GI282: Commercial Real Estate Investing and Advisory with Whitney Ward

GI282: Commercial Real Estate Investing and Advisory with Whitney Ward

Whitney Ward founded her firm, CRE Endeavors, in 2019. Since then, Whitney has advised multifamily and single-family rental operators and intermediaries on more than 20 acquisitions and dispositions and evaluated more than $1 billion in multifamily, single-family rentals, and mixed-use retail investments.

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Transcript:

Charles:
Welcome to another episode of the Global Investors Podcast; I’m your host, Charles Carillo. Today, we have Whitney Ward. She founded her firm, CRE Endeavors, in 2019. Since then, Whitney has advised multifamily and single-family rental operators and intermediaries on more than 20 acquisitions and dispositions and evaluated more than $1 billion in multifamily, single-family rentals, and mixed-use retail investments. Thank you so much for being on the show!

Whitney:
Thank You for having me. I’m excited for this conversation. Yeah,

Charles:
No, it’s great. Please let our audience know a little bit about yourself, both personally and professionally prior to forming your current firm. Yeah,

Whitney:
So <laugh> that journey is, is a long one, but I’ll make it, I’ll make it as short as I possibly can. My background, I, I actually grew up in the DC, Maryland, Virginia area. Went to school at George Mason University. While at George Mason I played division one basketball. So I had an opportunity to play at, you know, the NCA level. And after graduating I spent some time, you know, how most people go straight into the corporate sector. So I started my career in leadership, sales, marketing and management roles. I was with, you know, fortune 500 companies, Coca-Cola Enterprise and actually Coca-Cola is what kind of moved me down to Atlanta in the sense of, you know, looking for an opportunity to grow my career. And so I was, you know, initially at the beginning of my career I was looking at you know, doing that nine to five at corporate route, right? And, you know, having a 401k and then, you know, at some point retiring. And as I, as you know, accumulated more information about, you know, just the reality of of, of finance and where I was I knew I needed to do something that was gonna give me an opportunity to really grow to where I wanted to be. So

Charles:
Why did you choose real estate as your investment vehicle? I always ask people, ’cause there’s so many different ways you can go as you know, from going from professional, a corporate W2 into something different. Why would you choose that as your, your vehicle?

Whitney:
Yeah. So there was two reasons. One, the main reason and it was also why I chose multifamily, is it’s, one, it’s tangible, but then multifamily because when you think about what we need to survive, you need housing, food, water, shelter. So it was like, you know, what, what could, what investment vehicle could be proven over market cycles? And then that what led me to real estate. The other thing was in real estate there was so many different ways you could be involved in it. And I know we’ll talk about this later, but I started my career in the brokerage advisory sector space first to learn the asset and, and help people make money in the asset before I, you know, really dove in it from a, an investment side on my, on my end. So

Charles:
When you were doing that, how did that transition kind of work for you? Mm-Hmm. <Affirmative> and how did that kind of migrate its way over to what you’re doing now?

Whitney:
Yeah, so the reality was I came from corporate. I knew business operations, I knew hiring, I knew how to execute profit and loss and, and, and all that. But, you know, the reality was I, real estate wasn’t my expertise at the time. So what I focused on first was getting into brokerage, learning the investment from a less risky perspective or position. And then I dedicated all that time really into investing into my education. So I started learning really how the capital stack worked, how to really evaluate deals and what made a deal a good deal versus a bad deal. I learned from other people’s mistakes, to be honest with you. I’ve seen, you know, people buy bad investments and, and, and learned how they did that or why, why those ended up being bad investments. And then as I gained more knowledge in those spaces, I was able to then be, bring value to, you know, the pri you know, like you mentioned earlier, like the developers and the private equity firms that I’ve helped in the past acquire or divest from investments. So it was a, you know, for me it was like, okay, you know, you don’t know what you don’t know, so you need to learn this space, right? And dedicate that, that time into this space. And then as you grow in this space, you’ll find out ways to bring value to other investors and then build your career from there.

Charles:
Yeah, that’s really interesting because I find a lot of people in this space have never, aren’t in real estate beforehand. When they’re getting into syndications, they’re coming from a completely different field. And it was one of my partners that brought it to my attention. He’s a, a broker and he was telling me, he goes, most of these people are coming from a whole different field. You have some people that are in real estate already and then they’re going into syndication. So it’s a great way of you learning, really learning the, the business from the bottom up going through brokerage. ’cause I always find that there’s, with most brokers, even commercial ones, there’s some little disconnect between, you know, the brokerage side and the investment side. And if someone’s actually an investor that’s on that brokerage team or vice versa, it changes I think how they’re looking at the deal and more through your eyes. And I think it’s not just ’cause they’re giving you numbers and you’re like, well, you know, that’s not true <laugh>. Right? Exactly.

