Real Estate Meeting with Don Abbey

By Megan Henry,2014-11-22 11:05
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Real Estate Meeting with Don Abbey

    Real Estate Meeting with Don Abbey 11-3-06

; First employer Grub + Ellis

    ; 3.5M into Beta Theta Pi house renovation ; Started the Abbey Co. in 1990 with 150K

    o Used JV/ Lines of Credit/ Co-Guarantors ; 1 Billion Dollar Company

    ; 200 Employees

    ; Vertically Integrated

    ; Paint, mow, repair, renovate, all in house

    o Increases cash inflows

    o This allows Abbey to control the process ; Grew through undervalued income streams, developing a business plan and

    exponentially increasing net income

    ; Market easier to penetrate because of size and amount of capital available

    ; Multi-tenant Integrity of cash flows

    ; European model of real estate Few own it, economy shifting here now ; 150 M Line of Credit at Bank of America ; Things that lead to inefficiency

    o Seller

    o Properties

    o Transactional

    ; Characteristics STP Matrix

    ; Seller Circumstances

    o Bad Quarter need to raise cash

    o Buy Facilities

    o Divorce/ died people with problems solve problems ; Close deals quickly- key in many circumstances underwriting in house

    ; Property Circumstances

    o Bad A/C

    o Not enough Parking

    o Poor Floor plans

    o Fix up lobbies

    ; Pro-actively seek investment groups

    o Tenants not paying rent

    o Able to throw them out renovate and raise rent ; Best advise: Find something fun and do for rest of life ; First Property: 22,000 sf warehouse in LA

    o Leased for triple original rent

    o refi- paid off people, still had positive cash flow ; Find someone who believes in you align with capital ; Make deal and bring to table people will back you ; Commercial real estate more formalized

    o Unique because it is developed

    o Haven’t paid income tax since 78, depreciating asset with appreciating value

    o Income tax deferred

    ; Greatest investment is to buy your house

    ; Other 2-4 plexes great way to manage your wealth

    ; 1-1 personal orientation with investment

    ; Expansion of company to Portland or Chicago in next 6- 12 months ; Approx 200 M of property acquired each quarter

    ; Best way to see what properties valued at is market survey

    o Get in car look for similar buildings with signs or ask apprisor- don’t trust


    o Talk to a leasing agent or interview tenants

    ; Need unique product knowledge- self- education

    ; 1-5 mile radius of products with similar space

    ; Learn the business first and then split

    ; Designing the process of the company and adjusting is favorite aspect of the job

    ; Ground up building started recently since land values skyrocketed th; LA county 5 largest economy in the world with 100 sq miles ; Biggest mistakes are hiring the wrong people

    ; Tolerance for stress increases over time

    ; Stress part of daily life learn to deal and tolerate it become competitive advantage

    ; Focus on today and what you need to do, don’t life in the past

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