Robb Bollhoffer, along with his acquisition team have grown 29thStreet Capital’s apartment portfolio to over 7,000 units in only a few years. Robb’s career in commercial real estate began as a Senior Acquisitions Analyst at Trizec Properties, then Managing Director at Strategic Capital Partners, and now Managing Director at 29th Street Capital. Robb and his team at 29th Street Capital focus on acquiring add-value multifamily assets in 10 high growth markets across the U.S. In addition to Robb’s impressive resume and his many successes he is an all around great guy on a personal and professional level. Search Apartments for Sale on LDCRE.
LD: What career path did you want to take when you were in college?
RB: I chose Wisconsin (University of Wisconsin-Madison) due to the impressive real estate program, so I knew in High School that I wanted to focus on Real Estate. My father was involved in owning some buildings in the North Suburbs of Chicago so I was always helping him with repairs, collecting rent, etc.
LD: What events in your career path brought you to your current position as a Managing Principal?
RB: I always chased opportunity rather than salary, so I focused my efforts on small growing companies with excellent leadership. I was always willing to take the risk of failing when I was younger which makes you work that much harder.
LD: Can you tell us a little what your “average” week of work is like?
RB: 7am-7pm with 2-3 days of travel mixed in. This is much healthier than two years ago but I also didn’t have the team around me then. I have a much better work/life balance now, but I also have a VERY understanding wife, which is important.
LD: Describe your ideal acquisitions (Markets, Distress, Size, Age, Apartment Layout, etc.).
RB: We have a much different model than most. I have 10 local acquisition managers that constantly source deals and execute their business plan within their market. My partner and I obviously put equity in each deal but I also require our acquisition manger to put in equity into their deals. If our acquisition manager doesn’t put money in the transaction, how can I look an investor in the eye? We align all our interests with our investors and I am confident that this has separated us from the herd.
LD: In 2015 – 2017 there is an estimated $601 Billion of CMBS maturities hitting the market. What impacts do you think this will have on the market (listings coming to market, demand for debt, debt available, cap rate expectations, etc.)?
RB: On the same note, many companies have done extremely well over the past few years; so have raised funds, private equity, etc. to capitalize on these opportunities. We’ve been ready for opportunities the last 2-3 years but are noticing that most of these loans are being refinanced or achieving top dollar in the market.
LD: What do you see happening in the Apartment Sector over the next couple years (Primary & Secondary Markets)?
RB: It’s going to come down to asset management and operating margins. I’ve seen too many groups over the past few years that bought in an opportunistic market and have recently sold while the Net Operating Income hasn’t moved. We constantly are trying to lower or remove operating costs so our focus has been the bottom line. Rents can’t continue to increase at the pace we’ve seen over the past 3 years but my opinion is that there is still a few more good years in workforce apartments. I’m a firm believer that Class A apartments are going to struggle for a few years since in absolute dollars, these rents are extremely high and the tenant base that makes enough in salary to afford these rents isn’t growing at the necessary pace to absorb the supply. We’ve been targeting workforce housing apartments in need of an upgrade but also are at a 40-60% discount to replacement cost.
LD: Everyone has a few transactions that stand out in the careers. What is one deal thus far in your career that stands out to you and what is the significance to that deal?
RB: As you know, the past few years have been good for the multifamily industry so I’d have to say a transaction where we acquired a distressed note secured by a 400 unit complex in a secondary market. We foreclosed on the note and took title which took about 6 months. Once we had control of the property, we literally moved in one of our acquisition managers that took control and signed almost 100 leases in 4 months. I’ve never seen the energy at a property change like that in my career. It was something special for the tenants, the community and our investors.
LD: What advice would you give a young Robb Bollhoffer just out of college and starting his professional career?
RB: Always, always focus on your opportunity to grow rather than a salary. This will make all the difference in your career.
LD: What advice have you received that has been instrumental in your success?
RB: Encourage competition. When I look to hire, I want that entrepreneur that has failed or willing to take a risk on failure. When I put this person in a competitive environment, they’ll become successful.
LD: What advice hasn’t worked out for you?
RB: I was always told that I needed the “gray” hair to add credibility to my team. I can’t stress enough that I totally disagree. I tried that and failed. Not to discredit my old partners who were great, but they just didn’t have the energy or drive needed to grow a company. Sometimes when people are already successful, their drive isn’t at the level needed in today’s market. My current partner is non-stop energy which is needed at small companies so that we don’t become complacent. So in hindsight, I would change the advice to always partner with an individual that has higher energy than you do.
For more information on Robb Bollhoffer:
29th Street Capital
320 W. Ohio, 3W
Chicago, IL 60654