credit strategies. He brings nearly 15 years of real estate and finance experience, previously served as vice president of investments at CIM Group. In that role, he focused on West Coast markets and led originations across multiple investment strategies and asset types.
So Greg, good to have you on and feel free to give a little bit of a background too, if I missed anything on Triperion.
Greg Rollman (04:48)
Yeah, I think that covered it on me personally. Yeah, I've been at Triperion for two years now. background on Triperion is we are a real estate private equity firm founded in 2013, investing out of our fourth closed-end fund right now. Investing kind of in that fund across geographies in the US, historically a little more.
Midwest or secondary markets focused and investing across product types but not doing development. And we have some separate accounts. also doing some stretch senior bridge lending so hopefully can provide kind of a little bit of an equity and debt investor perspective here.
David Moghavem (05:28)
Yeah, you guys cover the whole stack, it seems like. I guess right now, are you guys being most successful on the range of the stack?
Greg Rollman (05:36)
Yeah, you know, it depends again on the bucket of capital that we're investing out of. So I'd say on the equity side, we are actually pretty bullish on office and on regional malls. yeah, I know that's, I realize that's contrarian. I think in part, especially on the office side, it's maybe a little...
David Moghavem (05:51)
Wow. Sounds contrarian, no?
Greg Rollman (06:00)
Like that, even though that is contrarian, that really is kind of going back to our roots. Triperion historically has probably invested the most in office, not necessarily the majority of the capital has been in office, but that's probably been the single asset class where Triperion has invested the most. And it's also in my career personally at CIM, I also did a lot of office investment.
Jonathan, our VP, I know that you know, he also was at Related and did a lot of office investment there as well, of course. So this is something where, even if it's part of the market that seemingly is a little less loved right now, although I can kind of expand on that a little bit later, it's something where we feel like we have a relative competitive advantage.
David Moghavem (06:45)
Yeah. And let's, let's get into the weeds there on, on, know, this asset class that's not love quote unquote. I think what you're finding is after COVID there's a new era of office where before COVID whenever you would have an employer move to a major MSA, you said, okay, major employer move, they need office space. I feel like post COVID that correlation is somewhat
disconnected, maybe not entirely, but it just doesn't have the same correlation that it used to have. Talk to me a little bit about from your history being in the office space, how was that correlation and that bridge before COVID and how are you seeing it now? And what maybe is your North Star today in a post pandemic environment that allows you to understand macro fundamentals in investing in an office space?
Greg Rollman (07:44)
Yeah, so I think you make a good point where a lot of the really big block users taking down hundreds of thousands of square feet that has probably eased up during COVID. And I think we've seen a lot of that. Just looking around LA, for example, where a lot of the users who are taking many floors in downtown LA office, for example, like people like that, they are tending to
see their space needs contracting because they had a lot of back office type uses, people in accounting or people who were doing the sort of jobs that are a little easier to do remotely. So that's caused a lot of those kind of office buildings to see demand decrease a little bit. So I think to take maybe a step back on office, we I think are looking at office in kind of
three general buckets. So you have the real class A office, you you can't see directly behind me, but that would be Century City. Like that's a market that's continuing to do great. You know, think rents still all time highs, occupancy very high. And those buildings aren't trading, but if they were, I think they'd be trading for low cap rates. They'd also be able to get great financing. You also then have like the
suburban generic buildings that are not pedestrian to anything. Those buildings have been hit really hard because there are a lot of competitors for all those in the market. know, Phoenix office, the call center office, that kind of thing has really been hit very hard. But where we are trying to spend time right now and where we've closed the deal recently is focused on
suburban office but in the best locations where you are proximate to executive housing and where your office is pedestrian to amenities. So there's a real reason to be in the office. And we're not necessarily investing in like a shiny brand new building. We don't think that's completely necessary. As long as you have a functional building and where you can do a, you know, a substantial amenity package, that really I think checks all the boxes for
David Moghavem (09:41)
Mm-hmm.
Greg Rollman (09:57)
So that's the portfolio that we just invested in in Indianapolis in November that really fits that mold. And today I've had a couple of calls looking at other office buildings across the US that kind of fit with that profile. So that's where we're spending time. it's something where I think right now that thesis still hasn't completely been priced in. So as I said, the Class A
product, that's trending at really low cap rates. But I think that the suburban
David Moghavem (10:27)
What
kind of, sorry to you off, what kind of caparates would you say is like a Century City today?
