Commercial Real Estate firms that are strictly focused on retail must pivot to survive. Specialization is great and is typically a mandate for superior investment returns but teams must be built with various specialists who are an expert in their field.
In today's environment, it's common to typecast yourself into a certain skill-set or asset class: “I have completed ten thousand office leases so I must only stick to office” or “I have built a couple dozen malls, it is all I know.” This mentality will get you into trouble. A true expert carries the ability to see the blind spots that a novice misses, this is precisely what GAIN stands for.
GAIN’s ethos is that we are not married to any one asset class. We are your classic opportunist having successfully invested in office, flex, multifamily and retail asset classes. If multifamily cap rates are trading at sub 5% in a hot area, we look to other markets. If industrial is consistently trading at all time highs, it's time to look at office or retail— spaces which currently have black eyes due to the pandemic. If you're not consistently beating your peers and achieving extraordinary returns when you are a) buying at the top of a credit cycle, b) buying at historically high prices for that property or c) staking your livelihood on one asset class, it's time to diversify your alternative investments and search where others are not.
Sam Zell, one of the greatest investors of all time, calls himself a professional opportunist and has been quoted as saying: “we don’t buy markets, we buy deals” and “if everyone if going left, look right.” He doesn’t pigeonhole himself to office or multifamily or even real estate for that matter. Diversification is key.
Warren Buffett, the sage, long-term investor has a similar view: “we simply attempt to be fearful when others are greedy, and to be greedy only when others are fearful." Berkshire Hathaway takes the opposing views of their peers and this has resulted in beating almost all of them.
If you are a one-trick pony, now is the time to look at expanding your horizons. There are countless other investors who have made their name on these same principles. Source opportunities, be aware of the risks, and you'll become an expert.