Shaunak Tanna

What’s the one thing you wish you’d known in March 2020 that you know now?

That multifamily in certain markets will start selling for three-handle cap rates. The compression in cap rates we have seen in non-gateway markets post-COVID has been amazing. We expected multifamily to do well but didn’t expect valuations to be where they are today!

Pick your poison (and tell us why you’d drink it): retail or hospitality?

Well, I will drink a cocktail of grocery-anchored neighborhood centers and hospitality with diverse demand drivers. As the post-COVID recovery continues, leisure-oriented properties have had a fantastic season and with international travel resuming, next year will be even better. Thoughtful asset and market selection in those sectors is how one can win.

Where are you seeing the most competition for deals today? What’s the greatest weapon in your bidding arsenal?

Demand for [collateralized loan obligations] has made floating-rate bridge loans very competitive. Say “value-add” and money is available! That’s where the competition is. We differentiate ourselves by investing across the capital stack — senior debt, mezzanine, preferred equity and common equity. As a platform, we can provide a tailored solution to optimize the cost of capital for sponsors.

New York City: “I want to be a part of it”?

It’s not either/or for us. We love New York and think, while it will see bumps along the road, it will continue to be amongst the most important cities in the world. We are a middle market-focused investor. We love the growth we are seeing in Miami, Austin, Denver, Dallas, among others.

What’s your favorite secondary market and why?

I wouldn’t say one. As I said, we like Miami, Austin, Denver, Dallas, among others. Lower cost of living and doing business is causing population and job growth leading to a virtuous cycle of attracting more companies and causing further growth. We like the dynamics in many “growth” (we like this term versus “secondary”) markets.

Is SFR here to stay as a CRE asset class? Why or why not?

SFR is here to stay. It is already a big asset class looking at the success of [real estate investment trusts] and SFR securitizations. Families like the flexibility that renting provides and, during COVID, realized the advantages of outdoor space and not having to share corridors and elevators. With saving for a down payment not getting any easier, for some renting is more a necessity than choice. Institutional capital provides an elegant solution. At the same time, local governance in America depends on an engaged community, and we as a society need to think if not having a “stake” will in the long run cause people to care less about the community.

What keeps you up at night?

People have been investing, assuming money will always be cheap and will always be available. What happens once the Fed turns off the spigot? We have seen the movie before. The potential consequences of the end of the free money reign keep me up!

Lighting Round

Stabilized or transitional assets?

Transitional.

First work trip post-COVID?

Houston.

Fast-food guilty pleasure?

‘Shroom Burger at Shake Shack.

Peloton bike or outdoor cycling?

Peloton and outdoor running!

Last book you read?

“Poor Charlie’s Almanack” by Charlie Munger.

Who would play you in the biopic of your life?

Matt Damon.

“If I hadn’t pursued a lending career I’d be …”

A politician!