Greg Rollman (10:33)
I mean, with the caveat that that stuff isn't really trading, I guess it's probably like a six cap, I would think, something like that. And maybe one way to kind of also just think generally about real estate to kind of wax a little philosophical here and go on a sidebar is a lot of it's really driven by the debt markets, right?
David Moghavem (10:36)
True, yeah, maybe not that many data points.
Greg Rollman (10:55)
I think there's always interest on the equity side, usually for deals, but it really matters when you're thinking about values, I think, is where your debt financing is coming from. And if you were going to try to finance building in Century City, you'd be able to get great long-term fixed rate financing at a pretty cheap spread over treasuries. But for what we're looking at in suburban areas, even if we think it's a really good...
investment, it's hard to get the same kind of financing on it. So I think that has really driven cap rates into the double digits.
David Moghavem (11:29)
Sure. you know, like going to the multi-side, though safe haven from the debt perspective has always been the agencies, right? No matter where the debt markets are, there's always liquidity with the agencies. And that's why trades at such a cap rate in general. So to your point, it is driven by the debt and borrowing costs. So what kind of debt are you putting on the Indianapolis deal?
Greg Rollman (11:45)
Exactly. Yeah.
David Moghavem (11:55)
And what part of the stack are you guys entering in? you common equity, pref equity, hybrid?
Greg Rollman (12:03)
Yeah, so on that deal, we put a five-year floating rate debt from a debt fund. And I think that was about 55 % leverage. Relatively expensive in the scheme of things, certainly a lot more expensive than your agency debt. And for that, we're in kind of a co-GP spot, but also providing a lot of the LP equity.
David Moghavem (12:19)
Mm-hmm.
Greg Rollman (12:26)
The way that we think about that is on the office side, we'd really much rather be on the common equity side because we think that even though it's like we believe in the thesis, obviously it hasn't totally played out. There's still some level of risk. And if it's something that's going to have kind of a binary outcome, we think it makes more sense for us to be in the equity seat where there'd be a lot of upside and still potentially a lot of downside if it doesn't pan out.
versus being on the debt side where you have capped upside but still all the downside. for something in a more like a on multifamily side, we've been doing a lot of preferred equity because as you said, it's kind of a more liquid market. We think the downside's a little more capped or at least mitigated. So for that, we'd rather do something that's in kind of a subordinated equity position.
David Moghavem (13:16)
Sure, a subordinate to the debt. Yeah, that makes sense. I think you're seeing a lot of the institutional players even having a similar strategy where they are coming in in the prefect equity position rather than investing as common in order to kind of protect their downside in a time of uncertainty.
Greg Rollman (13:34)
Yeah. And I think to talk our book a little bit, our focus on prefect equity right now on the multifamily side is really slotting into that kind of six to $15 million dollar prefect equity check because that's where we think is really the sweet spot in terms of getting enough scale to get the economics to make sense, but while also having a still reasonably attractive coupon.
What we've noticed is that once you get to the kind of $20 million in a pref, then the rates just compress to like 12 % with almost no fees. And then you're getting, you know, 13 IRR. And we're targeting more like a 15 to 17 IRR on our, on our pref, which we think is pretty attractive.
David Moghavem (14:09)
Mm-hmm.
cheaper cost of capital and that part of it. Yeah.
Sure, mean, I think with where, at least on the multi-side where fundamentals are on some of the value-add space, it's hard to come by a IRR that's higher than that on a common equity side. So to get that on prep equity where you're in a safer position theoretically makes a lot more sense.
Greg Rollman (14:45)
Yeah, exactly.
David Moghavem (14:46)
So it sounds like, you know, in office you guys are playing in the co-GP common side, multifamily, you've kind of found a little bit of a part of the stack in pref equity. What other asset classes are you guys playing in and which assets classes are you guys most bullish on right now?
Greg Rollman (15:06)
So I'd say we continue to be bullish on retail. We invested in some...
I guess you'd call it like shadow power anchored centers where we think that the cap rates are still pretty decently high there. I think the cap rates on power center, if you're not getting like the credit anchor leases is something in the seven and a half range or so right now. So that's still pretty attractive for us. know, we, grocery anchored is too, a little too thin in my opinion right now. And then,
David Moghavem (15:35)
Mm-hmm.
