Mastering Both Sides of Real Estate: Altus Equity’s Team Approach to Investment Success

There are two general types of active real estate investors. The first group consists of individuals who use their own money for their own projects, often becoming highly knowledgeable about their local real estate market and real estate itself. This expertise gives them a strong competitive advantage, but they tend to lack familiarity with complex financial structures used in larger real estate transactions and structures, known as the “capital stack.” The second group typically operates within a company structure, pooling funds from multiple passive investors for larger projects. While they have a deep understanding of the capital stack, they often lack intimate knowledge of local real estate. The first group focuses on real estate itself, while the second views investments primarily through a financial lens. Rarely does a company possess knowledge of both real estate intricacies and complexities of investment finance.

Altus is one of those rare companies that does. “I studied finance but never thought of real estate as being the conduit for applying that knowledge and turning it into a career,” says CEO Forrest Jinks, “I almost literally fell into real estate investing, but was just out of college and once I bought my first property barely had two pennies to rub together to hire help for the work that needed to be done.”

He continues, “Because I couldn’t afford to hire anyone, I learned to do everything myself, and by the time a few years had passed, I had obtained passable knowledge in most construction trades, the need to maneuver the politics of building and planning departments, and how to research long list details of long forgotten documents in the back room of recorders’ offices. As an example, I have quite literally jacked up buildings and replaced roofs.”

That kind of on-the-street experience permeates through the organization. Vice President of Finance Marie Cattrell, like Jinks, holds a degree in finance. However, she also gained industry expertise by starting her career at a property management company, where she handled all the intricate details involved. She later transitioned to a small development company, taking charge of their finance and accounting operations, further deepening her practical knowledge in the field.

“My first investment company was building a couple of large apartment complexes a year, but besides the company’s two partners, there was only me and one other person in the company. Technically, I was the accountant, but in a company that small, everyone had to learn to do everything to keep things progressing forward,” says Cattrell.

Being in the trenches is not always the most efficient way to run a company or individual projects, but as an asset manager (and 30-year real estate veteran), Kent Borowick attests, “Third-party reports are useful, but a hired consultant is there to report on the format for which they are hired. In many cases, those reports miss or neglect things that are of substantial concern or, conversely, include serious items that are easily remedied. By really understanding real estate and physical structure, we have not only avoided some serious pitfalls but also uncovered hidden opportunities that others have missed. In both cases, we and our investors are the beneficiaries of that discovery.”

Altus has grown considerably over the past ten years, expanding its total portfolio and the size of individual deals. Its largest current project is the construction of 1.4 million square feet of industrial warehousing, which is now in the lease-up phase. However, this growth has not come without challenges along the way.

“While our ability to get into the weeds has created substantial benefit to our investors, the proclivity of our management team to dig into every detail from building inspections to title reports has limited how fast we can grow,” reports Senior VP of Investments Andrew Eicher. “The same holds true with the creativity we bring to opportunity discovery and deal structure. Sometimes that creativity uncovers outsized profits where none previously existed, but we also have to make sure we don’t overcomplicate our processes or structures.”

Jinks agrees, “While we understand and appreciate looking at investments from the finance viewpoint, we still tend to default to focusing on the real estate itself. This is great in a microcosm, but that kind of knowledge is really difficult to obtain within the more formal constraints of a larger company. We created what we call the Accelerated Learning Program (ALP) to replicate the real-life experience of being a small investor investing your own money and being responsible for all aspects of a real estate investment from start to finish.”

He continues, “For those that choose to go through the program, the last module of the segment is the real-life experience of going out and learning by doing. Altus provides a knowledge resource and can be an investor if needed, but each person who goes through the program has to be responsible for each individual aspect of the investment, from identification to underwriting to obtaining financing to reviewing closing statements, etc. Altus allows participants enough freedom to encounter challenges but not so much that they become overwhelmed or fail. That real-life experience of stress and responsibility is invaluable in their roles for Altus and is great for their careers.”

The school of hard knocks persona even extends to the company’s investor relations team.

“I was a commercial real estate broker in my early career before joining Altus’s team,” states Chad Richards, VP of Investor Relations. “I’ve been involved in hundreds of transactions across the country,  which required me to be on a plane often, and usually with very little advanced warning. When clients are depending on you, there is no alternative but to get things done. It is the same with Investor Relations. Our investors are critical to the success of our company, so we treat them like our partners. We continuously do whatever it takes to make sure we are providing the highest level of service possible.”

The collective experience of the Altus team has been instrumental in the company’s success, positioning it as a firm capable of seizing opportunities while managing risk more effectively than many of its competitors. This blend of practical, on-the-ground experience and financial acumen positions Altus as a trusted partner capable of uncovering hidden opportunities and maximizing returns for its investors.

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