Banks Are Finally Selling: The Hidden Multifamily Buying Opportunities Most Investors Still Miss

Greg Bronson (00:00)
I would say that capital has changed its appetite dramatically over the last few years. And really understanding what you need in order to drive institutional capital, interest and appetite for the deals you’re pursuing is critical. institutional capital being both equity and debt. The market continues to change, it continues to evolve, and having regular conversations, being in the flow of what’s going on in the market is critical to getting deals done at any size,

Scott Bursey (02:13)
Welcome back to the Real Estate Pros podcast powered by Investor Fuel. I’m your host, Scott Bursey. And today we have an industry titan with us, Greg Bronson of Ashland Capital. With over 20 years of residential real estate experience, Greg has navigated and managed over $2 billion in transactions across student, multifamily, and senior housing sectors. He is also an adjunct professor at NYU’s Schack Institute of Real Estate and founder of Ash Real Estate.

Greg’s deep background in equity, debt, and investment strategies is going to give our pros some serious insight into what’s driving the market right now. Greg, welcome to the show.

Greg Bronson (02:55)
Thanks very much for having me, Scott. I look forward to the discussion.

Scott Bursey (03:00)
It’s just awesome having you here, Greg. And to help our listeners get up to speed. Please give us the ninety-second highlight reel, if you will, of how your career ignited and where you’re pouring your fuel now.

Greg Bronson (03:14)
Sure. So, you know, I started my career at Lehman Brothers after college. may she rest in peace. I was there for a couple of years and left in the summer of seven to join a commercial real estate debt investment firm, just as the world was turning and was investing in structured real estate debt, CMBS.

Whole loans, B notes, B pieces, mezz, preferred, and from there transitioned to the principal investing side, as you noted across multifamily, student housing, and senior housing. I’ve seen I’ve been through multiple market cycles, you know, the GFC, COVID, the rate increases over the last few years. It’s been

An interesting time in the market, and it’s really shaped the way that I look at investment opportunities and risk. And at Ashland, we focus on value-add multifamily, and student housing, primarily in the Midwest and South Southeast. We also have a credit fund where we do a few things. Most the biggest concentration of that is in preferred equity and sub debt in the in the real estate space.

Scott Bursey (04:35)
That’s incredible, Greg. Thank you for sharing that journey. It really puts into perspective how much dedication goes into building a portfolio of that scale. And you know, Greg, what really caught my attention about you was the way you’ve been able to successfully bridge the gap between complex debt structures and high-level student housing investments over the last two decades. That takes commitment and execution.

Greg Bronson (05:50)
Well, it’s been it’s been an incredible journey and you know, I I am very passionate about what I do and I’m constantly learning. So, you know, that’s really all you can ask for out of a career and and a life, right? If every day you wake up and you’re excited to do what you’re doing, then you know you’re doing the right thing.

Scott Bursey (06:13)
And you hit home on it, education’s the key. Greg, I’m curious to know, looking at your early transitions into the multifamily space, what was the single most transformative shift in your mindset that allowed you to scale from smaller deals to managing billions in assets?

Greg Bronson (06:31)
Well, it really was just a progression through different roles and different opportunities that that I came across over the years. and as I said, it’s continued to be a learning process. And you know, every deal that you do, get a little bit better, you identify things that work and identify things that that need to be improved.

And so as you continue honing your skills and developing, you know, you can do more over time.

Scott Bursey (07:08)
That’s a powerful insight. Thanks for breaking that down for us. And digging into your core talents. What do you consider the biggest internal strength that allows Ash Real Estate to maintain such a competitive edge in equity markets?

Greg Bronson (07:24)
So at Ashland Capital, our biggest focus and edge is leveraging our expertise in the Midwest and South Southeast and our relationships across the industry, both owners and operators as well as brokers and capital providers, to really be able to

find an edge in opportunities where other people quite honestly just see another real estate deal.

Scott Bursey (07:59)
Thank you for highlighting that. It’s clear that internal foundation is the key. And thinking about that strength, how do you keep that same edge sharp when moving into new asset classes?

Greg Bronson (08:14)
So we really generally stay focused on residential property types. I have moved across multifamily, student, and senior over the years. Ultimately, those are all needs-based housing offerings, right? So it’s not as though I’m looking at office or industrial or something like that. That takes a different, a completely different lens and skill set.

It’s just looking at housing for different stages in life. Senior and student are certainly more operational than multi, but all of them require operational expertise, more of a hospitality-oriented mindset when you’re managing tenants and their dwelling places.

