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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 (01:06)
All right, welcome to another episode of Deal Flow Friday. I'm your host, David Mogavam. Today we have Henry Manucheri, the CEO and chairman of Universe Holdings. Henry. Hi, David. Really good to have you. I was actually at a brisk today and they named their son Henry as well. Why? Daniel, which is also his father's name. Henry's a great name. It's timeless.
Henry Manoucheri (01:17)
Thank you.
What's the super name? ⁓
That was my name at birth,
David Moghavem (01:36)
It was? Did you have a Farsi name or that was your name?
Henry Manoucheri (01:39)
No, was always Henry. Heavy, habeas, menace, shit, but it's...
David Moghavem (01:42)
Yeah, it's a beautiful name and it's actually I was looking at the release schedule and how we set this podcast up ⁓ on Friday. It's going to be Nowruz when we release this.
Henry Manoucheri (01:56)
Wow, I didn't know that. So we're getting close to Pesach, Passover, then Norwes is on the court. For people I know, it's like a God-given gift.
David Moghavem (02:01)
It's spring. Exactly,
exactly. Hopefully ⁓ this Nowruz will bring freedom to the people of Iran as well. It's incredible what's happening. Hopefully leads to peace in the Middle East as well.
Henry Manoucheri (02:20)
It's only taken 47 years, I can't wait for this one.
David Moghavem (02:22)
Yeah,
no matter how you feel about what's going on, it's important to know that there's people being freed from a tough regime and yourself coming from Iran and immigrating here, my parents as well, our community. ⁓ But when we did immigrate here, as you know, so many people have been so successful in the CRE industry. I was actually thinking maybe even
Henry Manoucheri (02:46)
Yes.
David Moghavem (02:48)
having like a segment, Dealflow Friday segment during, you know, Norooz to celebrate some of the Persian CRE professionals like yourself.
Henry Manoucheri (02:57)
Sure. I think for ⁓ Iranians, particularly Persian Jews and even Persian Muslims or other sects, ⁓ moving to the United States was probably the best thing that ever happened to them because they're all so smart, so prosperous, and such great people, so intelligent. And ⁓ we have friends across the spectrum of Iranian people around the country and abroad. And ⁓ truly, there's...
People are so happy with what's going on right now. Hopefully this will topple the regime. This is probably the most tyrannic, cruel, gangster, worse than Nazis, or Nazis of the modern times right now, of what they've done to people for 47 years. mean, the scores of hundreds of thousands of people, probably millions of people have died.
David Moghavem (03:51)
There's such a sophisticated group of people that you see in America have flourished so much. It's almost unlocking that, untapping that potential is exciting too.
Henry Manoucheri (04:03)
Yeah, it's been great for me. I said, the Iranians, by many accounts, are probably the most prosperous, the most successful group of immigrants that ever moved to America in a span of 47 years, what they were to accomplish here. It's mind-boggling.
David Moghavem (04:19)
And we have the honor of having one of those yourself. ⁓ Henry, really good to have you on. Just for those of you who don't know, Henry, CEO and chairman of Universe Holdings, they're a very successful multifamily investment firm focused on acquiring and repositioning apartment communities, mainly in California, but you guys have expanded geographically. Florida, New Jersey, you were just mentioning, even in Israel, maybe even Iran one day. ⁓
Henry Manoucheri (04:22)
Thank you.
talking about in the office, it or not.
David Moghavem (04:51)
My grandparents, my grandpa still has the deeds to some of his properties that they couldn't.
Henry Manoucheri (04:56)
I wish we had some of our deeds, we probably have still property left. sure the family has things, and I can't wait to go back and see this. I left when I was 15. It's still very fresh in my mind. Only I just have great memories.
David Moghavem (05:11)
Part of Iran, did you grow up Tehran? Yeah. Yeah. I would love to go back and see. Born and raised here. Yeah. Born and raised in LA. Of course. Yeah. First generation. And I think we have an appreciation. A lot of my friends are all first generation. We have an appreciation for the immigrants that came here and worked hard to put ourselves in the position that we're in to build on top of it and standing on
Henry Manoucheri (05:17)
You never, you were born in Asia though.
my sons and daughters.
First generation
David Moghavem (05:41)
the shoulders of giants in that regard. ⁓
Henry Manoucheri (05:43)
know
many of your family members. Yeah. Many, many of them over the years.
David Moghavem (05:48)
We're slowly taking over the real estate industry too.
Henry Manoucheri (05:54)
You guys got a lot of octopus arms of cousins.
David Moghavem (06:00)
Yes,
exactly. And we're multiplying.
Henry Manoucheri (06:02)
I some of your family members are early pioneers that were here in the early 70s. ⁓
David Moghavem (06:07)
Yeah, a little bit. ⁓ Not my side, but there were some of that. And they weren't really in real estate, though. They were in other trades. And I feel like our generation is now really getting in to real estate. ⁓ So it's been a good journey. Well, Henry, let's talk about yourself. One of the things I'd like to bring up, you've been in the industry for over four decades. ⁓ And you've navigated multiple cycles.
