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Kitsuma Properties is a real estate investment company that specializes in acquiring and managing commercial properties primarily in the Southeast and Mid Atlantic regions. Our primary objective is to identify and assess opportunities in growth markets with increasing population and job growth. We focus on favorable trends within the region coupled with strong local fundamentals.
Kitsuma Properties has built a number of strategic partnerships that allow us to bring a very diverse and deep skillset to each project. We also partner with private investors to generate the capital needed to fund select deals. This allows us to pursue opportunities that offer investors compelling returns on investment.
We start with a top-down approach by analyzing our target markets. We typically invest in the Southeast and Mid-Atlantic regions but aren’t afraid to go where the numbers make sense. We favor secondary and tertiary markets with population and job growth. Once we establish a target market, we drill down to the local level to find out about the area, town, developments and changes as well as local neighborhood of the property. From there we focus on the property itself by examining building condition, leases, tenants and Net Operating Income among many other aspects of the deal. Each individual situation and property will guide us in our decisions around how long we hold the asset, the capital committed and work done. We believe commercial real estate investing cannot be successfully applied as a one size fits all strategy and to maximize returns we must be nimble enough to adjust strategies and pivot where necessary.
Investors can request an introductory call to determine their suitability as a partner in future projects.
We don’t search for data that we can bend to fit our narrative. We check data first and then see if the investment fits into that data set. Data can be cherry-picked and manipulated to fit whatever narrative you are looking for. If you look hard enough or choose the right time frame there are many instances where both consciously or subconsciously you can find a pattern to fit your narrative. We don’t force the data to fit our narrative, rather we look for investments that make sense given strong data.
We stay asset class agnostic, if the investment makes money and fits our strategy we don’t care if it’s a mixed-use building, industrial warehouse, retail plaza or otherwise. We remain nimble and willing to invest in a variety of assets. We are able to look at a broader selection of assets because we have such a deep set of expertise with our partners.
If you spend too much time entirely focused on one asset class or type of investing you lose sight of the macro factors and you tend to put that asset class on a pedal stool. This always seems to play out when an asset class gets really hot and everyone is making a ton of money in that asset. Once you’re married to a particular asset such as multifamily it’s hard to look in other places for profits so you chase worse and worse deals not realizing the macro environment has been changing around you.
Sometimes it seems that almost everyone no matter the asset class or investment seems to think their asset class or business is recession resistant. We’ve evaluated a LOT of businesses and almost every seller or broker seemed to think they had a recession resistant business, even in very cyclical industries! It’s important to know your risks and manage accordingly. We stress test each investment to ensure we underwrite conservatively.
History rhymes but doesn’t repeat. While we may not see the same reasons for a recession that we saw in 2008, it doesn’t mean we won’t have one. It just means that a different asset class or sub asset class will be hit. If your investment depends on assumption that a strong current growth rate will continue for the foreseeable future you don’t have an investment you have a speculation. When lots of people speculate about the same asset class/investment and the economy turns that’s usually where you’ll find the most pain.
We ALWAYS insert a healthy dose of logic! We like data and everyone should be using good data to make important investment decisions however you should also understand that data and some of the factors driving it and if you really can’t make sense of why a particular investment looks so good or if the numbers just don’t add up then you should be digging a lot deeper before pulling the trigger. You can still have a good investment with bad macro conditions but bad investments or using silly numbers can get you in trouble in the best of conditions.
This leads us to our final principal, just because you CAN buy something, doesn’t mean you SHOULD buy said thing. Just because you have the money sitting in an account and ready to go doesn’t mean you NEED to use it, this behavior leads to subpar deals. Big institutions are guilty of this behavior as they gather money from investors because they can’t charge you a fee for sitting in cash they buy assets with that money no matter what. Good deals can be had in any market but putting massive amounts of cash to work during challenging times is a lot harder than finding a good deal on a local strip mall. A small or boutique money manager whom has skin in the game is going to be pickier and more nimble than a large institution. This leads to decision making with more thought and conviction and leads to quick pivots and asset purchases in the markets.