Onay Payne
Managing Director at Clarion Partners
The power of smart equity was more evident than ever this past year. And if there’s a person who personifies what it is to be successful in investing and pivoting to maximize returns on behalf of her clients, it’s Onay Payne.
Payne joined Clarion Partners in 2003, and is responsible for several billion dollars in assets under management for multiple separate accounts and commingled vehicles today.
“It was a challenging year,” Payne said. “Certainly, the first part of the year, just adapting to the magnitude of COVID.”
The complexities of the past year didn’t stymy Clarion’s activity, however, and Payne was busier than ever. In addition to closing new deals and working with investors, she was actively on the hunt for yield.
“We’ve been excited about deploying capital into secondary markets, where there’s a little more yield,” she said. “One vehicle in particular that I’m working on is Clarion Partners Real Estate Income Fund, which is a competitor in the non-traded REIT universe. It’s focused on retail or individual investors, so it’s different from our typical, institutional portfolio.”
Branching out to new locations, Clarion recently wrapped an equity investment in South Windsor, Conn. The industrial asset, acquired by Metropolitan Realty Associates, boasted a 15-year double-net lease with FedEx. “It was a market that we hadn’t been in before, really well-located with nice proximity to New York and Boston, and a great tenant,” Payne said of the transaction.
Payne also pivoted to dedicate more time to mezzanine investments. “Everybody wants industrial, multifamily and life sciences, so cap rates are compressing for those asset classes,” Payne said. “Because of that, I’ve seen many players, ourselves included, be willing to play in different parts of the capital stack. So, whereas it might not make sense for me to buy a multifamily deal at a 3.5 cap, I can come in in the mezz portion of the capital stack and meet the investment objectives that I have.”
Every opportunity that crosses Payne’s desk is underwritten like equity. “So, if we had to own it, this is the basis at which we’d want to own it,” she said. “We’re coming in at a relatively conservative basis, but playing across the capital stack is another way that helps us get some of the yield that we need.”
In addition to already having a significant life sciences portfolio, Clarion has two sector-specific funds focused on industrial and multifamily opportunities. Happily, all three asset classes have benefited from significant post-COVID demand.
“There’s increasing demand within multifamily broadly,” Payne said. “We’re also looking at a number of SFR deals.”
As an employer, a manager and a leader, the importance of open communication during COVID has been paramount for Clarion.
“I’ve had to interact with my team members in a really different way,” Payne said. “Because of the stresses around COVID, I often checked in regularly to try to make sure that all were remaining balanced and not feeling burnt out. For me personally, as a Black woman, what I viewed as the parallel pandemics of COVID and racial injustice took an additional mental toll, so working alongside my partners to ensure a feeling of support, community, and empathy for all employees given the various social issues we have faced as a nation this past year was a priority.” —C.C.