How does this cycle feel compared to some of the others you went through?
Henry Manoucheri (06:43)
I've been through probably, let's see, 1980s, 18 % interest rates, the RTC crash, 1993, 1994. Then we did a great financial crisis, GFC, that was 2008, 9, 10. And the dot-com crash in the year 2000. Before that, there was some impact there. And we didn't have any down cycle since then. This has been it.
David Moghavem (07:10)
It's been a ball run since GFC.
Henry Manoucheri (07:12)
I think this one has been quite bizarre in nature because of so much uncertainty. I've never seen the last three years. It's getting better now. It's getting better every day. So many people on the sidelines. But the sudden rise in interest rates after nearly 15 years of low interest rates, at least in 08, 09, prices came down so much, unlike now, where everybody wanted to buy and you had low rates. You could borrow at 4%, 4.5%.
comfortably across the board. We did a ton of refis back in 2011-12, a few hundred million dollars worth of refis and just so benefiting from that today. But this time around, for the last three years, the rates haven't really come down. We had a bit of a dip about a month ago, know, was off rate cuts, but the 10 year has been very, very sticky. been, it was like, it's like today, as we sit here, it's 4.2.
David Moghavem (08:04)
Very sticky.
Henry Manoucheri (08:09)
It passed a few days because of the war with Iran and Middle East. climbed to 4.3 as a result of inflation. But I think COVID really coupled this whole model upside down because so much money got released into the system, nearly $8, $9, $10 trillion of capital.
David Moghavem (08:27)
read today how Trump ⁓ announced how they are gonna buy 200 billion worth of bonds and I was thinking and to try to get home mortgage rates lower and our industry benefits from that I looked at the 10-year and it didn't flinch so it's interesting it's a very sticky metric that the markets are speaking and we'll see we'll see as much as
Henry Manoucheri (08:34)
He's been talking about that.
This
has been one thing we haven't been figure out, just how stubborn the tenure has been despite rate cuts. I think it's a combination of inflation, too much money in the system, and AI has had a phenomenal impact on valuations in the stock market. That's been another driving factor. But the market perceives risk because of rising oil prices. back to the market the last three years, a lot of uncertainty ⁓ pushed many private equity firms on the sidelines.
Many of them became and still are private, preferred equity providers. They said they're going to do deals on a common equity stack. Not much of that happens. It's just coming back. It's come back nicely in the past three, four months. So maybe it's a sign that things are opening up. But in order for us to get rock and rolling again, like the go-go days, this 10-year has got to go below four. Yeah. Yeah.
David Moghavem (09:46)
And I guess going back to this cycle versus other cycles, is your investment approach been different in this regard? ⁓ GFC, there was definitely a lot more no sales, no purchases, no financing. I feel like you're seeing a little less of that. How has your strategy changed in this cycle?
Henry Manoucheri (10:06)
I think we become extra conservative. The lesson we learned from the GFC 2008 crisis was don't lever up. And the lesson learned from the last two years is don't borrow money from debt funds or go high, you know, go valuable rate debt. You're going to get stuck with rate caps. know, I've said this before, 95 % of portfolio was fixed. It remains fixed. We had exposure with
We've now reduced that exposure to two properties and ⁓ the rate caps went up 10 times in the past three years to the point where all the cash flow was getting trapped. And Fannie Freddie sitting with millions of dollars of your funds that you can't really reach, you couldn't do much with. And nobody had ever experienced this. Even the most sophisticated social investors.
did not underwrite such risks. No one knew how it really worked.
David Moghavem (11:07)
I
there was going to be an increase at some point, but they didn't think it would be this sudden.
Henry Manoucheri (11:11)
Yeah, so now it's come back down and people, when we go to refinance or make a new purchase, you go to market, we talk to mortgage bankers or brokers, you ask for quotes, they still bring you a debt fund quote. I'm like, no, no, no, thank you. We're not going there. We only borrowed money one time from a debt fund. We successfully executed and got out before COVID, top of the market, end of 2019. And then we didn't do any of this stuff later. But even 10 year...
David Moghavem (11:28)
the devil.
Henry Manoucheri (11:41)
variable fix fatty freight were staying away from that. But a lot of people are going back in there now because the rate caps, they dropped down to zero again.
David Moghavem (11:51)
you just having learned their last
Henry Manoucheri (11:52)
I
mean, we saw a red cap reserve on one of our properties go from $8,300 a month on a $41 million loan to $120,000 With agencies. $120,000 a month. Fortunately, these properties, we still own them. They were performing beautifully. They were cash flowing beautifully, so we could afford to put the money away, but you don't have any extra cash left to distribute or to do improvements with. So you had to... Right.
really watch it closely and now that's gone away. So we're backing, know, back in the cashflow zone and the idea is, hey, let's just get out of these deals, refi out, which we have done with a couple of them successfully. You we borrowed the low fives, like five, five one, five two, which is still a rate.
David Moghavem (12:35)
If you could borrow the low fives and what you're probably trying to target a yield positive leverage day one, maybe be like at a six going in or six cash on cash at least.