Greg Rollman (15:36)
kind of the little bit of the wild card is that we're doing some mall investing. So, yeah.
David Moghavem (15:41)
Yes, let's talk about that a little
bit, right? Again, coming with the contrarian play, I would love to hear your investment philosophy on that.
Greg Rollman (15:49)
So basically what interests us in the regional mall play is that right now the market cap rate for B malls is something in the mid teens. So yeah, which again, as I mentioned earlier, the reason why is because it's hard to get good debt on those. You do see a lot of debt in the market for the A malls, I think.
David Moghavem (16:00)
Wow, that's amazing. Wow, okay.
Mm-hmm.
Greg Rollman (16:15)
Simon just had some billion dollar CMBS deal that I saw. But, you know, that's again, those are for the A mall. So on the B mall side, yeah, it's like a 15 cap. And that's really something where to invest in that kind of property, you really have to kind of dive under the hood and make sure that the fundamentals make sense. And we think that on the mall side that there are assets that
are going to be evergreen and assets where it's going to be more of a melting ice cube. So the things that we're looking for on the mall front are basically assets where they're kind of the only game in town. You know, it's tough if you're like the fourth mall in a market, like why would people go to you versus the three better ones? Assets where they've actually been, you know, relatively stable or even growing NOI versus
2019, assets where you've had the sales per square foot for the tenants remain stable or growing, and where they're also at a level of, generally the rule of thumb is like $400 a foot for the inline sales to be at a level where it makes sense for the tenants to be able to have a profitable store on average. And then also where their health ratio,
which is basically the calculation of the total cost of occupancy divided by their sales is an attractive level of around 10 or 11%. So if you can kind of check all those boxes and then also have anchor tenants that are going to be performing reasonably well and you're not worried about issues from your Macy's or JCPenney or whoever leaving.
and then causing issues with co-tenancy. And then, of course, also making sure you have reasonable deferred maintenance assumptions in there. There's obviously a lot of things you have to look at, which is frankly the case in any real estate asset. But I think if you can check all those boxes, then you can potentially buy an asset where our view is that if it's historically been stable and we feel good that
the future prospects are also going to be stable and we're not going to have any capex surprises and we're potentially by being a new owner who's at a more attractive basis than potentially the previous owner, we can be more aggressive about leasing and marketing and spending money that that will position us to be able to continue to do well if the cap rates stay the same.
It's not the end of the world to own something at a 15 cap for the foreseeable future, but hopefully that will be able to prove out to the market that the asset's continuing to perform well and we'll have some cap rate compression.
David Moghavem (18:58)
guess a few things to unpack that one is, are you guys exploring any alternative scenarios for like a mall, for instance, where, you know, a lot of people are looking at, malls, they're functionally obsolete. We might need a pivot into converting that to housing or to office or, you know, you've heard, you've heard some of these ideas. Do you guys?
Greg Rollman (19:10)
Yeah.
Yeah.
David Moghavem (19:22)
look into that or are you really just honing in on in-place operations making sure and just you doubling down on the asset itself?
Greg Rollman (19:32)
So the repositioning play is certainly something that other people have done well, but that isn't something that we are trying to do right now. We're really just focused on buying malls as malls. Similarly on the office side, we're not trying to do office to multi conversions. Those make sense if you have the right basis and the right market, but that's not what we do and we're not trying to do everything well. We're trying to do
the things that we can do well, do those well. So we're just focused on malls as malls. Maybe they have some potential upside from selling land parcels, that's great, but yeah, we're not gonna go into it with the business model of blowing up the REA.
David Moghavem (20:06)
Yeah, no, and
And is the hold period longer term where you're comfortable with the cashflow, like kind of what you were just saying with the mall 15 % cap rate is an end of the world if you could just keep operating there. Or are you looking at something that in a five to seven year horizon, you can come out with an exit that will make this yield a little bit of a better return than what it's cash flowing at?
Greg Rollman (20:50)
I mean, our underwriting is not to hold it forever. It is to sell it in the medium term. yeah, I think our thought though is that basically we'd be okay if we basically got out at similar to our going and cap rate if we can maintain operations. I mean, if you had no NOI growth, you'd
and you buy something at a 15 cap, and you sell it at a 15 cap, you'd have some transaction costs, theoretically, and you'd have some leasing costs or whatever, but theoretically you're getting a mid-teens IRR on that, So hopefully we can push on the operations, and while that means you'll have to spend a little bit of money, we still think on these deals that are...
