Kyle Jeffers, ACORE Capital
Kyle Jeffers
Senior managing director and head of western region and southwest region originations at ACORE Capital
“I love L.A. (We love it!)” Randy Newman once sang.
Of course, that was in 1983, when the prime concern was how to replicate Michael Jackson’s newly introduced moonwalk, rather than a global pandemic raging outside of our windows.
Still, the city’s pull remains palpable, said ACORE Capital’s Kyle Jeffers: “We’re still bullish on Los Angeles. I think [it’s] a high-quality place to live and a diversified economy; you have entertainment, you have technology, you have real estate, you have financial services. So, you have a lot of different economic drivers.”
And the proof is in the pudding. Jeffers’ San Francisco and L.A. teams closed more than $1 billion in deals during COVID, with a further four deals — totaling roughly $200 million — currently in due diligence.
“We’ve been actively lending,” Jeffers said. “We’re cautious on certain sectors and being careful on valuations, but I think there are good transactions out there. We’re looking for good sponsors in good markets, and trying to make good risk-adjusted returns for investors.”
Recent transactions include “quite a bit” of multifamily construction, Jeffers said. “I think that’s a good space to be landing at differently upon delivery in two years. We still view L.A. as a good long-term market. Obviously, it hasn’t had this massive spike in rents like San Francisco or Silicon Valley have. We’ve had rent growth, but we haven’t had uncomfortable spikes. And I think it’s still a healthy market once we get through the pandemic.”
ACORE also likes the industrial and life sciences sectors, but remains cautious on hotels and office for now.
As for how it’s competing for the few market jewels in this volatile time? “I think one of the things that differentiates us is that we do all of our asset management in-house, and we generally hold the whole loan,” Jeffers said. “During the pandemic, there have been various modifications and things that we’ve had to work through with sponsors. And, because we asset manage everything without using external third-party asset managers, we can move quickly. So, as we’re chasing new loans, we’re able to say, “Look, you’re only going to deal with us.” I think that’s a really attractive thing for sponsors.”—C.C.