Henry Manoucheri (12:45)
Yeah, you could accomplish that, Southern California is still, now you can get deals that you start off at about a five cash on cash. I haven't seen anything in excess of that. Other markets, you can probably get six or seven out of the box. From day one that you buy property, if you could get it at a six gap plus. Our cap rates here now are hovering right around five and a quarter, five and a half.
Five, and I haven't seen that many below five, but five and five and a half was always normal. I think we had an abnormal period in the last 15 years and people have to get used to a new reality. going back to your question, we have also adjusted our underwriting. We look at a refi in year three or five at five and a half percent, not at five percent. We look at an exit cap rate at least a five and a half. We don't underwrite a five.
And then in LA, the exit tax, the ULA, that really changed the dynamics of buying and selling properties.
David Moghavem (13:52)
3-5 year old models just don't work when you have that back loaded.
Henry Manoucheri (13:54)
They don't work. they
don't really work. You got to have a 10-year hold or you got to really drink the kool-aid or believe that this will be repealed at some point. It's San Francisco recently went down in half, five and a half, two and a half, because it was really starting to market.
David Moghavem (14:12)
And also the mayor really pushed for
Henry Manoucheri (14:14)
The military push for that and you know we have right now
David Moghavem (14:20)
guys
buying NorCal? Do you guys buy in San Francisco at all?
Henry Manoucheri (14:22)
We haven't, we've looked a lot. We should have bought in retrospect past couple of years. We just didn't have the guts to execute. we're not sorry, we did stuff elsewhere, but the fundamentals are greater. know Essex and some really larger institutional players have bought a ton of stuff up there. And even in Southern California. We're back in LA now, we're buying. We didn't buy in the last three years, we kind of redlined it, but now we said, hey, the World Cup is coming here this year. You're to have the Olympics, 2028.
You're going to have a new mayor election. I could go either way. I'm little concerned about that, obviously.
David Moghavem (14:57)
Everyone
on the red line San Francisco and now look at where it is now. Do you think LA can go through the same trajectory?
Henry Manoucheri (15:04)
I think LA can come back. I think it's time. It's been beat up so badly. We've had 30, 35 % reduction in values and then so many people are just like, red line, no, no, no. But people are starting to say yes now. And listen, we operate in Florida, we operate in New Jersey. I think New Jersey, the fundamentals are pretty similar to here. There's barriers to entry, not as much. Florida, there's zero barriers to entry. ⁓
The concessions just don't go away. And next thing is another guy builds another 500-year-old building on the lake.
David Moghavem (15:40)
Everyone thinks the grass is greener in Florida.
Henry Manoucheri (15:42)
It's
not. It's not. a different type of risk. We operate some assets there. One of them, in Tampa, we're up about 2%. Nothing to jump up and down about, but it's great. But the supply has dwindled because of high interest rates. But we look at our portfolio nationally, the best fundamentals, like it or not, despite all the litigation that happens here with tenants, despite all the obstacles from regulation, and the rent control that we have here, they try to make it worse and worse every time.
The best fundamentals are still here. We're not doing much concessions, any. Rents haven't gone up as much, but they're still going up slightly. And because of ⁓ all these horrible, ⁓ punitive, ⁓ legislative issues of more rent control and more taxes and COVID lockdowns, the moratoriums that were draconian,
We still have tenants who have balances. It's not much, but it pales in comparison to what it was five years ago. But it just discourages so many people from building, where the barriers to entry are higher than ever before.
David Moghavem (16:56)
And now you're as an owner, you're benefiting from those barriers to entry in California. But it doesn't change the fact that you still have some of that political risk. It might be harder to collect on those high balances. What's interesting for us is throughout our own portfolio, and we have a similar size, but just in some different states, California has the lowest delinquency. Never mind the COVID balances. That's like its own issue. But if you
Henry Manoucheri (17:01)
Yes.
David Moghavem (17:24)
remove the COVID balances of people paying today, California actually has the lowest in our portfolio. We'll see, we like, we love NorCal. We're changing.
Henry Manoucheri (17:30)
You guys are gonna buy more here?
You
were always pretty pioneer up there.
David Moghavem (17:38)
We were kind of beating the drum on the Bay Area before it was a little bit more in. I wish we took a bit of a more aggressive approach. ⁓ But we always owned in the East Bay. Our thesis on the East Bay is you get the affordability. ⁓ And the city of San Francisco trades at very tight cap rates and has very strict rent control. In the East Bay, depending on the market, a little bit.
more lenient, you're just dealing with AB 1482 in some of those areas and you buy along the BART and some of these tenants are looking for affordability and they take the BART into the city. And we like that play. We always like the first ring suburbs of a primary MSA and we see the East Bay as one of those. We see Sacramento also as ⁓
Henry Manoucheri (18:29)
Sacramento has been on fire. It's a pretty good market. Also, San Diego has been great. We love San Diego. I wish there was more stuff to buy. Not enough trades there.
David Moghavem (18:36)
Exactly.