Scott Bursey (09:03)
Thank you for breaking that down as well, Greg. And we’re interested to know here at the Real Estate Pros podcast, where do you see the most common operational friction when scaling across the student and senior housing sectors?

Greg Bronson (09:51)
So those are not just real estate sectors, those are operating businesses behind the real estate. So that I think, you know, over the years I’ve seen owners pivot into student or senior, primarily student, I would say, you know, thinking that it’s like multifamily, it’s just students instead of instead of young professionals. And

It’s a very different business. You have a leasing cycle where you need to get fully leased up before the start of the upcoming academic year, which sometimes starts as early as the start of the prior school year. So this fall, properties needed to be this past fall, properties needed to be leased up for the upcoming fall a year later when school was starting, right? We’re in July right now.

School starts in late August, September, properties need to be full at this point. Otherwise, they’re gonna have a whole year with some vacancy in them. And that’s very different than multifamily, where you’re leasing very heavily in the spring and summer months. Student, very often you’re leasing in the fall and winter, which is off-cycle for most multifamily properties.

Scott Bursey (11:15)
You know, that makes perfect sense. Greg, how are you actively mitigating those specific friction points in your current operations?

Greg Bronson (11:24)
So it boils down to rigorous asset management. Our asset manager at Ashland comes from the property management world. And we have weekly calls with our with our property managers. We use third-party property management. We have weekly calls with them to make sure that they’re on plan, that they understand the priorities. And you know, we’re really ensuring that we are hands on with everything that’s going on, and not just sitting back and relying on them to do what we think they should do. we’re driving the initiatives.

Scott Bursey (12:04)
I appreciate the transparency there. Greg, when you look at the current landscape, what is the one specific market opportunity that you think most investors are currently overlooking?

Greg Bronson (12:16)
So I wouldn’t say that investors are overlooking it, but I would say that that it’s been kind of a headline item for multiple years now since interest rates went up. And I think we’re starting to see a little bit more of it, which is, you know, lenders that have legacy loans on their balance sheets or REO properties that

They’re looking to lighten up on in order to get back to the business of lending. people know that that lenders are in the business of making loans. And when a deal goes sideways and they have to foreclose on a property, that’s not their core business. But it’s been slow for them to start unloading those loans and those properties because the market has just been, it’s been a tough market over the last few years.

And I think we’re starting to see a little bit more motivation on lenders’ parts, you know, to accept the current reality of the world and get back to their core business of lending. And to that to that end, you know, we have seen that in in our business where you know identifying good acquisition opportunities takes

many, many, many more reps than it did five, ten years ago when we were in an in a zero interest rate environment, right? When you’re borrowing at five, six, seven percent, deals make a lot less sense than when you’re buying borrowing at three, four, five percent.

Scott Bursey (13:58)
That’s a fascinating angle that I hadn’t considered. You know, if you had to put your capital to work in that space tomorrow, let’s say Greg, what’s your first move?

Greg Bronson (14:10)
So we’re actively having conversations with owners, operators, brokers, and lenders to really have our finger on the pulse of where the market is and where the opportunities are. Just this morning, I sent out a bunch of follow-up emails to lenders that I’ve been speaking with for weeks and months and years, quite honestly, and am starting to get more responses on.

REO properties that we had preliminary conversations on months ago. And now they’re saying, yes, we’re finally ready to entertain offers.

Scott Bursey (15:30)
That’s a bold and calculated approach. With the shifting economic tides, what are you most focused on regarding the debt market?

Greg Bronson (15:40)
So, you know, interest rates are the headline item, right? We know that interest rates are higher. We believe interest rates are not going down in the short to medium term because economic news has been lackluster to say the least, if not slightly negative. So really understanding how to make deals work in a different environment than we’ve been in, you know, previously. So

This is kind of back to the seventies, eighties interest rate environment, and we haven’t seen that for a long time.

Scott Bursey (16:20)
You know, that’s a very real concern for everyone in the room right now. And on that note, what is your primary defensive strategy to protect your assets against those potential threats?

Greg Bronson (16:34)
So we get fixed-rate debt on all of our properties in order to prevent, you know, increased interest rate exposure. and we asset-manage the hell out of our properties to make sure that, you know, we are performing in line with budget or better.

Scott Bursey (16:55)
Wise protection strategy, Greg. And I know our pros are gonna want to know, reflecting on your academic background at NYU and your hands-on experience, how do you see the next five years of real estate education shaping the next generation of investors?