Whitney:
That’s well in, in, in all fairness, ’cause I’m a broker in all fairness, it’s your, your job is to sell the deal, right? So, you know, you, you, I always, the the the ones that really care are the ones gonna write that check and you’re gonna, you’re gonna double check all that stuff. So yeah,

Charles:
So <laugh>, it, it’s, it’s, it’s literally, I was selling a property years back, a portfolio and of a properties am they were sending out and they would send me a copy of the performer, what they’re putting it out. And I was like, you know, like, really these rents are achievable, but there’s has to be such a massive value add, you know what I mean? And I understand they’re getting the best price for me, and that’s the best thing. But, you know, just thinking about that, ’cause now you have to look, you look through that other lens when I’m on the other side of that table and then you’re like, okay, this is like, I really have to verify all of these numbers with what I’m willing to invest into the property. So just to, you know, obviously everybody’s, you know, has their own niche of what they’re doing within this huge real estate realm of investing.

Whitney:
Yeah. There’s so many people with different I guess, positions in the deal and motivations as well. So Yeah,

Charles:
For sure. So give us an overview right now of your, your firm, CRE endeavors what you do there and how you help out other people. Yeah,

Whitney:
So like you mentioned earlier, we launched in 2019. I prior to 2019, I was a real estate broker at KW commercial. And then I shifted and started my own independent brokerage firm to allow me more flexibility in what I was really trying to build with the firm, which was an advisory and consulting investment real estate investment firm. So in the early years of CRA endeavors, we, we spent a lot of time brokering transactions, whether it was helping private capital acquire multifamily and single family residential investments or we were advising on the dis the, the exit of the deal. And a lot of times that meant that we were, you know, repositioning the asset in some asset management or property management consulting role and then transitioning into a disposition. So that’s how we, we first started. And then after I spent a a short time for a year with a small private equity firm based in New York.

Whitney:
They did a lot of pre IPO venture capital investing, but they wanted to grow out their commercial real estate division. So they brought me on as director of acquisitions. And during that time they ended up acquiring two deals, but it was during the higher interest rate you know, growth. And so it, long story short, it did not work out, but at that moment you know, seeing the, you know, seeing how the market was shifting I was like, okay, well, you know, I know my markets, I, I’ve advised, you know, capital on, on a number of deals and, and where the market is now shifting, there’s an opportunity as a buyer, you know, how can I add value? And then this is what led to me launching my fund, which is focused really on the preservation of workforce housing, and then also has a component of offering co GP joint venture equity into those deals with along with emerging sponsors that are local to the markets.

Charles:
Yeah, that’s great. I have to say one thing in preparation for this episode, I was on your website and I was reviewing everything and it was, you have one of the most detailed criteria strategies honed in, that’s something we provide to our investors. We have a sheet that we provide to potential new investors that kind of outlines everything, but it was very detailed on how you did it. And do you mind just giving us a little bit of an overview, because you have a lot of people that say throw around like COG P and really what they’re doing is incorrectly just bringing cash to the deal from their investors. You guys have a whole kind of, I guess a whole thing like in suite that you’re like bringing into a sponsored deal. Can you kinda let us know exactly what other services that you’re providing, obviously your brokerage knowledge and everything like that, that goes along just besides the capital.

Whitney:
Yeah. So just to touch on the first part of your question, the reason our strategy or to emphasize the reason that our strategy is so specific is, this is fun one for me. I have experience in multifamily, that’s what I’ve been doing the last 10 years. So you know, I wanted to, for fund one provide a very detailed investment strategy. So, you know, initially, you know, when someone launches a fund, most people say it’s a blind pool or whatever. I would, ours is arguably not blind at all because we’re very specific on the types of deals that we’ll invest in. And as, as it pertains to the cog or joint venture equity you know, for those listening, if it’s a, you know, your typical GP LP structure we would come in at that, you know, normally the GPS bringing five to 10% to the deal, we would participate in that five to 10%, and then we could then also bring in our LP relationship equity that would then come in at that 90%. In addition to that value, we also which I know we’ll talk about later, but we have development closeout services that we’ve done on behalf of institutional and developers, which has provided us project and construction management experience and resources. And so there’s a, we could also help on the renovation and construction management side for value add strategies that we invest

Charles:
In. Yeah, no, that’s great. And you’ve, I I thought it was you’ve put it down to three different markets that you guys focus on three different states, is that correct? Yep.

