NAI Global’s Olshonsky: Constantly finding new challenges in commercial real estate

Jay Olshonsky

Jay Olshonsky

by Dan Rafter

Jay Olshonsky, president of NAI Global, has worked in commercial real estate for more than three decades. And as he leads an organization with 375 offices, he’s constantly finding new challenges to overcome. Midwest Real Estate News recently spoke with Olshonsky about his real estate career, what he enjoys most about his industry and the changes coming to the business.

How did you get your start in commercial real estate?
It was more of a need than an attraction. I graduated from college in 1982. In 1982 the economy was not very stable. Interest rates were at 18 percent or 19 percent at the time. The unemployment rate was high. People were not hiring college graduates at the time. Like most people who graduated from college and couldn’t find a job, I moved home, which happened to be Washington, D.C. at the time.

My mother was working for a real estate developer in D.C. I had done some odd jobs for that developer. Eventually, I had a meeting with him. He asked me, ‘Have you ever thought about commercial real estate?’ I said that I hadn’t. I did say that I had taken principles of real estate in college, and he told me that was probably all I needed to know. But he did set me up with some appointments with real estate companies. I landed three interviews and three job offers. I didn’t realize at the time that my mother was working for one of the most prominent real estate developers in DC at that time. His name carried a lot of weight, enough to get me those job offers. In June of 1982 I got into the commercial real estate business. I’m still here.

What has kept you in the business so long?
I enjoy that it is a very diverse people-facing job. It can be a desk job. It can be based in a small town or you can be operating with a global footprint. You can be an owner or a user. You can be working on a store or with a technology company. But no matter what you are doing, it is a job where you get out in front of people. I like the change and the diversity. I like meeting with the different individuals that you get a chance to run across.

Why have you been so successful in this business?
I have spent most of my career in the D.C. and Baltimore market. I’ve spent close to 26 of them in this market. Staying in one market and really working at it does help. The second big thing is that I moved into running brokerage offices and service companies fulltime when I was very young. I was 33 and running a big office for CBRE when I was 33. I was managing brokers at a small firm outside of D.C. when I was just 27. The ability to manage people and run things at a very young age has helped me. You might not know what you are doing at first, but you do develop a vast amount of experience. It all builds upon itself. Of course, you also need to put in a lot of hard work and get a little bit of luck. This is not a 9-to-5 business. It’s more like a 24/7 business. The people who are tremendously successful are very much people who are working all the time or thinking all the time. That separates the good from the great.

How do you handle those long hours?
I come from a background where hard work is the norm. There are aspects of enjoying what you do, of course, that makes anything easier. But there is a lot of work in any industry that is repetitive but necessary. It is work that you have to do but don’t necessarily like doing. I understand that this work has to be done. You just have to figure out the most efficient way to plow through that mundane work.

It reminds me of a story that I like to tell. When I was 19 I ran into a guy who was running a dump truck. He’d come to sites and clean up the construction waste. I remember seeing him one day. A 12-foot pile of construction debris was sitting there. I watched him take every piece of lumber, old tools and everything else and throw it into his truck until the site was empty. I asked him how often he did this. He said he worked six days a week and made $100 every time he filled up his dump truck. He told me he did this five times a day. That adds up. It wasn’t a fortune. But it did allow him to send two kids to Ivy League colleges. A lot of time, succeeding is as simple as putting in the work.

What do you find most challenging about the commercial real estate business?
The most challenging thing about any business – and this is not unique to commercial real estate – is that most people don’t like change. Getting people, whether in the banking business, travel business or commercial real estate business, to understand that change is a constant is a huge challenge. The number-one thing that I complain about in this business is that people don’t understand that the world is changing right beneath them. You can moan and complain about it or you can embrace the change, work with it and make it more valuable to what you are doing.

How prevalent is this resistance to change in commercial real estate?
Real estate in general is more of an old-school business. I hear a lot of people say that they wish the business worked like it did in 1980. But it’s not 1980. I am more inclined to wonder what the business is going to be like in 2017 instead of worrying about what it was like last week. I don’t think that people in the commercial real estate business change quickly enough.

On a more personal note, what do you like to do when you’re not working?
That’s fairly easy. I live in New York City. My wife and I have been married for 30-plus years. Our children are grown. I have a 25-year-old daughter and a 28-year-old son. My wife and I live in Manhattan the way a tourist would live in New York City. We take advantage of all the reasons one would visit New York City. If we want to go a restaurant, we walk to a restaurant. We love just walking around the city and exploring new neighborhoods. I am very much into both 19th Century and 20th Century modern art, too. Being in a place like Manhattan, where you have so many amazing art museums, gives you the chance to enjoy so much modern art in one day.