David Moghavem (21:23)
Sure, yeah.
Greg Rollman (21:32)
like stabilized cap is still in the mid teens, even after spending money on deferred maintenance and tenant improvements and whatnot. you know, we're not trying to invest with the thesis of like we have to get back to where cap rates on malls were in, don't know, 2015 before the retail apocalypse or whatever you call that in 2016. You know, I mean, that'd be great, but
that's not necessary for us to do well with our business plan.
David Moghavem (22:03)
Yeah, you had a really good thesis with Office how you were targeting areas that had walkability but were also suburban in, I would say, affluent areas or areas where there's higher demos. What's your thesis on retail? Is it also suburban-based retail as well or is it a
Is there synergies? I guess I'm trying to ask is there synergies between your thesis with office and retail or are they different strategies altogether?
Greg Rollman (22:40)
I'd say there is some level of similarity. don't know if there's like a, it's not necessarily synergistic where we would be doing both. But yeah, I mean at the end of the day though, we're very focused on making sure that the surrounding area is able to support whatever project we're working on. You know, that's something where.
David Moghavem (22:58)
Mm-hmm.
Greg Rollman (23:02)
As you know, when you're buying an apartment building, when we're investing in apartments, it's not like you just fly in to where the building is and you leave. You have to walk around the area, to where the comps, see what the dynamic of the sub-market is. So I think that's really a thing that we focus on for all of our deals.
maybe that leads us to invest more in suburban areas just based on what's going on in the market generally where a lot of downtowns or urban areas have been more challenged. So yeah, I'd say maybe it's just because we have sort of a similar philosophy. We're not necessarily trying to create a suburban REIT though or something like that.
David Moghavem (23:45)
Right, right.
No, it's interesting. think I think I was, you know, it really segues into geographic preference, right? And sometimes when you have an area that kind of fits the bill with office, it could potentially fit the bill too with with malls and retail and some other asset classes. So I guess, do you guys have like a geographic preference where
you're looking at it from both asset classes that it's like, okay, this is where we want to invest and we're long on this area.
Greg Rollman (24:15)
I'd say that for our firm, just given that we're a relatively smaller investor, we're not necessarily going out there and saying that we love...
some sub market and we're gonna do like five deals in that sub market. It's usually more like someone is bringing us a deal, you generally like a sponsor or something like that and then we'll really dig in in the sub market. We've been doing this for a while so I think we have kind of a view on basically the sub markets of all the major MSAs. But it does mean that
Like for example, if we're going to talk about the office deal we did, we've historically done a couple office deals in the northern part of Indianapolis, specifically in Carnal. And that's really like the best sub-market in Indianapolis. This office property that we purchased is in the Keystone sub-market, which is adjacent to that.
So it was something where because we had spent a lot of time in area, like we knew the brokers, we were able to get a little more aggressive with our bidding just because we had very high confidence in our ability to execute because we had executed previously in the nearby area. So I'd say like it certainly helps for us to be doing deals in the same area, but.
At the end of the day, we're open to looking at deals in new areas and getting smart on them, just because that's sort of like in our DNA and what we've been spending time on historically, where we're flying to new areas, flying to new markets, trying to understand the dynamics there.
David Moghavem (25:48)
Yeah,
I I think that's like the best part of the job, right? Is going to these areas, taking the air in, talking to the local Uber driver, talking to the local barista, understanding where, you know, what the sentiment is of the area, what it was before, what the good streets are, the bad streets are. That's the fun of it, right? And I think...
Greg Rollman (25:51)
Yeah.
Yeah, exactly.
Yeah. Yeah. mean.
David Moghavem (26:15)
Putting the pieces together is what it's all about, end of the day.
Greg Rollman (26:20)
Exactly. That's where it's interesting where you read about the use of AI in real estate and for underwriting. To sort of go on a tangent about that. That's the kind of thing where, to your point, it's important to really like...
spend a lot of time in the area where you're doing a deal and you can't just necessarily do it by going on CoStar and pulling the market report in some couple square mile area. That applies to your property. It's really about going there and understanding the micro location and what are the reasons why someone's going to be leasing or investing in your property versus a neighboring property.
David Moghavem (26:46)
Yeah.
