Curated Real Estate Quality, at Your Doorstep - Jin Lee - Royalton Capital
I am speaking with Jin Lee, partner at Royalton Capital, a boutique real estate investment and development firm in New York City. Jin brings over 30 years of experience in real estate investment management. She has a keen eye for market cycles and the intricacies of the NYC real estate market. I look forward to understanding her perspective toward the business, over a virtual cup of coffee!
Jin, one of the aspects of Royalton Capital that is rather remarkable, is that you and your business partner, Joshua John, have completed high-quality projects with a small core team that is normally tackled by large companies with separate teams for acquisition, underwriting, design and construction, leasing and management. How do you think about competition and Royalton’s ability to deliver and maintain high standards across the investment life cycle?
“Joshua and I have been partners for 10 years. I think the reason that we work so well together as a team is, as architects, we are trained as practical problem solvers. At the same time, we have complementary skill sets. Joshua has an amazing ability to conceptualize and build out spaces that people want. I am able to use the physical and financial attributes of a building and develop an investment thesis as a roadmap to execute successfully. What I’ve learned over the years is that having a good partner is everything — and our small team has the capacity to tackle each project’s complexities [as or more successful than our peers].
“Obviously, we couldn’t be doing what we’re doing today without our years of first-hand experience and networks from working in the NYC real estate industry. At Royalton, we rely on a small core team to debate and reach consensus on decisions quickly and build project-specific teams with individuals that we’ve cultivated trust with over the years. Whether it’s a 1 million square foot landmark conversion project or a small gut renovation project, we stay focused on our investment thesis, do our homework, and partner with the best to execute.
“You know, it is interesting thinking about big investment management firms as “competition” — a lot of the opportunity we see today is actually the product of NYC having an abundance of capital chasing deals. In my experience from working at large financial institutions, I’ve found that there’s actually a lot of opportunities overlooked by larger firms in deals that just wouldn’t move the needle for them. There are definitely benefits from operating with a large organization, no doubt, but there is a lot more freedom and creativity to uncover and capture opportunities and efficiency in working within a small, agile platform.
“At Royalton, we play to our strengths and focus on bringing our expertise to inefficient areas in NYC. That means investing in good deals that don’t “fit in the box” for large institutional investors or are overlooked, even if they have the potential to meet institutional-level criteria. That means we go where it’s not crowded. Pre-COVID, we were investing in middle-market sized deals in transitioning neighborhoods. We were able to create value in several ways — we made difficult spaces marketable, we improved the space to appeal to our target market, and we leased to reliable tenants and maintain good relationships with them. We’re not interested in chasing hot deals. We are disciplined, thesis-driven investors. We know the ins and outs of NYC neighborhoods, buildings, deal history, and most importantly, the players in the industry, and maintain deep relationships with them. We’re not afraid to get our hands dirty and do our own bottom-up research to build conviction in our theses. After living through three major real estate cycles, we accept market risks as a part of our underwriting. We think about ways to protect downside so that we have the staying power to capture the upside potential in the long-term trends that we invest in. So, post-COVID, we will look to uncover projects that have a greater potential upside through the kind of problem-solving that we have been good at and like doing. Lastly, we invest in NYC for a reason — it is one of the most exciting and dynamic markets in the world. NYC is constantly reinventing itself and that creates opportunities. It’s important and fun for us to stay connected and understand the change agents.”
Thanks for sharing Jin, looking forward to more.