Last year, forty-two files reached our committee. Two became operations. The other forty were not all bad — some will make fine deals, for someone else. They simply were not ours.
First reason: a price that assumes the future
Half of our declines fit in one sentence: the entry price only works if everything goes well. Land that needs rent increases to close, a hotel that assumes an occupancy never reached in its area. We invest in what exists, not in what ought to happen.
Second reason: an operator you cannot visit
An asset can be visited; so can an operator. When we cannot spend a day with the team that will build, run or lease — walk their previous site, call their former partners — we do not proceed. The quality of a real estate operation is first the quality of the people holding it.
We would rather miss a good deal than make a bad one. The asymmetry is total: the first costs nothing, the second costs years.
Third reason: an exit with a single scenario
Every operation we retain must have at least two plausible exits — block sale, retail sale, refinancing, long-hold operation. A single exit path is a bet, not an investment.
What this changes for our investors
This filter has a cost: months without a new operation, sometimes. We accept it. The vehicle you join was not filled for the sake of filling — it was retained because it survived forty declines.