I do travel extensively for my business, too. When I am in new places, I try to see something that the tourists don’t know about. I was in Oklahoma City last week. When someone asked me where I wanted to eat, I said take me to a place I don’t know about, a place that only you know about. He took me out to the Oklahoma City stockyards and I had one of the best steak dinners I’ve had in my life. And it cost $20 instead of $60.

I also like to visit my adult children. Being close to them and being close to family is wonderful. I always say that if you live in Manhattan – or any city like London or Chicago – if you are bored, you are boring. You are not taking advantage of what your city has to offer.

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Borrowers: Important considerations for debt capital decisions in 2015 and 2016

Susan Branscome

Susan Branscome

Guest post by Susan Branscome, NorthMarq Capital

Commercial real estate and multi-family property owners manage all kinds of risks owning properties: tenants, municipality regulations, operating expenses and capital expenses.

One of the biggest risks in managing a portfolio of properties is making sure the debt capital is right for properties. Most properties have 70-75 percent of the capital stack in debt so how the property is financed is important to both the success of the property and the owner.  There are many choices available today unlike the recent Great Recession.

There are many factors which impact debt capital. Capital markets shift weekly, sometimes daily. Lenders’ appetites for loan origination, where treasury yields and swap rates are, what the Fed is doing or going to do, and of course the international markets’ impact on the US debt capital market and economy. Where do you begin?

Types of lenders

The predominant lenders which finance commercial real estate are commercial banks, life insurance companies and CMBS/conduit lenders. In the case of multi-family, of course Freddie Mac and Fannie Mae play a huge role.

Commercial banks are excellent sources for financing commercial real estate during construction or renovation.   Many borrowers utilize commercial banks heavily given short-term interest rates are so low. If guaranteeing the loan and recourse are not issues, interest rates as low as 2.5-3.0 percent is very attractive. Borrowers would be wise to consider how much time is involved with submitting information to banks quarterly and dealing with extending maturities so often.

Life insurance companies are excellent sources for long-term, fixed interest rate, non-recourse debt capital to the marketplace on most property types.   2015 has been a year of life companies reaching their allocations through originating some of the highest quality, lowest leverage loans in history. This is not expected to change in 2016 unless competition enters the market causing life companies to increase the amount of leverage offered.

CMBS/Conduit lenders have re-entered the market and are offering some of the highest loan amounts on office properties and hotels. These lenders continue to struggle offering efficient and predictable origination processes, however. Today’s pool investors, especially those with the highest risk position in the pool (B-piece buyers) are scrutinizing the individual pool loans heavily, making sure loans are well structured around potential risk. Although in 2005-2007 borrowers were able to secure 80 percent financing at spreads as low as 110-120 over swap yields, living with the hassles of conduit servicers has caused many borrowers not to return.

Originate the loans with mortgage banking companies which can service these loans so you have a point of contact for future requests. As I guide borrowers in CMBS financing I tell them, “It’s the wild west in this market” and you do not know your deal until you close the loan. Make sure all future requests are outlined thoroughly in loan documents assuring that there are rights around response time by the servicer. Some conduit lenders are excellent and quite predictable and those are the ones with which we recommend borrowers enter into 10-year relationships.

The best lender for a given property will depend upon the borrowers’ tolerance for recourse risk, interest rate risk and leverage expectations. It is always a good idea to spread portfolio debt capital among many lenders so as not to be subject to the investment whims of one. Attitudes toward commercial real estate by lenders can change over time and more lender relationships are better.

 Loan term and amortization

Commercial banks offer construction loans, mini-perm loans, swap contracts and longer-term loans. Some banks even offer non-recourse loans although borrowers would be wise to look closely at loan documents assuring these are truly non-recourse loans. Conduits typically offer 10-year terms, and many have non-recourse bridge programs for interim financing and for those properties requiring additional funding for tenant finish and capital expenditures.

Life companies offer a wide variety of loan terms depending upon their sources of funds. Five-year, seven-year and 10-year terms, up to 20 to 40 year fixed rates are available today.   Rate resets are available also, 15-year loans with five-year rate resets are in the market.

