David Koletic, a real estate investment executive with Bank of America’s Specialty Asset Management Group, works for wealthy clients (portfolios of $50M-$60M), family offices and foundations to facilitate direct real estate investing rather than partnership investing or REITs (real estate investment trusts).
But wait, agents…. before you assume that Koletic’s insights and advice about real estate investing only apply to the super wealthy, keep reading. Koletic’s ideas apply to you and your clients of slightly more modest means as well.
Koletic looks to locations such as Dallas, Atlanta, Charlotte, Raleigh-Durham, Orlando and each of their surrounding suburban regions that have and/or are experiencing surges in population and job growth that have demand for warehouses and multi-family housing.
The surge in demand for warehouse space is a direct result of the rise of online shopping. According to the US Census Bureau, Q1 2019 e-commerce sales totaled $127.3B and represented 10.2% of all retail sales. Just three years ago within the same time frame, e-commerce sales totaled $85.4B or 7.6% of all retail sales. Obviously, such explosive growth demands more warehouse space to both accommodate and expand online operations and to cut delivery time.
Koletic looks to areas such as Dallas, a metro that grew more residents than anywhere in the country in 2018, and Phoenix-Mesa-Scottsdale, a metro that grew residents second only to Dallas. Koletic also looks to metros that are close to population centers in and/or near large cities such as Tampa, Atlanta, and Northern Virginia that can offer “last mile” delivery so “…you can get the goods as close to the customer as possible.”
In terms of multi-family housing investments, Koletic looks at populated urban areas that offer job opportunities and lifestyle choices. “Demographic studies show that Millennials…are focused on lifestyle and city or right outside city locations…” that enable their job choices and career opportunities.
Koletic told Mary Romano of Pento that the Bank of America Group has “boots on the ground” or real estate professionals who find properties, conduct due diligence and manage purchased properties for its clients. Agents, you could fill one of those pair of boots for Bank of America, any financial institution that services real estate investments for its clients and/or your own clients who are interested in real estate investments.
The National Council of Real Estate Investment Fiduciaries (NCREIF) reported that its National Property Index indicated that real estate investment gained +6.7% nationwide in 2018. Koletic believes that low mortgage rates, solid economic growth, strong employment numbers and rising occupancy demand due to online retail growth “…should help prices continue to rise.”
As long as investors and agents for investors are selective, Koletic believes direct real estate investing, particularly in multi-family and industrial spaces, is good for all involved. “Real estate keeps chugging along. Some may think it’s boring but it has the steadiness of cash flow.”
Likely that such insights and advice generate positive returns for super wealthy clients…such insights and advice may well generated positive returns for your clients and yourself.