Whitney:
Yep. Georgia, Tennessee, and South Carolina, everything’s within, like, we’re headquartered in Atlanta, so we want it to stay within a four hour radius of, of, of Atlanta. Yeah.

Charles:
And I think it becomes, I see investors as much more serious, the more fine tune and specific their investment criteria, you know what I mean? When these, it started like really wide and you’re like, I mean, how do you even, you know, how do you even close a deal if it’s like on so many different markets or something like this? I mean, there’s, how would you even know about these different markets? You know what I mean? So exactly <laugh>. But when you’ve really, you know, when you’ve really kind of drilled down to where it is, then we’re like, oh, wow, this is like, you, you guys really put a lot of thought on that. And you’ve obviously done a lot of deals because when I look at the different requirements you have for the people you’re partnering with, how the management is structured I mean, everything like that, it just goes to show, I mean, how, how kind of, you know, precise you guys are with how you’re finding deals.

Whitney:
Yeah. I think it’s better to just be what we’ve been, you know, experts in your space. We can mitigate risk for our investors and we can do good deals.

Charles:
The one thing also, as you mentioned earlier, is about the blind fund. And this is one reason I’ve, I’ve passively invested in funds before. We’ve never done one as a gp. And I think the one thing I didn’t like about that passively investing is there is because I’m investing, let’s just say in March, and it’s gonna close out at the end of the year, and I don’t know what the rest of the year has after I put my money in, right? And are we, you know, are we just writing checks in October and September, or are we actually like really underwriting these deals? And that’s always kind of like my worry. So like you having such a specific niche makes it a little bit more comfortable, I would think, for the LPs putting money in knowing that, listen, if it doesn’t check these boxes, like money’s come back. And usually you don’t have that specific of criteria.

Whitney:
Yeah. And, and that’s, that’s where I wanted to d differentiate myself from.

Charles:
So Whitney, you guys do a lot of underwriting. You’ve reviewed over a billion dollars in deals. I mean, the last years you started your firm in 2019, it’s obviously been, it’s been pretty rocky here. To say least I argue

Whitney:
That I’ve been through like three market cycles, pre covid, covid, and then post Covid, and then now maybe whatever we’re moving into now, <laugh>,

Charles:
So over that, those years, I mean, how, let’s just talk like here more recently. I mean, how is your underwriting kind of evolved coming into where we are now at the end of 2024, going into 2025? Yeah,

Whitney:
So what, right now everything’s focused on the funds kind of things, focus on the fund’s kind of mission and target. So a lot of what we’re underwriting now are opportunities where we see that we can you know, add value to the property through either operations or there’s some debt maturity, financial stress by the owner operator or the, you know, operationally are having challenges. And we can come in, add value increase, you know, increase rents, but we’re pre preserving rents within HUDs 80 to 120% ar area median income. So we’re only really growing rents 3% or 5%, depending on the market, pretty flat. So things are very conservative now. We’re, we’re still targeting anywhere from 20 to 22% project IRR on deals. But we’re also making sure that doesn’t mean we have to raise rents 10 to 20%. And we can, you know, kind of accommodate in that preservation of attainable housing. So

Charles:
I wanna talk about that kind of deals you’re seeing across your desk down. I’ll, I’ll tell you just for, I was talking to another fund manager a couple weeks back. And one thing I was saying that I was seen over the last couple months from whether people are sending out stuff to, for an LP position or people are sending stuff out to cog P on or whatever it might be. And I see a lot of deals coming out that aren’t true value add deals. And I see people that got stuck with these two, well, not really stuck with ’em, they invested into ’em in like 2021 in these low interest rate environments. And there wasn’t really, the business plan was really raising rents. It wasn’t really value add. And I’m seeing that now where people are, we’re just raising rents, like a little bit money here a little bit.

Charles:
And I, I mean, a lot of these markets that you’re talking about that we invest in as well, are very resilient right now. And it’s actually with all this new inventory coming on, which is great and makes you feel really secure as the asset class you’re in, however, I mean, I wouldn’t want to go into a business plan that’s really just taking rents from where they are now to quote unquote market. So what are you seeing for deals right now that are coming across your desk and you know, what, what, like, how are people approaching these, I guess?