Greg Rollman (26:57)
And you know that from the multifamily side. That's just, again, like the office deal that we invest in. If you look on Coastar, we're in a larger sub market and I think some of the other buildings in the sub market are more challenged. if you look at a sub market stat as a whole, you might be a little less bullish. if you actually tour those other properties like we did, you see that those are properties that
isolated. If you want to go get a drink during work, you know, you've got to get in your car. Whereas our property is walking distance from the best mall in Indianapolis and tons of F &B options. you know, it's just kind of the kind of thing that you can't really, I mean, you can sort of figure it out from like looking on Google Maps, but not exactly.
David Moghavem (27:47)
Yeah, I
had this exact conversation with an investor yesterday on a deal we're working on where when you pulled the sub market on CoStar, the rent growth looked a little bit muted and they're like, you know, the rent growth looks pretty pretty sluggish here. What's what's the story? Is there a story? And when you take a step back and yes, you can actually pull these things online, but you wouldn't really know unless you actually spoke to people.
on the ground and that's where it saves you a lot of time believe it or not is our property is in a sub is in a micro pocket where it's harder to build. There's it's higher demos. It's a little bit more affluent and further north has a little has a lot more supply hitting it and is a different renter profile. And again there's ways that you can justify and like understand and support through.
Greg Rollman (28:18)
Yeah.
David Moghavem (28:44)
the resources that you're pulling, but you wouldn't know unless you're talking to someone and breathing air and say, this makes more sense. When you drive these spaces, this makes more sense. The aha movement comes when you're on the ground and talking to people.
Greg Rollman (28:55)
Yeah.
Exactly.
David Moghavem (28:59)
the future outlook, it's a little bit murky, right? We're gone through a lot and things felt like it would be a little bit more promising potentially with a new administration. But what we're seeing is still a lot of volatility, a lot of macro uncertainty. What's...
your personal and also Triperion's take on the future outlook in the space you're playing in right now.
Greg Rollman (29:26)
Yeah, I think that, you know, I'm not gonna go out there and say that we are have a more accurate or better view of the future than any other group. what I think that that means for us and really for any investor, unless you're gonna be a really big allocator, is just the need to remain focused on kind of the nuts and bolts of investing and ultimately making sure that your deals have
you know, the margin of safety that's needed, right? So even if the markets move, that we're in a position where because our sort of pro forma stabilized return on cost is a big enough spread to market, even if cap rates increase, we'll still be okay. And making sure that our deals are appropriately capitalized. So even though we are providing subordinated, you know, debt or prefect equity, we're generally not.
borrowing with that. And we're also making sure that, you know, we're doing these office deals, these small deals, these are all five-year debt executions that are fixed rate, right? Or at least have, you know, like some kind of cap or something where we're not going to have some kind of near-term issues that are, you know, while we're trying to execute our business plan and will give us enough time to wait out any market volatility.
So that's, you know, I don't think that we're necessarily doing anything differently this year. I mean, it's kind of the same way that we've always been investing and continue to be focused on just being conservative and reasonable and, you know, not pushing too hard on any specific metric, right?
David Moghavem (31:03)
Yeah, I think we're having a similar approach where we're solving still to the mid-teens return, but that mid-teens return has a lot more conservatism baked in, right? Where you're not stretching on any metric in particular, you're pounding the underwriting in ways that you're stress testing it, that even if that happens, you still feel good with the deal. You're leaning in more on
in place economics, similar to what you were just saying about the mall investment where we don't need a bank on future outlook being better. If a deal works with in place metrics today, we'll be okay with it and cash flow, worst case scenario and best case scenario, you get appreciation. So I think we're kind of looking at it the same way and staying disciplined and kind of seeing through the smoke and mirrors in order to
Greg Rollman (31:54)
Yeah.
David Moghavem (32:01)
Pick our spots.
Greg Rollman (32:03)
Yeah, and I think even if you're doing what you're doing on the multifamily side, even though there's volatility in the market, I think it's important that you still have the agency's lending at, I think, pretty attractive rates. I saw an article.
last couple weeks about how, I think it was Freddie, is continuing to tighten spread. you know, don't quote me on it. I think agency all in rates are probably in the mid to high fives right now. So, you know, I mean, as long as you're not...
David Moghavem (32:31)
Sure, yep. Potentially tighter if
it's mission driven, but yeah.