Loan amortization depends upon borrower preference as well as lender requirement.   Some borrowers want to pay down loans as quickly as possible, others want as long an amortization as possible. 30-year amortizations are typical for conduits. Many conduit lenders are offering interest only for a portion of the loan term.   Life companies will offer typically 25 to 30 years on multi-family, unless there is some attribute of the loan leading to a shorter amortization request.

Float-to-fixed rate loans are available by long-term lenders giving borrowers the flexibility to float at low interest rates and lock long-term interest rates when they are ready.

Important loan provisions during the loan term

Most long-term loans have prepayment protection meaning there is a cost associated with paying loans off before the maturity dates. In recent years, borrowers have been dissatisfied with how high prepayment premiums have been on their existing loans as a result of significantly lower treasury yields than those present at the time of origination.

The opposite is expected to be true in the future. For example, if a borrower locks an interest rate at 4.5 percent, and rates rise as expected, prepayment premiums can be much lower, especially with a shorter remaining loan term. Conduit loans offer defeasance as a form of prepayment, which means substituting an alternative security instrument to real estate, US treasuries. Just like bank swap contracts, with defeasance there is a chance if rates rise enough, loans can be paid off at discounts. Many life companies can also offer stepped down prepayment such as 5 percent during a given year, dropping 1 percent per year thereafter.

Make sure you have assumption rights, and the ability to transfer among partners. Understand that lenders want strong buyers with good financial wherewithal and the ability and willingness to manage the properties. There will not be an automatic approval of the loan assumptor when the property is sold.

Request the allowance of second mortgage financing which offers the ability to use debt capital to fund property improvements. While many lenders prohibit junior liens, others may be open to this possibility.

Freddie Mac and Fannie Mae have excellent supplemental financing programs allowing borrowers in the future to secure more debt capital on properties as a result of value increases and amortization.

Future plans for property

Consider future plans for properties. Is the plan to hold the property? Sell it? Cap rates have dropped yet will probably rise with increasing interest rates. The property’s mortgage loan can be a critical part of the sale. If there is no loan prepayment premium, this can be a positive for all-cash buyers. As the maturity date is approaching, and refinancing is chosen, make sure the property is ready to finance based upon leverage level, strong leasing with staggered lease expirations and capital needs are addressed—all of these are important to lenders. Make sure that not more than 20 percent of the portfolio comes due in any one year mitigating the uncertainty of any one debt capital market.

The sale of a property may cause tax consequences even with 1031 exchanges in which the capital gains are deferred.   With debt, there are minimal tax consequences through a refinance or refinancing after a 1031 exchange occurs.

Leverage level

Naturally the lowest interest rates are available for the lowest loan-to-value ratio deals, typically offered by life insurance companies. Lower leverage on the property though can be an issue in a future sale of the property during the loan term.   The loan will have prepayment protection. While a lower than market assumable interest rate can enhance the sale of the property, a purchaser will need more equity to accomplish the sale limiting the universe of potentially interested buyers. Consider this as you are leveraging the property, perhaps it is better to leverage the property to a maximum level even if the interest rate is higher.

Conduit lenders are offering up to 80 percent LTV loans on the best multi-family properties. Mezzanine debt is also available today, allowing up to 85 percent overall financing.

Interest rates

No one really knows which direction long-term interest rates are going and when. As it has been said, “Nobody is smarter than the market”. If the interest rate works, lock it. While we have experienced a recent rise in treasury yields, interest rates are among the lowest in history and it is a mistake to take them for granted. If a borrower plans to hold the property and wants to manage interest rate and recourse risk, lock the interest rate. Should the choice to sell the property in the future occur, the assumption clause or prepayment options allow this. Borrowers should choose the leverage level they want in a property, then lock the interest rate for as long as possible. This allows them to manage future cash flows in the property without worrying about increasing interest rates.

2016 is an election year and during the past thirty years, interest rates have remained stable during election years or shown slow, small declines during the year. Many borrowers continue to maintain low, floating interest rates with banks at 200 basis points lower than long term rates. The Fed will ultimately increase short rates. The gap between short rates and long rates will probably narrow.

Recourse vs. non-recourse

It has been surprising that despite low short interest rates, borrowers continue to guarantee loans. The incidents of lenders using borrowers’ loan guarantees during the downturn as leverage for loan principal reductions and other matters are fading from borrowers’ memories. Property owners would be well advised to manage recourse similar to managing interest rate risk. Manage contingent liabilities through financing debt when possible on a non-recourse basis. Banks want recourse on loans, yet they also expect borrowers to have a manageable global portfolio liability level.

