Opinion
Boucai: Traditional Real Estate GPs Are Structurally Misaligned with Investors
“They are generally using short-term floating rate financing And they have shorter term hold because they're trying to generate carried interest income to pay themselves. And then lastly, I would say they don't have as much personal capital invested. So the ali…”
Assertion Supported
Boucai: Early 2000s long/short hedge funds yielded 10-15% annually amid flat markets
“Broadly speaking, the markets were flat in the 2000. And in the hedge fund business in the longshore, you could make 10, 15% a year. There were sectors that went up when other sectors went down. Correlations were low. Competition was low.”
Assertion Not checkable as stated
Boucai: 95% of Real Estate Operating Partners Interviewed Wanted Floating-Rate Debt
“95% of the people that I met wanted to use floating rate financing.”
Disclosure
Boucai: Newbrook Requires Day-One Positive Leverage on All Acquisitions
“One of the cardinal rules of real estate investing that we have at Newbrook is we want positive leverage to happen from day one.”
Assertion Not checkable as stated
Boucai: Agency financing gives multifamily continuous debt market access over other sectors
“Because of buyers, we can borrow off of Fannie and Freddie financing, we always have access to borrow from the bond market effectively, whereas the other asset classes have more risk in accessing the debt capital market.”
Insight
Boucai: Low capex enables multifamily to distribute cash more consistently than office
“Multifamily is a asset class that Has historically had low capex. It lends itself well to making distribution, whereas things like office or retail are tenant improvement heavy. Therefore, maybe more episodic in its ability to return capital to investors.”
Assertion Not checkable as stated
Boucai: 80% of Big Alternative Firm Investors Are Tax-Exempt
“80% of their investors don't pay taxes. 20% do. That's the growing part of their business because they're slowly trying to expand to the private wealth market. Their products are not optimized for tax paying individuals the way ours are.”
Disclosure
Boucai: Newbrook skips bonus depreciation to optimize for New York investors
“We don't take, for example, bonus depreciation, which is very favorable for a lot of the investors in New York. It's not favorable for them to take bonus depreciation”
Insight
Boucai: Significant Wage Increases Typically Flow Into Rents Over 12–24 Months
“When you get a big wage increase, it typically shows up in rents over the following 12 to 24 months.”
Assertion Supported
Boucai: Dot-com tech boom drove REITs to steep NAV discounts
“REITs would be trading at a significant discount to NAV because people were selling public real estate stocks to buy the technology stocks. Conversely, those stocks did better when the technology stocks blew up.”
Disclosure
Boucai: Newbrook Has Acquired Eight Assets and 2,100 Units Since Launch
“Since that time, we've acquired eight assets, about 2100 units.”
Disclosure
Boucai: Newbrook seeks to create a tax-advantaged fixed income replacement
“What we are trying to create is a synthetic fixed income replacement stream for an investor and a tax advantage one.”
Disclosure
Newbrook Can Deploy $100M-$200M of Capital Annually, Says Boucai
“We cannot deploy five billion dollars of capital a year. We could deploy a 102 hundred million type of capital a year. That's what we're capable of.”
Assertion Not checkable as stated
Boucai: Blackstone Real Estate had only 12 professionals during Fund II
“I joined the group when it was on Fund Two. The group only had 12 professionals.”
Disclosure
Boucai: Newbrook manages about $1B across hedge fund and long-only strategies
“Today we have about a billion dollars of AUM between our hedge fund and our long-only fund.”