There's a clear scarcity premium with San Diego. you see a deal like that, it's great fundamentals on paper, but then a deal hits the market and you're like, a four cap for this? It's tough. It's tough. So you broke into some other markets, New Jersey, Florida. You were touching a little bit about your deal in Tampa, but how has
Henry Manoucheri (18:43)
Orange County. Exactly. Barely anything trades. ⁓
David Moghavem (19:04)
breaking into new markets been for you guys as a group.
Henry Manoucheri (19:08)
⁓ We made that decision about seven years ago. It took really two years in each market to fly there many times, make offers, go into deals, come out of deals, understand the landscape, understand rents. And then after practicing for two years, we started to execute. We got comfortable with it. And then ⁓ for us, because we are vertically integrated, everything is in-house. are very hands-on.
family office, institutional slash syndicator type model. We do all three disciplines. It's important for us to be at the top of what we do. So we like to have vertical integration. So we had to have people on the ground, boots on the ground. So through having my sons move to Florida and some other family members, son-in-laws and another son also in New Jersey, New York, we were able to say, okay, now we got someone on the ground.
David Moghavem (20:04)
Yeah,
Henry Manoucheri (20:04)
We
really watched it because the philosophy was like old school thinking. lot of guys think that way today and they're extremely successful at it. They said, look, if I live in LA or I in Orange County, I want to be within an hour or two driving. That was really our model of thinking for well over 25 years. And then we said, okay, you know, this can't be done well, but you have to have people that you like and you trust on the ground. So we've done that and it's really worked nice.
It's nice to go visit other markets and figure out there's more to life than just California. But at the end of the day, home still is home. This is probably the best place to be, despite everything we've been through and all the risk. So that was like, now we have people on the ground and we've sort of stood with it. We haven't bought in other markets yet. I think we will. It's just a matter of time. But today we probably have...
the single best operating team ever that I've assembled. ⁓ This group is with me for the last three to five years and we all work well together. We trust each other and ⁓ we know what we have to do. And we started creating verticals inside the company. We have a construction company now. One of my sons started in Florida. So all the construction is done in-house there.
In Florida, they started managing for other people. I'm very proud of them. We started our own insurance company. My son's done it. Wow. we did property insurance, yes. And we've done some of our policies. We saved a ton of money. It's a great business. I'm like, wow. We went to my insurance agency and said, hey, guys, I've been giving you this business for last 5 to 35 years. Why did you not? Sorry, 32 years. Why did you not?
David Moghavem (21:36)
No way. Property insurance?
It's a lucrative business.
Henry Manoucheri (22:01)
give me these savings because you know what happens is just they get lazy. They just sit and collect it every year and then you trust them and then I'm like, wow.
David Moghavem (22:09)
You gotta keep them on it.
Henry Manoucheri (22:11)
We started a media company, similar to yours, called Manitouria Media.
David Moghavem (22:17)
I've been following. I you guys are doing a great job. It's important to get your name out.
Henry Manoucheri (22:22)
is. Social media is a powerful, powerful vehicle today. We have now two people in our office. One does marketing for Universe Living, which is our property management brand and our properties. And the other one is Universe Holdings, which is the acquiring company.
David Moghavem (22:40)
Yeah, we have like a try on living and we do self-management but also starting to do third party management in some of our markets.
Henry Manoucheri (22:47)
Actually, I've given some guys a good compliment. We ⁓ revamped our website about two, two and a half years ago. I think it's time for another revamp. One of the websites that our designer kept me from, it was a Tryon website. It's hell of a website. It's very well done. my compliments on a great website. yeah, was really... Okay, we looked at it. Yeah, guys are good.
David Moghavem (23:01)
It's a good website. ⁓
Thank you. Thank you. I'll bring you back to the team. I take no credit in that.
It's important to get your name out and it has a butterfly effect of being out there. get different deals maybe coming your way or different investors wanting to invest and ⁓ different operators trading notes with.
Henry Manoucheri (23:31)
It's amazing. And now when I go to conferences or to weddings, even when we're band meets, five or 10 people come up to you and say, give me a hug. You're a celebrity now. Who are you? So I saw your podcast. It was so great. It's so energetic. I got so much out of it. Not only did you cover business, you covered personal advice, how to have a successful family life, balanced life, health, this, that.
It's just amazing. So my son, always says that, he says, Dad, when you're sleeping, the marketing machine is going. You don't even know who's looking at this stuff.
David Moghavem (24:08)
You're building trust at scale, which I think is very important. And people get to learn a little glimpse about you at scale. It is fun. It is fun. How's it working with your sons?
Henry Manoucheri (24:17)
And it's a lot of fun doing it.
It's working great. Very proud of them. Very hardworking. Thank God they did not become trust fund kids. They bust their chops and they're driven. the ⁓ next generation is well trained to carry their mantle. So this is really our second generation. And my father really put all the drive and ambition in me. I think his father did to him. And coming to America in 78 was a whole new beginning, like a clean slate.
and we had to prove it up, ⁓ make up all the losses. Everything was left behind, like 90 % of it. So was like starting from scratch. Yeah. Like a lot of us. But some of our ⁓ compadre friends came here with lot of money back then. So we weren't that fortunate. But it was my mission to restore it.