2016—what to think about

We have refinanced many loans prior to maturity, often with the incumbent lender.   These old interest rates often start with a six. Many lenders offer forward commitments and the ability to lock interest rates now, mitigating future interest rate increases. Any loan prepayment premium can be added to the loan proceeds with the new loan or the prepayment could be embedded in the new interest rate. The amount of time it takes to pay back this prepayment can make a lot of sense. If borrowers have maturities upcoming during the next two years, it’s not too soon to consider refinancing early.

Remember, a record level of loans are coming due in 2016 and 2017. Lenders will be refinancing loans in their portfolios and will consider these new loans counting toward their budgets. The result will create less demand for new loan opportunities and affect receptiveness to new loans. Also borrowers who have previous relationships with lenders are given priority.

The commercial real estate debt capital market is complex and ever-changing. There are many choices of lenders, types of loans and loan provisions. Seek help from a trusted mortgage banking professional to guide you.

Susan Branscome is managing director of NorthMarq Capital’s Cincinnati office.

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Grandbridge Real Estate Capital’s Kegg: Financing deals coming at a faster clip

Craig Kegg

Craig Kegg

by Dan Rafter

Craig Kegg, senior vice president and office manager with the Columbus office of Grandbridge Real Estate Capital, says that his office is seeing an ever-increasing number of financing requests. Consider it yet another sign that the commercial real estate market continues to strengthen.

Midwest Real Estate News: How busy is Grandbridge today when it comes to financing requests?
Craig Kegg: We definitely are busy today. I have been excited – we’ve been excited as a company – by the velocity at which deals are coming in. Specifically, here in Columbus we are getting many more requests this year than last.

MREN: Why do you think there has been so much activity?
Kegg: I believe that we are seeing more activity largely because of the interest-rate environment. We are seeing more activity, too, because of where we are in the cycle of borrowers and in the cycles of the different asset classes. In the Midwest we are seeing folks asking us for more long-term money. The standard is a 10-year term. We have had more requests for 15-year, 20-year, 25-year and even in some cases 30-year money.

That is a direct reflection of where the borrowers are at. We have some members of our borrowing population who are now getting to the fall or winter of their cycles or their careers. They are looking to basically move from a creating-wealth approach to a sustaining-wealth approach. If they are able to fix their costs of capital for a long period of time, longer than 10 years, that’s what they want to do. The low interest rate environment has caused people to think longer-term when it comes to their investments.

MREN: Where are you seeing the most lending activity today?
Kegg: We have seen a lot of activity in the apartment sector, as I am sure everyone else is seeing. All of the boats are rising now thanks to the strength of that sector. Our office sector is getting stronger. The industrial sector is coming back. Couple that activity with the low interest rate environment, and it’s clear why we are seeing more activity today.

MREN: What do you look for when deciding to which borrowers to lend money?
Kegg: The quality of asset continues to be a main driver. Often times, the quality of the asset also speaks about the ownership group or the sponsor. Has the building been maintained? Are there ongoing programs to maintain the property? Location also comes into play. In Columbus we have seen a resurgence in center city locations. That doesn’t mean our suburban locations aren’t being positively looked at, too, though.

The other things we like to see when evaluating a financing opportunity are the more obvious ones. We like to see a strong operating history on the part of the borrower. We like to see rents that are at market level. We look for a historical performance without a lot of ups and downs. All of those things speak to the project themselves and the sponsorship and how they approach their business.

MREN: When you look at the Columbus market, is there anything that makes it a special market, that sets it apart from other Midwest markets?
Kegg: First and foremost , as a citizen of Columbus, I have to say that we don’t do a very good job of selling the city. And we haven’t done a good job of doing this for a long time. We are getting better, but we are nowhere near as vocal as we should be about promoting Columbus. That said, there are several things that are attracting both buyers and capital here. There is the stability that Columbus offers. We are also the state capital. We have a number of really strong economic corporate citizens here, such as the Limited Brands, The Ohio State University, Nationwide Insurance and Cardinal Health. We have a very stable economy.

The university is a real benefit to working in this city. We are fortunate to have a constant rotation of new talent coming into the city because of the university. The new talent brings fresh ideas to the city. There is also an energy in our city because of the student population. Now that the city has matured and we have started to provide new amenities, we are more appealing to the 22- to 33-year-olds. We are now starting to retain more of that talent in the city. In the past, folks would graduate from the university and leave town. But now we have a nice mix of Millennials in our city.