Greg Rollman (32:36)
Yeah, that's true. So, yes, I think for someone like you, where you're doing value-add retail, if you can feel really confident about your execution of your business plan.
It can still make sense to invest today because even if you're uncertain about things like rent growth, you're not buying like a 2021 vintage deal at a fork cap because you're going to have some crazy rent growth. It'll be okay because you'll be probably going in at a cap rate that's similar or higher to your debt interest rate. And they'll have a nice debt yield there and you'll have a good margin of safety.
David Moghavem (33:07)
Exactly. think the basis all looks great on paper relative to peak values and well below replacement costs. So you're good there. Your yield is at or above where your borrowing costs are. So accretive financing, positive leverage going in and cash flowing. Sure, it might be similar to what something that's more liquid like a CD could yield.
but the idea is that you're going to get appreciation. get, depreciation too, and tax sheltering. And so that gets taxed more tax advantage instrument for cashflow. so I think, I think the three to five year outlook on multi is pretty strong right now.
Greg Rollman (33:39)
Yeah.
Yeah,
and I think that the other thing on the multi-side too is...
Probably the biggest source of uncertainty right now in the markets is around tariffs. And probably the most direct impact on real estate for tariffs is going to be around things like construction costs. So if you're doing value-add multifamily, I guess that leads to some level of uncertainty for renovation costs. Hopefully for, if you're a group that's done a lot of it, you should hopefully have a relatively well-oiled machine.
Even though you have that negative, think the big positive would be a reduction in new supply if you just have continuing issues around construction costs. Since to your point, I'm seeing in Texas people selling deals in lease up that were recently delivered for meaningfully below replacement cost.
David Moghavem (34:43)
Yeah, I heard at a conference last
week, I spoke at that Houston lease up deals, 140, 130, 140 a dollar. I shocked. And it goes back to your point too. Before the tariffs, was high capital, cost of capital with borrowing costs. You still had higher construction costs just from the supply chain issues. And then now with the tariffs, it's almost like the nail in the coffin with supply. What does that mean? I think with multifamily, that means
Greg Rollman (35:06)
Yeah.
David Moghavem (35:11)
a really strong 2026, summer of 2026. I think you're starting to see positive tradeouts now in 2025. And this is kind of the calm before the uptick of the cycle. And everyone knows this is a cyclical market. And I think these patterns that you're seeing with muted construction forward looking is a recipe for success for future rent growth.
heading into second half of 2025 and 2026.
Greg Rollman (35:45)
Yeah, I think on some of those properties in Texas, the challenge is that you still have a lot of absorption to work through. So as long as you're capitalized in a way where you can deal with some softness for like two years, think you'll eventually be in a good place. But you have to be able to ride it out for a bit while things still absorb.
David Moghavem (35:53)
Mm-hmm.
Yeah, you and every sub market is kind of different, right? You have Austin, which is like the poster child of going to be the last one to recover. And people are still even playing in that space and being extra contrarian buying in there and saying, I see this long term. I see the pain and the blood on the streets, but I'm willing to place a bet today and just ride it out for as long as I can.
And then there's some other markets where you've had that glut of supply, but you're seeing that it's getting absorbed really well. The inbound migration is helping take that supply on and then supply is falling off a cliff. So it only makes the story even better from a value add multifamily perspective.
Greg Rollman (36:53)
Yeah, yeah, I agree.
David Moghavem (36:54)
So Greg, mean, you you've been on all these panels and on online, I'm sure everyone's trying to get ahold of you. What's the best way for people to reach out and get ahold of you and connect with you?
Greg Rollman (37:08)
Well, please send me an email at grollman at triperium.com.
Always happy to look at new opportunities and just to reiterate what I was touching on at the beginning of the podcast. We're a prefect equity, co-GP equity, some LP equity, targeting seven to 20 million ish dollar check sizes across the US and all asset classes except development. And then we also have an account that's doing stretch senior bridge loans targeting 10 to 50 million dollar
loan size with usually about two year term, kind of more transitional business plans usually. So we're, you know, like to think that we're kind of opportunistic, creative, flexible, so appreciate any inbounds.
David Moghavem (37:51)
Awesome. And Greg's email will be in the show notes. Thanks everyone for listening and hopping on. Happy Friday and we'll talk to you next week.
Greg Rollman (38:00)
Thanks so much David for having me.
David Moghavem (38:02)
Thanks.