12 Dec Lupert Lessons
I was fortunate enough to attend an event with DC’s “The Real Estate Group” last week. During the dinner, Dean Adler, founder of Lubert-Adler Partners LLP, spoke to all attendees about some of his principals for investing. I thought many of them applied well to Scheer Partners and what we are trying to do with our acquisition and development platform.
Partner with Experts – Mr. Lubert said when he began to grow his company, his strategy was to develop close relationships with 2-3 excellent partners in each major US market. He believed that these local partners would always beat out two analysts from global firms who simply parachute into a market to execute a few deals. Deep knowledge of a specific market or product type are invaluable to him.
At Scheer Partners, we are an elite sponsor for any project in Montgomery County and any lab/biotech related project nationwide. Understanding our area of expertise and continuing to bolster that specific knowledge will continue to give us a competitive advantage over our competitors.
Learn from mistakes but MOVE ONE – Mr. Lupert lost a lot of money in the 2008-2009 Market Crash. He was in a daze for months just trying to see where he went wrong. He had recently developed a community of vacation homes that had been wildly successful but when the crash happened that investment went bust. Mr. Adler developed a new game plan based on new market realities. He went to equity partners such as university endowments who still had money to spend and convinced them the time was now to invest with him. These investments are a big part of why he is successful today. He learned from his mistake of investing in “discretionary assets” towards the end of a real estate cycle and immediately moved on.
At Scheer Partners we have successfully executed many projects in the DC Area. But there have been some investments that haven’s been home runs for one reason or another. A few things that we are very conscious of when investing now are realistic market rent growth, supply and demand factors that could impact the related job markets, the appeal of each unit in the project and where in the cycle we are for our specific product type. Learning from past mistakes has made us much stronger developers.
Reputation and Trust is Everything – Everyone involved in an investment must have complete trust in you as the general partner. Your word and ethics are everything. When Mr. Lupert went back to investors after the market crash, he says that the reason they invested with him was because of a long track record of being a faithful steward of their money. He may have been able to get a few deals done here and there without being an honest and ethical partner but his relationships would have suffered and he would not have been able to grow his business
At Scheer Partners we have had a reputation for not only getting results but for treating all of our partners honestly and with the highest ethical standards. We have had a presence in Montgomery County, MD for almost three decades and would not have been able to sustain this track record of success if we hadn’t built long term relationships based on trust.
Thanks again to the DC Real Estate Group for hosting a great event and Mr. Lupert for giving a valuable talk.
Posted by Matt Brown, Acquisitions Analyst