Whitney:
Yeah. Well, it has, it has shifted recently in the beginning of the year, it’s been more, you could tell owners were just trying to shoot in the dark and see what they could get. And then there were some that were in distress where, you know, they were, you know, had to sell and then you had a lot of loan assumption type deals, but it was very sporadic. It wasn’t really that much deal volume this first half of the year. Recently though, I’m starting to see more of the assets that kind of fit our criteria, the 80 late eighties, I would say nineties to two thousands product, still some loan assumption type deals, but I’m seeing a little bit more reasonable pricing getting closer to the numbers or the original ask, which is which is nice. And I’m also seeing some opportunities in distress with some owners that have to sell because they do have financial debt maturities coming up. So it’s interesting. It’s still, it’s, even though it’s picked up, it’s still relatively slow. But I, I do anticipate with the fed dropping rates 50 basis points that we’re gonna see a significant volume over the next 12 to 18 months.

Charles:
Yeah, I, I definitely, I definitely think so. And I think also that starting in 2025, we’re gonna start going, I think we’re over the hump now, and I think 2025 we’re gonna start seeing these deliveries, you know, start fading away and then through 2026. So it’s gonna be a very interesting environment going forward, even though we’re kind of like in a standstill here, even though these markets have been extremely resilient with all the new inventory, which is kind of amazing.

Whitney:
Yeah, no, I mean, it’s, I think it’s gonna be a good time to be in real estate if you’re, if you’re a prudent investor, let’s say, like what we mentioned earlier about, you know, a lot of the, you know, syndicators that might have not had a background in real estate and then got into it and, you know, maybe they were an engineer and got into it and was able to raise capital, I think, I think, you know, some will prevail, but the ones that are prudent and really actually understand the markets are gonna see some good upside if they’re able to raise capital.

Charles:
So Whitney, one other part of your business, which you touched on earlier, is your development closeout services. And it’s, it’s interesting it’s something that we haven’t really spoken about much on the show, but it’s also a, a great service that you’re adding to people you work with, but also kind of keeps your finger on what’s happening in commercial real estate. Exactly. Which is awesome. Just like your brokerage part of their business. Can you explain what development closeout services are a little bit more in detail and kind of how you partner with developers, contractors and investors?

Whitney:
Yeah, so the development closeout process is really that renovation or construction to certificate of occupancy. You know, we kind of we’re, we represent the developer owner rep and we ensure that his, you know, the developers and the architect’s plans for that property as well as coding is, is up to par. So we have, we kind of have that final voice of whether or not a deal gets across to the certificate of occupancy. So we kind of we’re, we’re really responsible for ensuring that the GC and the vendors associated with the GC execute on, on whatever needs to be done for that pro property in order for it to get to occupancy. And you know, like you mentioned earlier, it really it, it actually came as a service line out of a friend that had been a GC for 30 years in the Georgia market. And he went and worked for an institutional developer and he had this problem and he reached out to me and we, we, you know, worked with them and all of a sudden it just became something that was needed in you know, in, in a business line that really has brought value. I mean, we’ve done over 2000 units just in Georgia and continue to get contracts. Yeah,

Charles:
It’s great to have like a complimentary part of your business because with a syndication model, it’s just a longer term kinda business plan, right? And then having something where you can stay involved with what you’re doing, but maybe it’s a, a different kind of pay structure where you’re getting compensated earlier than later. Whereas like with funds and syndications, it’s mostly all in the back end, if not all.

Whitney:
Yeah, I mean, it, that’s definitely you, you know, my business very well, <laugh> <laugh>.

Charles:
So one thing that I saw that you, you know, you’ve, you’ve played division one basketball and how has that experience helped you succeed in commercial real estate investing? Because commercial real estate, as I found out over the years, is a very team sport as well.

Whitney:
Yeah. So that’s interesting. But interesting of a question because I did play DD one basketball, but I felt like during that time I was very distracted and I ended up partying a little bit more than I needed to and wasn’t as focused and could have possibly had a career professionally how to stay focused. Ironically, now I train and compete in Brazilian juujitsu, which it, it has now that I’m at, you know, older, more mature, I realize I now because of these two sports and seeing my past career and saying, Hey, I had an opportunity, but I let it go because I didn’t stay disciplined. Now as I’m older and I’m training jiujitsu, I bring that discipline and it has transitioned into my professional life. Just, it just, it’s like a marriage that has made me a better person all the way around.