Greg Bronson (17:14)
Yeah, so that that’s a great question. This is a question I get a lot from people, not just as a teacher, but also as an investor in student housing, right? Like what is the future of academia? Is AI going to take over? Is academia—is post-secondary education going to move to a fully online virtual experience? And the answer is

Things are things are changing. AI is changing the world. It’s changing the value of a college degree, but not from all universities. So there’s a bifurcation in the performance of colleges now and going forward, where the bigger state schools, you know, the Power Four universities are continuing to see enrollment growth and demand. And smaller liberal arts schools are really going to be the losers in the enrollment growth story and the success story. So we are focused from an investment standpoint in bigger schools. We think those are the ones that are going to be investing more heavily in academia and technology. That’s going to drive interest and demand from the 18- to 24-year-old college-age population. And it changes what is most important, right? Right now, one of the biggest differentiators for young people to get a job is familiarity with AI. That wasn’t a part of the conversation five, 10 years ago. So schools are getting to be greater experts in that space and figuring out how to make that part of the curriculum in order to differentiate themselves.

Scott Bursey (19:09)
That is a great perspective on the future of our industry. And I guess the question is, Greg, what’s one lesson you hope your students carry with them into their first deal?

Greg Bronson (19:21)
I would say the biggest lesson throughout my career is something that my father taught me when I was when I was very young, which is just that you have to work your butt off. You know, it’s a very simple life lesson, right? Like you can’t sit back, you can’t be lackadaisical about getting stuff done, about doing what you need to do.

You need to be aggressive and go after it. And I think even in this time of AI where people are relying on technology to answer their questions and to augment their efforts, their efforts need to get exponentially greater in order to maximize the AI input and contribution to what they’re doing.

Scott Bursey (20:09)
That’s a lesson every one of us needs to remember. And Greg, we’d love to know what does your professional network look like right now?

Greg Bronson (20:19)
So you know, over 20 plus years in the industry, as well as teaching at the Shack Institute of Real Estate at NYU, I have a really big network of industry professionals, owners, operators, LPs, lenders, and you know, family offices. And I’m regularly in discussions with those groups, figuring out where they see opportunities.

What they like, what they don’t like, and honing our efforts and our industry thesis around how the market is moving.

Scott Bursey (21:00)
That is a vital reminder of the power of relationships right there. And Greg, if you could walk us through what is the one piece of advice you’d give to an investor looking to break into the 100 million plus transaction space that they won’t learn from a textbook.

Greg Bronson (21:18)
I I would say that capital has changed its appetite dramatically over the last few years. And really understanding what you need in order to drive institutional capital, interest and appetite for the deals you’re pursuing is critical. institutional capital being both equity and debt. The market continues to change, it continues to evolve, and having regular conversations, being in in the flow of what’s going on in the market is critical to getting deals done at any size,

whether it’s hundred-plus-million-dollar deals or one-million-dollar deals. The market continues to move and you need to be an analyst in what’s going on in the world in order to be able to be a professional.

Scott Bursey (22:17)
And that is some critical advice right there. Thank you for that. And Greg, you have given us so much great advice here today. But is there any additional words of wisdom, golden nuggets that you could leave with our pros?

Greg Bronson (22:34)
I would say patience is really, really important in this environment. You know, things are not happening quickly like they were 10 years ago. It takes a lot more time and due diligence for deals to make sense. And it also requires giving sellers and brokers and financing counterparties in both debt and equity.

comfort in you as a sponsor and your ability to execute. So it’s it all takes time and reps and, it’s an interesting time, but it’s not easy by any stretch.

Scott Bursey (23:17)
Thank you for sharing that. Those were excellent words of wisdom right there. And Greg, for those of our listeners that want to keep this conversation moving, stay in your lane, you know, and collaborate with you. What’s the best way for them to reach you?

Greg Bronson (23:32)
Yeah, thank you, Scott. you know, I I’m on LinkedIn. My email is [email protected]. I’m always happy to have conversations, get on a call, meet new people, and explore ways to work together. So would look forward to connecting with anyone in your network that’s interested in having a conversation.

Scott Bursey (23:56)
Greg, thank you so much for joining us today. This has been an absolute master class.

Greg Bronson (24:02)
Thank you very much for the time, Scott. I appreciate it.

Scott Bursey (24:05)
And to our listeners, we appreciate you. If you receive value from today’s episode, please subscribe. We’ll be filling your tanks with the lineup of elite guests, just like Greg Bronson, who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you on the next episode, everyone.