David Becker, the managing director of the equities division at Time Equities, has been with Time Equities for more than 15 years. He started at the firm in 1998 as an acquisitions associate, and now he heads the firm’s equity division, overseeing the firm’s opportunity fund. Through the fund, Time Equities has raised more than $100 million over the last two years and has expanded its footprint on a global scale. Mr. Becker shared some details of recent purchases overseas with Commercial Observer, as well as areas where Time Equities and its investors are looking to deploy capital.
Commercial Observer: How did you end up working in real estate?
Mr. Becker: My family has been in the real estate business since my grandfather began working in the industry. My grandfather had an accounting business and, in the mid-1970s, saw that there was an opportunity in New York City to acquire buildings that had tax advantages and thus became an investor and owner.
I went to business school at Tulane University in New Orleans, and when I graduated, I was young, ambitious and ready to work. I was always interested in different facets of the real estate business. Initially, I was intrigued by new building developments but ended up realizing the underlying economics and the importance of owning real estate long term was most appealing to me. I also liked the idea that every building acquisition was a new deal.
How did you come to work at Time Equities?
Once I graduated from Tulane, I worked as an analyst for Arthur Andersen in their real estate consulting practice, advising Wall Street firms on real estate acquisitions and loans. I was offered a position at Bear Stearns in 1998, and I met with my [stepfather] Robert Kantor [the president and chief operating officer] and Francis Greenburger [the chairman and chief executive officer] at Time Equities for career guidance. Since the firm was actively expanding their portfolio nationally and in Canada, they encouraged me to join them as an acquisitions associate. They ended up becoming phenomenal mentors, who have helped shape my career so far.
What exactly does your role as managing director of the firm’s equity division entail?
I help oversee various equity capital strategies for new acquisitions and developments, including a series of investment funds offered throughout the broker-dealer financial advisory community, family offices and high-net worth investors, working very closely with Francis. In the past five to 10 years, we have expanded the footprint of our portfolio and are now in 28 U.S. states, Canada, Germany, the Netherlands and the Caribbean with investors located all over the country.
How much has been raised through Time Equities’ opportunity fund?
Roughly $100 million in the past two years.
Where is the company looking to invest the fund’s capital?
We are an opportunistic company that focuses on all asset classes including office, residential, retail, industrial and parking garages. We believe it’s best to be diversified both geographically and by asset class, so we are primarily focused on properties that have good income-producing characteristics today, while also demonstrating long-term appreciation potential through lease-up, repositioning and management. We typically do not put development deals in our funds (although we do develop for our own account), as our investors are more interested in predictable returns and since development is speculative and higher on the risk spectrum.
What are some of the most exciting co-investments you’ve completed recently?
We recently acquired a portfolio of office properties in the Netherlands—in and around Amsterdam—at roughly $70 per square foot with going-in returns in the 10 percent unleveraged range and with additional lease-up potential. The Netherlands has gone through some economic tough times, and while there is not much available bank financing, we see good underlying fundamentals in the region. Since our strategy revolves around acquiring for the longer term, we can focus on the lease-up with no set timetable—so long as we can maintain our current returns. We continue to incorporate similar global assets into our new fund so our investors are able to have international diversification in relation to the U.S. assets we acquire. In the U.S., we recently acquired the Travelers Towers in Southfield, Mich., which is an 800,000-square-foot office complex with a 3,000-car parking deck. We paid roughly $30 per square foot at 50 percent occupancy earning a 5 percent return going in, which we acquired with all cash. We have since repositioned the complex and leased to 80 percent occupancy, which made the project suitable for traditional financing. The property is now earning [a] 20 percent [return].