David Moghavem (25:13)
came
before the revolution you got you got to have come with some money if you came after during the revolution
Henry Manoucheri (25:18)
We
can before, like six months before, but my dad had a feeling that something was going to happen. Not quite to the extent it did happen. So it was too late to go back. it's a good story for the kids to really see it and appreciate where they are now. But it's a great story to tell. And there's many stories like this. they're doing a great job in summary.
David Moghavem (25:45)
What I want to go back to what you were saying before on how you guys are thinking of maybe venturing into some new markets. What are I guess ways that you identify a good market to break into? What are kind of the top metrics that you really focus on to make that?
Henry Manoucheri (26:04)
I think the number one rule is having spent 50 years of my life on the brokerage side in the beginning at Marcus and Mittlechap, probably the best training school on the planet. We still do a lot of work with them. IPA and all these guys, love these guys, love the company. George Marcus has been our partner several ventures. And the first lesson there is barriers to entry. You want to be in markets where it's hard or impossible to build.
That's number one number. You know we don't want to have we don't want to go somewhere. That's what we haven't gone into Texas right even though might be a good time to go into Austin now because of the oversupply That's why we haven't we didn't buy in the last Five years in Phoenix. You know a group of people did they bought some terrific assets core core plus brand new But rents went down when it's 15 20 25 percent same with you know same in Texas and
We're very cautious of that. These are markets that are probably good to go into and out of. Right. your Trade in, trade out, but you got to really time recycle. In California, you could sit here for the next 20, 30 years and you'll be just fine. Time in California will take care of everything. Right. So it's barriers to entry, buying below replacement value, that's second. And then we look for job drivers. Where are the jobs being created?
Is there a big demand for jobs? And we look at all sorts of migration patterns. Where are people moving to?
David Moghavem (27:33)
But you know, in LA, you were mentioning job drivers, you're seeing one of the crown jewels of LA, Hollywood and the entertainment industry starting to get hollowed out. what do you make of that in that regard where I do agree with you, the supply side story here for a gateway market like Los Angeles can't compare. as long as you're going in for the long game, you can do well. But there is something to be said about
the entertainment industry now getting hollowed out, ⁓ businesses now starting to go different areas and long-term, I actually do believe that LA can come back, but some of those headwinds make it tougher to make the case.
Henry Manoucheri (28:19)
Well, biggest factor right now, which is on everyone's mind, is this mayoral election. We have some social democrats running. My prediction was that if Mandani won, and I said he's going to win, he did win. I talked about this one of the conferences that was back in November. said, everybody's going to say, aha, we could do the same thing here. So we have right now two candidates running for the mayor position, or social democrats.
It's a terrible thing if that happens. I hope it doesn't.
David Moghavem (28:51)
Yeah,
to the point where Karen Bass is like the moderate now.
Henry Manoucheri (28:53)
Yeah,
it's like, know, Karen Bass, despite the city burned down, you know, whatever, you know, just we got to have her. It's kind of ironic, but I Rick Caruso would run. I saw him actually. I ran into him at restaurant a couple of years ago. He could be a little bit. A couple of weeks ago, actually. I was like, Rick, please, please run. And he's like, I don't know, this, that. So, you you hope that that happens. he's
David Moghavem (29:16)
be our mayor Lori like in San Francisco. He could be that that turning point that San Francisco had. If I saw Rick getting the momentum to win as the mayor and maybe some other force or some other policy that would bring Hollywood back into LA, I could see LA changing the same way that San Francisco had that turnaround.
Henry Manoucheri (29:41)
Strangely enough in New Jersey now, Northern New Jersey in Thomas River, Mount Hollywood, we own properties and Jackson. We are seeing now the Hollywood studios moving there. I couldn't believe it. So we're getting applications from tenants who work for the studios because New Jersey just said, hey, come on in, business friendly. We'll give you a warehouse space. We'll lower your taxes. We'll give you incentives. They're not doing it here. And the other thing is this, what is this? What the hell is this?
David Moghavem (30:07)
They're not doing it
Henry Manoucheri (30:10)
Billionaires tax. Yeah. noise. I think we lost $1 trillion of wealth this year already. We lost a trillion dollars of wealth during COVID. Where did it go? It went to Texas. And Florida. And Florida. And also Tennessee's on fire. Yeah, that's true. I said, that's one of the hottest markets right now, strangely enough. And then not supply constraint. Right. So, I was in Miami actually.
three weeks ago and got invited to play tennis with this tech entrepreneur who I met at a family office conference, became really good friends. He's already bought and sold three companies in the hotel space. And he invites me to Indian Creek.
David Moghavem (30:58)
Beautiful course.
I'm golfer so I see the point.