Charles:
No, that’s, that’s great insight there. So for people that are interested in kind of following the path that you took to starting in corporate, going into what you’re working on now with your own business and investing in real estate how do you advise people to maybe follow your path, but maybe a little different or do something different than you would?

Whitney:
Oh, definitely do, do not do what I did. But <laugh>, I would say if, you know, like I didn’t have the foresight to know that I liked real estate. I didn’t even know real estate offered everything that it did. I was never exposed to it. So I learned later in life, and if I had known about this earlier, I would’ve dedicated my time and energy into this during college. And so I would suggest starting early, if you know early and you’re in a college student or you know, in your early twenties, maybe start with an internship where you can get an opportunity to work in commercial real estate, whether it’s from brokerage, property management, investment management and just get exposed. We have an internship program that we’ve done success successfully with all the local universities here in Georgia.

Whitney:
And, and have definitely helped a lot of young people get to the next level, and I’m proud about that, probably most of all. So, you know, I think it’s, you know, start early with that. If you’re older, you know, and you’re getting into the real estate space later in life, like I did, I, I think, you know, finding, you know, an advisor or a mentor or you know, even if it’s, you know, someone that’s just smarter than you in the space that you wanna get to their level and start really following what they’re doing and learning, you know, where they go and how they network and, and, and developing those skills that you, you, you are gonna need in order to be successful in this, in this industry.

Charles:
Would you suggest people becoming a broker before becoming an investor?

Whitney:
Depends. I mean, for me it worked because it allowed me to earn money in the business and learn the business at the same time because I went full time once I left corporate. I’ve been full an entrepreneur since. So but if you don’t have the appetite to for that, I think, and you’re like still maybe working or something, I think the better decision might be you know, you know, look for an investment management company where you maybe can intern or learn, you know, get involved in that space and then keep your other job and then just go directly into investing. I will say that being a broker, an investor, it’s, IM, I, I think it’s impossible to do both. I struggled for a very long time trying to figure that out. I think we are probably closer to doing that now, being an equity solution advisory type firm. And we could have equity brokers and all that stuff if I wanted to. But I think, I think really for me, I, I love asset management, fund management. I love finance, so we’ll stay in, in this direction, but I think it’s very hard to marry the bo both of them and do ’em at the same time.

Charles:
Yeah, that makes perfect sense. I think it would be if you finding an advisor I think would be a little easier, maybe on the brokerage side, ’cause you’re working underneath someone, I think it’s a little bit more difficult to find people, especially if you’re looking for like mom and pop investors to like mentor you or advise you. It always becomes a little difficult, a little bit more difficult, I find because you have people that probably they don’t have maybe as big of a goal as you do, and maybe they’re not doing stuff as efficient. I mean, it’s, it’s a whole different thing. It’s not like going into a corporate kind of real estate environment.

Whitney:
Exactly. Exactly.

Charles:
So as we’re kind of closing up here what are some of the main factors contribute to your success over the years?

Whitney:
You know, I’m very spiritual, so I would say God and I mean that a hundred percent. I, you know, I believe that we have to be our best versions of ourselves and then at that point have unwavering faith and just commit to the process and trust it. And so that’s what I do day in and day out. I do the best I can and then I leave it to God after that. And so you know, that’s, I would say the number one you know, successful trait that is led to this where I’m at today. Said

Charles:
Perfectly. So how can our listeners learn more about you and your business, Whitney?

Whitney:
You can reach me on LinkedIn. It’s just Whitney Ward or our website@www.creendeavors.com. Both of those are great opportunities.

Charles:
Well, Whitney, thank you so much for coming on today and looking forward to connecting with you here in the near future. Yeah,

Whitney:
I had a, this was a good conversation. Thank you for having me. You’re welcome.

Charles:
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.

Announcer
Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Syndication Superstar, LLC, exclusively.

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About Whitney Ward

Whitney oversees the strategic growth of CRE-Endeavors and is responsible for identifying and capitalizing middle-market multifamily and commercial real estate transactions. Since establishing an independent commercial real estate advisory & consulting firm in 2019, Whitney has advised multifamily and SFR operators and intermediaries, including developers, private owners, and single-family offices on more than 20+ acquisitions and dispositions and has evaluated more than $1 billion in small and middle-market multifamily, SFR, and mixed-use retail investments using advanced financial models and a variety of investment strategies. Whitney earned her Bachelor of Arts in Communications with a concentration in Public Relations from George Mason University, where she competed for George Mason’s Division I Women’s Basketball team.

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