One of the internal tensions we’ve had over the past few years at Streitwise has been the tradeoff between delivering a clean outward, customer facing user interface while at the same time staying true to our core competency: investing in real estate.
We ultimately focused finite resources on our primary objective of identifying, acquiring and operating a quality real estate portfolio yielding attractive risk-adjusted returns.
We acknowledge that this focus has come at the expense of being able to develop a shiny online platform. And we could have solved this problem by raising venture capital, growing the team exponentially, and tackling everything at once. We watched as many in the fintech world did just that.
Growth at any cost. And fancy platforms.
In fairness, some of our competitors’ engineering teams have done incredible jobs with their outward facing client portals.
But we opted not to spend time or emotional energy keeping up with the Joneses, when we already know who we are and where we want to go. That’s been hard. We haven’t graduated from being human after all, and to shut off our natural desire to grow faster has been a difficult tendency to overcome. It takes effort, and a team and a culture that understands the mission.
The past several weeks have been a shock to the economy, and risk assets in particular. The fintech world is also experiencing its share of issues as startup after startup struggles in a world where revenue and risk appetite has been turned off overnight.
We are aware that others in our space have:
- Suspended redemptions.
- Suspended new investments.
- Ceased paying dividends entirely.
- Laid off or furloughed large amounts of staff.
We never predicted anything like a global pandemic, but we always wanted to stay lean and prepared for any weakness that may have appeared.
We stuck to our knitting and declined outside capital at the corporate level. Streitwise is funded exclusively by its founders as an extension of our existing commercial real estate investment business.
We are the tortoise, not the hare.
We put our heads down and push daily to:
- Patiently acquire stable, diversified commercial real estate assets. (And, importantly, pass on deals that don’t make sense)
- Cultivate an investor community that shares a similar long-term vision.
- Provide excellent customer service by improving and expanding our partnerships with shareholder on-boarding, reporting, management and leasing companies.
Today, we see our conservative approach to building a REIT – and a company – payoff.
- Despite the economic shock, we believe our rent roll is stable and well-positioned for the future.
- Our portfolio leverage is low, and we are able to cover our debt service.
- We have not furloughed or laid off a single employee.
- We are well-positioned to take advantage of the market and acquire quality assets at a discount to prior pricing.
Our commitment to investors is this: we will continue playing the long game by operating the REIT and running Streitwise with a margin of safety, because that’s what investing is about. Interim returns mean little if you can’t ride out the storms. We will collectively get through this crisis, but only a few will come out stronger.
Eliot Bencuya is the co-founder and CEO of Streitwise. Eliot has extensive experience identifying, underwriting, and executing value-add real estate investments.
Prior to forming Streitwise, he was a Vice President of Acquisitions for Canyon Capital Realty Advisors and the Canyon-Johnson Urban Funds, where he was responsible for originating, underwriting, structuring and executing transactions in the Pacific Northwest, Northern California and Midwest regions. Mr. Bencuya also held positions at Sovereign Investment Company (a subsidiary of the Marcus and Millichap Company) and the investment banking division of Merrill Lynch & Co. He holds a Bachelor of Arts degree in Economics and International Studies from Yale University, and a Masters of Business Administration degree from the Haas School of Business at the University of California, Berkeley. Mr. Bencuya is a member of ULI.