Henry Manoucheri (31:03)
And
you have to your own police force, you to pass over a bridge, there's only like, I don't know, 84 or 89 homes. Each house is like $75 million plus. And it's just wow. And the next one goes, you know who bought this house next to me? It's Mark Zuckerberg. I said, really? So I went afterwards, I was waiting for my Uber to come back. I took pictures of the house. There it was, $175 million bucks under construction. So that's a big loss. This thing could pass.
and more wealth is gonna move from here. So that's another thing, like what else you wanna do to push people out of here?
David Moghavem (31:40)
Part
of it too is the, you know, the Mark Zuckerbergs are moving, but...
Henry Manoucheri (31:47)
How
going to Howard Schulz just bought ⁓ my favorite hotel in the world, Club Four Seasons in Surfside. My son lives, one of them lives two doors away on the water and he just bought a car for 45 million bucks, five bedroom.
David Moghavem (32:02)
The CEOs, the owners, they're getting out. Will the companies move too, is the question. We are starting to see some of that, of the companies moving. And it has less to do about the wealth tax. It has a little bit more to do with affordability. When they start to see that their employees can't afford to live in where their headquarters are, they have to move to a Dallas where you get really good bang for your buck.
Henry Manoucheri (32:31)
I know a lot of people, particularly in the Jewish community also, very happy with Dallas. Not a place I know well yet, but Dallas has been very, very positive for people.
David Moghavem (32:41)
and business friendly and affordable and you have that.
Henry Manoucheri (32:44)
Channy and real estate partners, know, Mitch Jules, he moved there. Mitch Jules actually- A good friend of mine.
David Moghavem (32:48)
I ran into
him at a wedding. We were actually like in the ocean together. I hit it off with him like, Mitch, I hope he's listening. Cause I'm like, I have a pod. He's a guy. And he moved to Dallas. And I said, why did you choose Dallas? I'm actually living in Miami. And he's like, I would live in Miami, but it's unaffordable for some of my employees. And that's why I chose Dallas.
Henry Manoucheri (32:58)
Super nice.
great guy.
have a lot of other people in LA, essentially cities. Yes, of course. think they took some of the...
David Moghavem (33:18)
They do. You
can't just like up pick everyone and move it. But end of the day, he was fed up with LA. He was fed up with what's going on here with the politics. And he packed his bags and he moved and he moved to headquarters.
Henry Manoucheri (33:33)
Yeah,
he spends a lot of time in Israel now. We get a lot of great stuff for the country. We're very appreciative of what he does. It creates tremendous awareness for Israel supporters. ⁓ We love that. But back to your story, I spend a lot of time in Miami now because of the family and our holdings. ⁓ the weather sucks. It's nice. November to May is nice. It's too hot, but the setting is beautiful.
David Moghavem (34:01)
Gotta
be around.
Henry Manoucheri (34:02)
A
lot of beautiful people, the nightlife is awesome. The restaurants you need like a month reservation, some of the kosher restaurants that I go to. Yeah, it's unbelievable. But ⁓ the traffic is unbearable. It's really bad.
David Moghavem (34:10)
Good culture restaurant scene there.
It's not built for this many people. It's just what they did not plan for my
Henry Manoucheri (34:22)
So
what's the plan for them to...
David Moghavem (34:25)
There's some, yeah, there's some highways that they're making double deckers and from the time I moved there to leaving, they maybe like did like a fraction of progress. I just don't know. The true answer is no one really knows. But there might be a trend down the line where maybe you don't need as many cars. There's also some of these nodes of Miami are very walkable. I lived in Brickell and I worked in Brickell. It is a lot.
Henry Manoucheri (34:52)
Brick is a lot of A
lot of traffic to get to a brick hole. Exactly. get in and out of a brick hole. Good luck.
David Moghavem (34:57)
I in Brickell if you're working in Brickell. Otherwise it's a disaster to get into the...
Henry Manoucheri (35:03)
Like in Surfside, as an example, before COVID, you could buy an ice house for $800,000 per million. Today, that same house for a young couple is $4 million. It's unbelievable.
David Moghavem (35:16)
4 million kind of actually goes a long way compared to in LA. Wouldn't you say that?
Henry Manoucheri (35:20)
About the same. mean, compared to better. It's about the same, but look what happened. It's phenomenal. mean, a young couple starting out, I how many young couples do they can buy a house for $4 million? Unless daddy writes a check, mommy writes a check, or the in-laws write a check for $4 million. So, you know, they're starting out with a condo. There's thousands of condos for sale. But also another place in Miami, Florida, mean, Palm Beach, West Palm Beach, absolutely on sale.
David Moghavem (35:22)
You think it's bad? that's true.
I mean Ross related, Stephen Ross, they're building a lot and that's, know, South Florida is one of those high supply, high demand markets that you're actually seeing ⁓ supply getting absorbed. ⁓ Even with all the shadow inventory from for sale product in addition to apartments. I actually looked the other day on on CoStar and some of these other metrics and it's still sending single digit vacancy. It's getting absorbed.
Henry Manoucheri (35:50)
⁓ my-
David Moghavem (36:19)
⁓ Once you go further up into central Florida, that's where you start to see the vacancy and the concessions. ⁓
Henry Manoucheri (36:29)
Palm Beach is such an exclusive enclave. It always was exclusive, but now you have, it's really billionaire's row. If you're not a billionaire, good luck buying a house there. Everything on the water there is, where does it start? $75 million? It's unbelievable. And this whole social scene there.
