A Q&A with the CEO

On the Latest Acquisition to the Offering

We sat down with Streitwise CEO Eliot Bencuya to get his thoughts on the newest acquisition, the Allied Solutions Building in Carmel, Indiana. How this will improve the Streitwise offering for investors and what to look out for in the future.

Q: What makes this latest acquisition exciting for not only potential investors but current investors as well?

Eliot: The acquisition represents a significant step in building a portfolio of stabilized suburban-urban (also called “middle neighborhoods” or “surban”) locations office properties, particularly in secondary markets. We continue to believe that the real estate equity markets, both public and private, undervalue the stability and strength of non-gateway cities. But interest rates and debt markets are comparably strong across the board, including in non-primary metros. The combination of these two factors means that, even with a leverage point that we believe to be fairly conservative, one can still generate leveraged cash-on-cash returns that we believe to be compelling in both absolute and comparative terms. Furthermore, the acquisition bolsters our reputation as a buyer and landlord in the Midwest which itself may lead to compelling future opportunities for the REIT.

Q: What about the Indianapolis submarket of Carmel, Indiana appealed to you?

Eliot: What’s special about Carmel, and Midtown Carmel in particular, is that it illustrates the transformative power of cohesive mixed-use redevelopments in suburban settings. People love to talk about how the trend of the decade is the “the move to the city”, particularly among Millennials, but the reality is much more nuanced. Suburbs are a fundamental part of the American fabric, especially in non-gateway markets, and it’s evident that it’s possible, and in many cases preferable and cheaper, to move “downtowns” to where people already live rather than move people to “downtowns”! The urbanization of American suburbs is a trend that ties in really well with current demographics moving into the prime family formation part of their lives. Having walkable, mixed-use developments in the suburbs is the best of all worlds when it comes to raising a family.

Q: Over $310 million in public and private investments have poured into Midtown Carmel in the last decade. Where do you see the Allied Solutions Building fitting into this neighborhood?

Eliot: We see the Allied Solutions Building as a centerpiece and community hub for Carmel, around which additional development has already sprouted. We expect this trend to continue with new infill construction contributing to a vibrant neighborhood that serves as both a local and regional destination. This type of place-making builds on itself so that in the future, the “public” portion of the public-private partnership can burn off while private investment picks up steam.

Q: Now that you have two properties and $76 million in total value under management, are you currently looking for other properties to add to the Offering as well?

Eliot: Always. We’re seeking to not only further diversify the portfolio, but to create a widening moat as a prominent landlord in secondary markets. Every time we acquire a building we learn something new that helps us more efficiently operate and market existing holdings, and we want to leverage that experience across our select target markets.

Q: What’s to come for the Allied Solutions Building in 2019?

Eliot: Although we purchased the building 87% occupied, we still have a couple office suites available to lease, in addition to the ground floor retail space which is the primary place that we may create additional value. The ground floor retail is an especially fun opportunity because we get to curate the customer experience. We have a mix of spaces and look forward to being able to pick and choose from a variety of retailers and restaurateurs that will not only be beneficial to our portfolio from a revenue perspective, but also by generating the type of buzz among Yelpers and experiential consumers that create dynamism and growth in the neighborhood. Nothing wrong with national fast casual chains, but we hope to instill a more local and authentic vibe to the retail offerings as well.

Q: Thanks for your time, Eliot. What do you want to tell current and future Streitwise investors?

Eliot: It’s an exciting time for Streitwise because these are the kinds of opportunities that previously may not have not been available to all investors, accredited and non-accredited alike, without getting skimmed by the outsized commissions and fees that have plagued the traditional non-traded REIT model. To get access to commercial properties like the Allied Solutions Building, one had to either be an accredited investor and identify the appropriate syndication, or buy public, exchanged traded REITs. We’re pumped that a Streitwise can directly provide access to a property like the Allied Solutions Building to a much wider audience without the excessive expense load of the traditional non-traded REITs.