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YardiMatrix: Average apartment rents rising rapidly

rent growthby Dan Rafter

The multifamily market is showing no signs of slowing down, at least according to the latest data provided by YardiMatrix. That’s good news for landlord, but not the best for tenants struggling to find affordable apartment units.

The company’s June rent survey found that apartment rents hit an average high of $1,150, an increase of 6.3 percent from June of last year.

Rent growth is actually accelerating, according to YardiMatrix. The company reported that national apartment rents grew 1.3 percent from May to June and 2.9 percent during the last three months. In 2014, rents only grew 1.1 percent from May to June and 2.3 percent during the three months of April, May and June.

The Midwest didn’t make the list of the hottest rental markets. Portland saw its year-over-year apartment rents jump 15.1 percent to top the list, while Denver (12.4 percent), San Francisco (11.6 percent) and Sacramento (11 percent) also saw big year-over-year increases.

Only six U.S. markets failed to see apartment rents grow 4 percent from June of 2014 to the same month this year. One of these markets was in the Midwest, Kansas City, where apartment rents grew 3.5 percent from June of last year to June of this year.

Posted in Kansas City commercial real estate, Kansas Commercial real estate, Missouri commercial real estate, multi-family | Tagged , , , , | Leave a comment

Michigan metro areas becoming friendlier to walkers — but there’s still a long way to go

This graphic charting average rents in the Grand Rapids area shows how rents can rise in neighborhoods that are walkable.

This graphic charting average rents in the Grand Rapids area shows how rents can rise in neighborhoods that are walkable.

by Dan Rafter

Landlords trying to attract tenants to their buildings are increasingly focusing on how walkable their surrounding communities are.

Consumers who are renting because they want to — not because they can’t buy a home — want to live in neighborhoods in which they can walk to public transportation, shops, restaurants and movie theaters. They want to ditch their cars in secure parking places for weeks at a time. Many don’t want to own a car at all.

That’s why a new report — The WalkUP Wake-Up Call: Michigan — is such good news. The report, released on June 23 at the LOCUS Michigan Leadership Summit held by the George Washington University School of Business in partnership with Michigan State University, said that there is a pent-up demand for walkable urban multifamily developments throughout the state of Michigan.

Grand Rapids and the Detroit-Ann Arbor region are leading the way in creating new walkable urban places — which the report calls WalkUPs — in the state. And other regions of the state are slowly following their example, creating urban neighborhoods in which residents can rely more on their feet than their cars.

The report looked at the top seven metropolitan areas in Michigan: Detroit-Ann Arbor, Grand Rapids-Muskegon-Holland, Lansing, Jackson, Kalamazoo-Battle Creek, Saginaw-Bay City-Midland and Flint. Researchers found 46 WalkUPs in these areas.

According to the report, Michigan metro areas are moving away from drivable suburban development, long the dominant form of development here. Unlike WalkUPs, drivable suburban developments are associated with the automobile.

There are benefits to developers who build in walkable neighborhoods. According to the report, apartments rent for higher per-square-foot prices when they are located in a WalkUP instead of a drivable suburban location. The same is true for home prices. The data on rents for office and retail spaces are more of a mixed bag, with walkability not having as much of a direct impact on rents for these spaces.

“It would have been unthinkable 15 years ago that these metro areas within Michigan — the center of the car and truck manufacturing industry — would have seen any form of investment and development in walkable urban places,” said Chris Leinberger, professor of LOCUS and chair of the George Washington University School of Business, in a written statement. “The shift to walkable urbanism presents the opportunity for real estate developers, investors, land use regulators, public sector managers and residents to create economic opportunities while achieving environmental sustainability.”

Even with the development of more walkable areas, Michigan still has a way to go in becoming a more walkable state. According to the report’s authors, national polls have shown that up to half of the country’s population wants to live in a walkable place, but only 8 percent of the total housing stock in Michigan metro areas is walkable.

The report ranks WalkUP areas according to a variety of factors. Top platinum level WalkUPs in Michigan include downtown Birmingham and Main Street—Ann Arbor. At the other end of the spectrum, on the lowest copper level of WalkUPs, are areas such as downtown Dearborn East and downtown Bay City. These WalkUPs have the potential to become more walkable urban places, but need public support and/or a pioneering developer to realize these potential.

