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Real Estate Investing: Where Multimillionaires Are Putting Their Money – Bloomberg

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$85 Million Beverly Hills Home Targets Ultra-Rich

For all the talk about how stocks may be overvalued, almost two-thirds of the members of an elite multimillionaires club expect the stock market to end 2021 even higher.

The portfolios of members of Tiger 21 — a network of wealthy entrepreneurs, investors and executives with an average of $100 million in assets — have an average of 22% in public stocks. The group discloses the asset allocation of its 850 members’ portfolios each quarter.

The club meets in groups of 15 in cities around the world to discuss investment opportunities and undergo “portfolio defenses”— sessions where other members weigh in on how a member is invested. A survey of members found that 65% thought the market would end the year higher.

The most widely held stock is one popular with retail investors: Apple Inc. Big tech stocks, as well as Nvidia Corp. and Tesla Inc., are also favorites of members, said Michael Sonnenfeldt, founder and chairman of the group. 

Portfolio Snapshot: How Tiger 21 Members Invest

Source: Tiger 21; Pie excludes 1% in commodites and 1% in miscellaneous

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Real estate remains the largest chunk of portfolios, at 27%. Tiger members are trying to figure out “what has changed forever in real estate, what has changed temporarily and what will bounce back quickly,” Sonnenfeldt said.

Industrial real estate “is on fire,” particularly distribution centers that form the backbone of the internet delivery chain, said Sonnenfeldt. Investing in workforce housing is also popular, he said, including converting limited-service hotels. Those units could be garden apartments around cities aimed at tenants making about $50,000 a year in stable jobs.

“It’s critical when industries are moving into new areas that they have sufficient housing for the workers they’re going to employ,” Sonnenfeldt said.

New York City real estate probably faces a bigger challenge than the financial crisis of the 1970s, said Sonnenfeldt, who has a long history of investing in real estate. “If you have a 20- to 30-year view, you might look at it one way, but if you buy today and expect it to appreciate over five years, that is a very different calculation than it was five years ago,” he said.

And how do members feel about two of the most-talked about investments, crypto and SPACs? “Hot, hot, hot,” said Sonnenfeldt, noting that he’d just gotten off the phone with a member who was about to float a crypto fund with the thesis that we’re only in the first or second inning of crypto, and in particular, blockchain.

What members do not feel is hot is hedge funds, which have steadily shrunk from being 7% to 9% of portfolios a decade ago to 3%, the lowest percentage ever. “Part of the reason is that hedge funds typically have high fee structures, which can be obscured in periods of high returns,” Sonnenfeldt said. “But when you have a low-interest rate environment that’s causing low returns, the fees become quite obvious and quite objectionable.”

Like most investors, Tiger members can’t find much to interest them in fixed-income markets. At 7% the fixed-income slice in portfolios is at its lowest level in a decade. Cash spiked to an unprecedented 19% early on in Covid, but are now back to a more typical 13% as members who’d raised cash by selling publicly traded equities get back into the stocks.

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    Goldman Bets on City Bounceback with Paris Real Estate Deal – BNN

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    (Bloomberg) — Goldman Sachs Group Inc. is betting that prime retail and office space in Europe’s top capitals still has a bright future.

    The firm’s asset management unit has agreed to acquire a block in the French capital that it plans to transform into an upscale store, with office space above, according to Tavis Cannell, who is co-head of EMEA real estate. It’s the latest in a series of real estate bets the bank is making on the future of cities as the world begins its gradual recovery from the coronavirus pandemic.

    “We never believed that cities were going to die through Covid and that everybody was going to move to the suburbs,” Cannell said in an interview. “And we do believe in the future of the office and continue to see bifurcation between high-quality buildings and everything else.”

    Goldman is not alone in that view. Private equity firms including Brookfield Asset Management Inc., KKR & Co. and Tishman Speyer Properties LP have been snapping up plots in cities around the world that can be transformed into workspaces designed to lure workers back to the office.

    Goldman and venture partner Immobel SA paid about 100 million euros ($119 million) for the property at 277 Rue Saint-Honoré in one of Paris’s toniest districts, a block north of the Place de La Concorde, according to people with knowledge of the deal. Goldman is investing a mix of clients’ and the firm’s capital for the transaction as part of its opportunistic real estate investing business.

    A spokesman for Goldman Sachs declined to comment on the price or the fund.

    “Post-corona there are huge opportunities,” Immobel Executive Chairman Marnix Galle said in an interview. “People who are used to working in chicken coops and have spent the past year working from home want a completely different environment now, they want much better buildings.”

    ©2021 Bloomberg L.P.

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    Boutique Ottawa real estate firms find freedom in doing business their own way – Ottawa Business Journal

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    After more than a decade in commercial real estate, John Zinati had settled into a comfortable career as a leasing manager at a well-known locally owned Ottawa firm and could have simply counted down the days until retirement.

    Instead, he chose a different path. In 2016, he launched Zinati Realty, a boutique brokerage that serves mainly owners and landlords in the office, retail and industrial sectors. 

    Since then, Zinati has brought on two more brokers and is looking to expand his team further as the industry slowly works its way toward a post-pandemic future. Looking back on his decision to leave the security of an established firm for the uncertainty of life as an entrepreneur, he has no regrets.

    “I was just faced with too many limitations, so I made the decision to go out on my own,” Zinati explains. 

    “Being nimble and quick and working closely with these owners to get their spaces filled or get their buildings sold is really rewarding.”

    Zinati is one of a growing number of local real estate executives who’ve left comfortable, secure jobs at established big-name companies to start their own brokerages and advisory firms.

    Many of these owner-brokers point to the freedom of being able to make their own decisions and do their own deals without having to answer to corporate bosses as a major factor in making the leap.