David Moghavem (36:46)
It's amazing.
Henry Manoucheri (36:48)
It's a lot of fun to spend time there.
David Moghavem (36:51)
I want to touch a little bit on ⁓ capital raising. As you said, you have your syndication model, but you've also done some JVs with family offices and institutions. How are you capitalizing deals today? What's your go-to cap stack right now to get deals done? And what is that capital looking for?
Henry Manoucheri (37:15)
There's ongoing conversations all the time with the retail window, which is our high net worth individuals, attorneys, doctors, professionals, tech, various industries or biotech, etc. We have that and there is also the family offices that have just become a huge part of our business because we have our own family office, none of the sense. We really do. And we're taking larger positions in our own deals. And thirdly, institutions. Now, institutions, did
a couple of deals with them, more in the preferred equity space in last three years. Now we're having discussions about, but with common equity, but still they are extremely selective on putting out common equity. They're still much more prone to put out preferred equity, but much less willing to put out common equity. mean, the conversations are starting. we are... ⁓
David Moghavem (37:52)
That's all they were placing.
Henry Manoucheri (38:13)
Right now in the process of putting a sales force together, I've done mostly capital raising myself. I recently brought my son-in-law in, he's in New Jersey. He's starting to make some headway. And our goal is to have a sales team to scale a company tenfold, which is one of my goals in the next 10 years, God willing, is to ⁓ assemble a sales force and a sales team to really expand your horizon. I mean, we've seen
A lot of capital come here from the Middle East, money from United Arab Emirates, Dubai, Abu Dhabi, Qatar, Oman, all these places. A lot of guys have traveled there. think it takes time. could certainly raise money from there. Israel has been a darling the last 10 years. Right now, their stock market is on fire.
David Moghavem (39:09)
one of the top performing stock markets.
Henry Manoucheri (39:11)
And we do real estate deals there as well. We're very, very happy despite the wars and everything else. They're eliminating one by one by one. Check, check, check, check. And the enemy's getting eliminated. And I think the Middle East in general has a great future once Iran is disarmed and regime change comes in and we cut off the head of the snake. I think that market will open up. And after what happened now with all these drone and missile attacks, which we're still seeing now.
Who would have dreamt that Dubai, I went to Dubai once, I can't wait to go back, it's really fun. But who would have imagined that they'll have this kind of destruction. I mean, 300 attacks, et cetera. So a lot of people went to vacation there, all these YouTubers, these models or whatever, they're gonna come back, say, well, we had enough of this. They're gonna come back to America. So I think more capital is gonna flow out.
to the US. I don't think Europeans are that active. think Europe right now, because of very, very poor immigration policies, they have a huge problem on their hands. I think they're almost done unless they make a quick turnaround. I'd say capital overseas, big source, family offices. The family office sector and I think the retail sector has been our bread and butter in last two years.
David Moghavem (40:34)
I think for us, it's a similar story how we built out a huge retail platform and that retail platform has been a little... When the Jobs Act passed, we were like one of the first to jump on that bandwagon, Crowdstreet, all that. ⁓ But we have investors that have invested with us through multiple cycles, whether as like the retail capital, maybe this is like their first market cycle.
Henry Manoucheri (40:44)
⁓ like crowdfunding? Yeah.
David Moghavem (41:03)
The ones that have invested with us through multiple cycles are the ones that are understanding the moment and understanding that this is a good time for long-term. Whereas the retail capital have been a little bit more skittish.
Henry Manoucheri (41:17)
I think guys who've been able to scare the companies to take it, let's say, 3,000, 4,000, 5,000 units to...
25,000, 35,000, 40,000, they haven't done it with 300 investors, 200 investors, or 100 investors. They've done it with having a Rolodex of 2,000 3,000 active investors, of which not all everybody's active at the same time, but you need at least 1,000 active investors of your base at any given time. That's how you scale up. And then you need relationships with institutions, you need to go to conferences, you need to stay in front of them.
⁓ Even though it might take a long, long time, like anybody else, they're human beings. It's a matter of trust and earning the business and getting to know them and developing chemistry and staying in front of them. That's what we try to do. also ⁓ the Middle East, it takes time to get under trust. A good two, three years of courtship.
David Moghavem (42:17)
Yeah, the middle, we've tried to break into like the Middle East, like we have our Israeli investors who have been phenomenal for us, but the Middle East capital has been tougher to crack. You guys have raised some Middle East capital. It's been tougher to crack.
Henry Manoucheri (42:30)
We haven't yet.
I think I'll have an easier time at it, speaking Farsi maybe. Yeah, that's true. Or throwing out some Arabic words, et cetera. But I know their mentality. Every time I've met them, they've been very gracious. Those people are very educated. They're highly Americanized. Right.
David Moghavem (42:50)
They understand the moment that they needed diversify out of oil or they needed to diversify out of Middle East and the safe haven.
