Interview With Denver Lobo of JT Capital a Real Estate Private Equity Firm

by Peter Rizzo

Life Settlements in a Retirement Account? Think Again.

We talk with Denver Lobo about the intricacies of Private Equity Real Estate Financing and JT Capital’s approach

Private equity real estate financing refers to the investment in real estate assets through private equity funds. These funds pool capital from institutional and accredited investors to acquire, develop, manage, and eventually sell real estate properties with the goal of generating high returns.

Here are some key things we covered:

  • Sources of Capital: The capital for private equity real estate comes from institutional investors (such as pension funds, insurance companies, and endowments) and high-net-worth individuals with JT Capital taking a different approach.
  • Investment Strategy: Private equity real estate investments can follow various strategies, including:
    • Core: Investing in stable, income-generating properties in prime locations with low risk.
    • Core-Plus: Similar to the core but with some potential for value addition and slightly higher risk.
    • Value-Added: Investing in properties that require improvements or repositioning to increase value.
    • Opportunistic: High-risk, high-reward investments, often involving development, significant renovation, or emerging markets.
  • Fund Structure: Private equity real estate funds typically have a limited partnership structure, where the general partner (GP) manages the fund and makes investment decisions, while limited partners (LPs) provide the bulk of the capital.
  • Returns and Exit Strategies: Returns are typically realized through rental income, property appreciation, and the eventual sale of the property. Exit strategies include selling the property to another investor, refinancing, or taking the property public through a Real Estate Investment Trust (REIT).
  • Leverage: Private equity real estate investments often use leverage (borrowed capital) to enhance returns, which also increases the risk.
  • Risk and Reward: Private equity real estate can offer high returns, but it also comes with significant risks, including market risk, property-specific risk, and liquidity risk, as real estate investments are not easily sold.

Private equity real estate financing provides a way for investors to gain exposure to real estate assets without directly owning or managing properties, leveraging the expertise of professional real estate managers.

We discuss the differences in firms and what to look for when investing. For more information, you can contact Denver at denver@jtcapitalgroup.com or WWW.JTCAPITALGROUP.COM

Click here to listen to the podcast.

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