    “I think commercial real estate brokerage in the boutique setting is one of the last few places where you can just earn more with a little bit more elbow grease,” says Darren Fleming, the CEO of Real Strategy Advisors. “There’s so much upside.”

    Before launching his own firm, Fleming spent seven years as managing director of Cresa’s Ottawa office. His lengthy real estate resume also includes four years as a sales representative at Colliers International and a one-year stint as a leasing agent with Montreal-based developer Canderel. 

    In 2016, Fleming sold his shares in Cresa, left the company and enrolled in the Executive MBA program at the University of Ottawa’s Telfer School of Management. 

    The following year, he launched Real Strategy Advisors, which provides advisory and brokerage services to office tenants in the tech, professional services and not-for-profit sectors.

    He’s never looked back. Too often, Fleming says, strict corporate policies at bigger firms put entrepreneurial-minded brokers in a straightjacket. He points to an example from early in his career, when an employer told him he was storing too much sales data on a company server. 

    “I think I’m addicted to being an entrepreneur and being my own boss,” Fleming says. “Are there days when you wish someone would sign off on payroll other than you? Yeah, but it’s worth it in the end.”

    KOBLE thriving

    Graeme Webster is a partner at Ottawa’s KOBLE Commercial Real Estate, a firm that brokers mainly off-market and unlisted office and industrial transactions for buyers such as entrepreneurs and well-heeled professionals looking to build up their investment portfolios.

    He and fellow partner Marc Morin founded KOBLE seven and a half years ago after cutting their teeth for more than a decade at large, well-established firms. Webster says he thrives on the feeling of satisfaction he gets from navigating clients through deals that can set them up for retirement or attain assets that can be passed on to future generations. 

    “Our focus is to help people establish that family legacy,” he says. “Real estate is really just the tool to allow them to do that.”

    Now at six employees, KOBLE recently brought Ottawa commercial real estate veteran Richard Getz on board as a senior adviser. The firm is also looking to hire someone to oversee its business operations as it continues to expand.

    Webster says that despite the overall uncertainty facing the industry at the moment, KOBLE is thriving. The firm has more deals in its pipeline than at any other time in its history, a development he attributes largely to the city’s reputation for being a safe haven in times of economic turmoil.

    “It’s a place where when there’s volatility, people want to jump in (the market),” he explains.

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    Boutique Ottawa real estate firms find freedom in doing business their own way – Ottawa Business Journal

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    After more than a decade in commercial real estate, John Zinati had settled into a comfortable career as a leasing manager at a well-known locally owned Ottawa firm and could have simply counted down the days until retirement.

    Instead, he chose a different path. In 2016, he launched Zinati Realty, a boutique brokerage that serves mainly owners and landlords in the office, retail and industrial sectors. 

    Since then, Zinati has brought on two more brokers and is looking to expand his team further as the industry slowly works its way toward a post-pandemic future. Looking back on his decision to leave the security of an established firm for the uncertainty of life as an entrepreneur, he has no regrets.

    “I was just faced with too many limitations, so I made the decision to go out on my own,” Zinati explains. 

    “Being nimble and quick and working closely with these owners to get their spaces filled or get their buildings sold is really rewarding.”

    Zinati is one of a growing number of local real estate executives who’ve left comfortable, secure jobs at established big-name companies to start their own brokerages and advisory firms.

    Many of these owner-brokers point to the freedom of being able to make their own decisions and do their own deals without having to answer to corporate bosses as a major factor in making the leap.

    “I think commercial real estate brokerage in the boutique setting is one of the last few places where you can just earn more with a little bit more elbow grease,” says Darren Fleming, the CEO of Real Strategy Advisors. “There’s so much upside.”

    Before launching his own firm, Fleming spent seven years as managing director of Cresa’s Ottawa office. His lengthy real estate resume also includes four years as a sales representative at Colliers International and a one-year stint as a leasing agent with Montreal-based developer Canderel. 

    In 2016, Fleming sold his shares in Cresa, left the company and enrolled in the Executive MBA program at the University of Ottawa’s Telfer School of Management. 

    The following year, he launched Real Strategy Advisors, which provides advisory and brokerage services to office tenants in the tech, professional services and not-for-profit sectors.

    He’s never looked back. Too often, Fleming says, strict corporate policies at bigger firms put entrepreneurial-minded brokers in a straightjacket. He points to an example from early in his career, when an employer told him he was storing too much sales data on a company server. 

    “I think I’m addicted to being an entrepreneur and being my own boss,” Fleming says. “Are there days when you wish someone would sign off on payroll other than you? Yeah, but it’s worth it in the end.”

    KOBLE thriving

    Graeme Webster is a partner at Ottawa’s KOBLE Commercial Real Estate, a firm that brokers mainly off-market and unlisted office and industrial transactions for buyers such as entrepreneurs and well-heeled professionals looking to build up their investment portfolios.

    He and fellow partner Marc Morin founded KOBLE seven and a half years ago after cutting their teeth for more than a decade at large, well-established firms. Webster says he thrives on the feeling of satisfaction he gets from navigating clients through deals that can set them up for retirement or attain assets that can be passed on to future generations. 

    “Our focus is to help people establish that family legacy,” he says. “Real estate is really just the tool to allow them to do that.”

    Now at six employees, KOBLE recently brought Ottawa commercial real estate veteran Richard Getz on board as a senior adviser. The firm is also looking to hire someone to oversee its business operations as it continues to expand.

    Webster says that despite the overall uncertainty facing the industry at the moment, KOBLE is thriving. The firm has more deals in its pipeline than at any other time in its history, a development he attributes largely to the city’s reputation for being a safe haven in times of economic turmoil.

    “It’s a place where when there’s volatility, people want to jump in (the market),” he explains.

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