Walkable neighborhoods can come with a cost. The report notes that often when developers bring in the new housing, retailers and entertainment options that make up walkable urban neighborhoods, they displace long-time residents who can no longer afford the higher apartment rents and housing prices in these areas.

“We’re seeing many of the walkable urban places across these Michigan metros offering a strong combination of both economic opportunity and affordability compared to the drivable suburbs,” Gary Heidel, chief placemaking officer at the Michigan State Housing Development Authority, in a written statement. “However, as walkable development continues to grow, this may generate concerns over gentrification and displacement of low-income residents. Establishing plans in advance of this gentrification to preserve affordable housing is critical.”

How to provide a boost to Michigan’s overall walkability? Money will help. The report says that local leaders need to call for more investment in public transportation. Investment in rail transit throughout Michigan — a large need right now — is also key, according to the report.

Posted in Ann Arbor, Detroit commercial real estate, Michigan commercial real estate, multi-family, office, retail | Tagged , , , , , , , , , | Leave a comment

Powered by industry vets, St. Louis’ Selequity ready to make its mark in real estate crowdfunding arena

Mark Burkhart

Mark Burkhart

by Dan Rafter

There’s a reason why real estate crowdfunding platforms generate so much attention: Real estate is a proven investment. And until recently, it was out of the reach of most investors.

That is changing. St. Louis-based Selequity is the latest example.

AJ Chivetta

AJ Chivetta

The founders of this newest commercial real estate crowdfunding platform debuted Selequity in May during the TechCrunch Disrupt conference in New York City. Selequity is the first CRE crowdfunding company to participate in the tech conference’s Startup Battlefield, where about 30 new companies competed before venture capitalists for the Disrupt Cup and a $50,000 prize.

Selequity didn’t win this prize. But the founders of the company — AJ Chivetta, Selequity’s chief executive officer, and Mark Burkhart, a founding partner — said that the fact that Selequity was chosen to compete proves that CRE crowdfunding is an important tool today.

“Investors are looking for new ways to invest their money,” said Burkhart, former chief executive officer of Cassidy Turley. “They aren’t satisfied by just investing in the stock market, bonds or traditional investment vehicles. This allows them to invest in commercial real estate. Before, they many investors didn’t have that opportunity.”

Here’s how Selequity works: It’s an online platform connecting accredited investors to professionally operated, private real estate investment deals. Several investors can pool their money together to own portions of these commercial real estate properties.

The owners of these buildings can provide documents and building information to accredited investors through the online platform, giving these investors the tools they need to make educated investment decisions. Once they have invested their dollars, investors can then use Selequity’s online tools to manage the performance of their commercial real estate investments.

“There is a pent-up demand for alternative investments,” Chivetta said. “This is especially true for invstments in real estate, which over time have proven to be very solid investments. It has been very hard for people to access this investment opportunity. Now, through crowdfunding, commercial real estate investments can be open to so many new individuals.”

The team behind Selequity has plenty of experience in commercial real estate. Team members worked together at the former Cassidy Turley, building that company into the national firm that today operates as DTZ.

In addition to Burkhart and Chivetta — who, as a partner with the St. Louis office of law firm Armstrong Teasdale, was a member of Cassidy Turley’s legal team — the founders of Selequity include Bill Florent, former chief financial officer of Cassidy Turley, and Maria Desloge, also of Armstrong Teasdale.

Together, these founders managed more than $100 billion in real estate transaction volume and led more than 4,000 real estate professionals in 60 offices across the country.

Parker Condie, president of Coin Acceptors, Inc., a point-of-sale technology company, is also a founding member of Selequity.

“Our team has been together for a long time,” Chivetta said. “To succeed in real estate crowdfunding, you need to understand the investor side and the operator side. We do. We know how deals are put together. If you track the history we all had with Cassidy Turley, you know that we were diligent about the kinds of properties and real estate we wanted to be associated with. We are still diligent about that.”

Burkhart said that Selequity is ready to offer its first commercial property to investors through its online crowdfunding platform. The company will announce this property sometime this summer, Burkhart said.

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OneVillage Partners — with a big assist from Twin Cities CRE community — making a big impact in Sierra Leone

John Breitinger, vice president of investment and development at United Properties, in Sierra Leone in 2013.

John Breitinger, vice president of investment and development at United Properties, in Sierra Leone in 2013.

by Dan Rafter

Before he ever made his mark in Minneapolis’ commercial real estate industry, Jeff Hall seved in the Peace Corps in Sierra Leone in Africa.

