The Ledger
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Broyer: Newbrook avoids real estate acquisitions in California and New York
“We do not touch California. We don't touch New York. These places where you don't know if there's going to be restrictions put in place that are going to impact our ability to manage the assets the way we need to, or that are going to increase taxes on the sal…”
Newbrook targets two-thirds of investment returns from cash flow
“For us, to Robert's point, we look to have about two thirds of our return to come from cash flow. That is the best risk adjusted way for us to look at these versus a floating rate buyer that might not care about cash flow and might rely on appreciation at the …”
Broyer: Newbrook underwrites property exits assuming a persistent buyer's market
“We underwrite that we're going to be selling them in an environment similar to today, which is largely a buyer's market.”
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”
Broyer: Real Estate Insurance Costs Have Fallen Drastically Over Past 12-24 Months
“Although insurance has come down drastically over the past 12 and 24 months, We're seeing a lot of renewals where we're decreasing our insurance costs across the country.”
Broyer: Multifamily investing is far less crowded due to overleveraged syndicators
“Multi-family is far less crowded than it was a couple of years ago, given the number of people that have floating rate debt, that are over levered, that are on the sidelines, that can't raise capital.”
Broyer: Newbrook Achieved 13% Rent Growth on Charlotte Asset with 20% Renovated
“Today, we've had 13% rent growth in the past 16 months on that asset, and we've only renovated 20% of the community, so we know that we have rents that are heading the right direction, and we have strong tailwinds for the next 12 to 24 months as we continue to…”
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.”
Broyer: Conservative Insurance Underwriting Disqualifies Many Deals for Newbrook
“We tend to underwrite in a manner that includes more of a worst-case scenario from an insurance perspective, and by default, we end up not being able to pursue those deals because it just doesn't meet our returns threshold.”
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.”
Broyer: Newbrook secures 50% to 70% equity before going hard on deals
“So we know that when we're buying deals, we have about
50 to 70% of the equity already raised at the time that we actually go hard on the transaction.”
Broyer: Newbrook Acquired Charlotte Property at 6 Cap with 4% Financing
“We were able to buy the deal with eight years of financing in place at about a four percent rate, and we bought it around a six cap, so at 200 basis points of positive leverage.”