Henry Manoucheri (43:00)
They want a 6%, 7 % cash on cash, out of the gate, something solid, a good operator.
David Moghavem (43:07)
Hard to find in California. ⁓ So one thing to wrap up, you've built an incredible company with Universe Holdings. For those out there trying to replicate the model, what's some advice to emerging GPs, sponsors, syndicators out there ⁓ that you would give them?
Henry Manoucheri (43:08)
very hard.
I think you have to be... ⁓
You have to perseverance, number one. You can't, you just don't give up. Do not give up. Fight, fight, fight. You know, stand up and get up every day. need enthusiasm. You need to be also persistent in your approach with yourself. You need to take time in the evening or in the morning before you begin working to write a plan for the day. Or if you wrote the plan before, look at it every day or every other day.
to just have yourself focused. We all have the same amount of time during the day. I have probably a lot less time than my ⁓ colleagues because I'm religious. I spend a lot of time learning Torah and going to synagogue every day, et cetera, et cetera, or going to gym to stay fit, which is very important as well, to have good, clear thinking. So if you have less time, that time is really precious. You gotta...
really ask yourself every day, am I being productive? Am I spending time on the right thing or am I just making calls that are easy? I'm saying, I'm socializing. Doing things you don't wanna do that are hard to do, once you do them and you face the music is when you break the next barrier. And life, ⁓ it says particularly of young people, if you have young kids, ⁓
your problems are simple. When your kids get older, the problems get more complicated. As life progresses and you have more offspring and your net worth grows and your business grows, the amount of challenges you face get bigger and bigger. The other day I spoke last Wednesday for about 40, 50 young guys who wanted to have a combination of what's it like to have Torah and have success.
And the topic was how to overcome obstacles in life. mean, also growing and building a business, you constantly overcoming obstacles. So I sat down and I wrote every single trial, tribolution and test I had in my life. And I said, what was my fear back then? What was gonna happen? What is it that really happened? And did I come out of it?
was a better off or worse off. And in every single instant, ⁓ everything worked out okay. It was meant to be. Every struggle, every test became stronger and stronger. And right now, ⁓ I'm noticing tests that are getting much more challenging. The bar is getting raised and God doesn't give you tests you can't pass. If he's giving you that test,
As we call in Hebrew, a nisayon, as is because something that you can't pass and there is a greener pasture in front of you. So if you have fears, ⁓ face them. Write down on a piece of paper what's worst that can happen, what's the best that can happen. If you have ambition, write it down, have a business plan and look at it every day and have a goal in life, live a balanced life. At the end of the day, you can't take any of it with you. I've said this before.
Yeah.
David Moghavem (46:58)
It's uh, like how you emphasize write it down. I think the channeling it and physically
Henry Manoucheri (47:06)
I don't do it on my own. I still am an old school guy. I like to take a notepad, not even an iPad, know, pen, pen, paper, carry these lists around. Cross, cross, done, done, you know, check back again.
David Moghavem (47:19)
It's
the idea of manifesting and I think it's important for the ambitious entrepreneur trying to get to successful shoes or ⁓ someone who wants to live a full life, not just a successful life but a full life, it's write it down, manifest it and bring it to fruition through continually focusing on the goal.
Henry Manoucheri (47:47)
Yes.
David Moghavem (47:48)
while enjoying the journey.
Henry Manoucheri (47:50)
Exactly. So you're expecting a baby soon?
David Moghavem (47:53)
No,
we're working, but whatever Hashem wants, right? No, not pregnant. Not yet, not yet. But we are, we moved here for, you know, preparing for that next chapter.
Henry Manoucheri (47:57)
Very nice. I thought your wife was pregnant. not yet. ⁓
all of the came in and that's a little
David Moghavem (48:12)
You you gotta you gotta find the nest you gotta set yourself up before starting that shit
Henry Manoucheri (48:18)
I'm going back to Miami.
David Moghavem (48:20)
Well, we still have the office there, so I'll be going back and forth for work, this is home end of the day. know? we just need to look for a place.
Henry Manoucheri (48:30)
We want to see this trend of more young families moving back.
David Moghavem (48:34)
This is the reverse migration, right? Everyone COVID moved to Florida.
Henry Manoucheri (48:38)
I think that the Persian Jews, and particularly Iranians, they have been very loyal to California.
David Moghavem (48:46)
They have been. We're a very loyal community. have a beautiful... Say what you... Exactly. We're sticky. So one good rent growth metric for LA is that you have a community that's not leaving.
Henry Manoucheri (48:50)
And they're not giving up.
I mean, look at some of the guys your age in our subgroup, some of these tech entrepreneurs, what they've done, the kind of properties they're buying. I unbelievable. All the guys, know, it's, it's Paris will be so proud. It's beautiful they've done. Short time.
David Moghavem (49:13)
Unbelievable.
No, we're doing
exactly so. Henry, really good having you. Great. Appreciate it. Thank you so much. And ⁓ looking forward to see you. To the next one. Awesome.
Henry Manoucheri (49:32)
Till the next one.
Thanks.