The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
Track record is crucial to avoiding costly mistakes while advising clients on investing in third party funds or sponsors. While there can be exceptions made if the sponsor has some experience in the space, it’s best to have a track record to put your trust in before bringing these first time funds to your platform. Without taking a close look at track records, you could be setting yourself up for costly mistakes that can’t be taken back.
Richard Wilson: What is the number one most painful or costly lesson you’ve learned while advising clients on investing in third party real estate funds or sponsors?
Dr. Forrest Bryant: I think, I said this earlier, I think track record. I think if it’s somebody, we get new funds all the time, and you know it makes it really easy for us to say we don’t put new first time funds on the platform. Now sometimes we do make exceptions if it’s a really experienced sponsor who has been in the same space in the – maybe it’s their first fund, maybe they have experience and sometimes we’ll make exceptions, if it’s new then we just don’t even go there. You’ve got to have a track record before you go there. But I’d say that’s a pretty big one.