Hall lived in Sierra Leone in the late 1980s for two years, spending most of his time in the village of Jokibu. He then returned to the Twin Cities to start his successful real estate career. Today, he is the founder of Ursa Investors, an industrial real estate firm that does business in Minnesota and Wisconsin.

But Hall’s time in Sierra Leone changed him. He felt connected to the country, and had made friends during his time there. In 2004, he returned to the country. Once there, he discovered that the village in which he had lived during his Peace Corps days had been destroyed because of war.

Hall decided to help.

“I wanted to help them get going again,” he said.

Hall raised money from family members and friends to help the people of the region rebuild their homes and their community. And once he did this, Hall decided that he didn’t want to stop helping. He formed the Minneapolis-based non-profit OneVillage Partners in 2007. Since that time, the organization has provided money to help bring clean water to Sierra Leone villages and help send Sierra Leone children to college.

The organization’s members have worked alongside Sierra Leone villagers to build latrines and develop agricultural programs.

“We have a long-term commitment to this country,” Hall said. “We are there for the long run. And it’s not about us doing everything for these people. It is about us working with them to make the residents of Sierra Leone self-sufficient. The residents are the ones making the changes and taking the steps to improve their living conditions.”

Real estate support

The commercial real estate community in the Twin Cities has been a big supporter of OneVillage Partners, not surprising considering Hall’s own background in the industry.

For the last three years, OneVillage Partners has organized a breakfast meeting with commercial real estate professionals to help raise funds for the organization. This year’s breakfast, the fourth, will be July 22 at 7:30 a.m. at the Minikahda Club just west of Lake Calhoun in Minneapolis.

Hall said that the commercial real estate community has been incredibly supportive of OneVillage Partners. He expects that 30 to 35 companies involved in the commercial real estate business will have signed up as sponsors of the breakfast by the time July 21 rolls around.

Hall said that the real estate breakfast raised $25,000 its first year, $35,000 in its second and $50,000 last year. The goal this year is for the real estate breakfast to take in more than $75,000. Hall said that he expects more than 100 people to attend the breakfast.

Brian Carey, from United Properties, and his wife Jaclyn in Sierra Leone in 2013

Brian Carey, from United Properties, and his wife Jaclyn in Sierra Leone in 2013

Hall described the annual breakfast event as a combination of a networking event and presentation about OneVillage Partners and fund-raising.

“Real estate folks tend to travel a lot. They really enjoy seeing their friends at this event,” Hall said.

Hall said that it makes sense for members of the Twin Cities commercial real estate community to be such strong supporters of OneVillage Partners.

“As real estate people, we are trying to help our communities develop here,” Hall said. “We want to provide quality spaces here where people can live and shop and work. That spirit translates into wanting to help these other communities in Sierra Leone build their own spaces to do the same.”

John Breitinger, vice president of investment and development at United Properties, and Brian Carey, executive vice president at United Properties, traveled with Hall in late 2013 to Sierra Leone.

Breitinger said that he went on the trip to determine what economic development efforts really work. It was a way for Breitinger to learn what approaches might work when it came to economic development work in North Minneapolis.

“More than anything, I have been inspired by how much one person’s persistent initiative has improved lives,” Breitinger wrote in a e-mail message describing his trip.

As Breitinger wrote, he and Carey visited villages in Sierra Leone that sat just a few miles from the start of a deadly Ebola outbreak in West Africa. The villages here, though, were among the least-impacted in the region. Much of the credit goes to the clean water and new latrines that OneVillage Partners helped bring to these residents, Breitinger wrote.

“Simply being set up with a culture of collaboration and problem-solving kept these villages largely healthy and intact,” Breitinger wrote. “There are many great leassons here.”

Hall travels to Sierra Leone about once a year. During these trips, he gets to see the good that his organization — fueled in large part by the Minneapolis/St. Paul real estate community — has done in the country.

“We have helped bring 100-percent clean water to some of the villages,” Hall said. “That has made a huge difference. People were getting sick so often before. They have built latrines, which also helps to reduce germs. We are helping to send hundreds of more kids to school. Some villages have had 15 to 20 kids go to college. It is rare for any kid to go to college. We’ve made investments in agricultural development and income generation. It is inspiring to be able to go back and see some of these changes.”

For more information about OneVillage Partners, visit the organization’s Web site at

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