Having a soft spot for finance and economics from the very beginning, Edward Griffin started out his journey attaining his bachelors in Economics from Washington & Lee University and then went on to establishing his own firm, Griffin Partners Inc. and took it to exceptional heights. Catch his valuable insights on the real estate industry and investing in this interview below.
Q.1. What are some of the challenges that you’ve overcome as the CEO of Griffin Partners?
A.1. Building a process to make sound investments is the most difficult challenge. It requires process design, data gathering consistent application of well developed and defined underwriting standards, and building a team of experts to gather and sort through thousands of investment opportunities. Only about 1% of the investment opportunities we identify end up becoming closed investments, and our proprietary data base has taken more than a decade to reach the current level of robust support it provides to our investment success. The other two most significant challenges are building a great team and pushing innovation within a business that has traditionally been slow to adopt technology and strive for innovation.
Q.2. Can you tell us more about Griffin partners? What benefits do investors get at Griffin Partners as compared to others?
A.2. A focus on RISK ADJUSTED returns, risk management, non-correlated investing across geographies and product types and capital preservation. Over the course of ~50 investments over 20 years we have never lost money on a realized investment. Our firm has been around for 40 years, our management team has an average of 34 years of experience in the industry and an average tenure with our firm of 17 years. Our team has seen many real estate cycles and has experience with virtually every type of commercial real estate circumstance.
Q.3. Congratulations on the upcoming launch of Fund IV at Griffin Partners. What is your investment thesis behind this new fund?
A.3. Griffin Partners Fund IV will be evenly divided between industrial development and value-add office and light industrial acquisition. We believe that value-add investments generate the best risk-adjusted returns, and therefore Fund IV will focus primarily on acquiring value-add infill office and light industrial assets using conservative leverage. The performance of these existing assets can typically be improved through modernization, proper capitalization and the application of our deep asset management experience. Office investment is contrarian at the moment as a result of the work from home dynamics accelerated by COVID. While acknowledging the demand impairment impacting office investments, we are confident that demand will improve, and when it does, product type and quality will experience significantly more differentiation than in the past. Our team is well suited to take advantage of that more differentiated environment. Additionally, in the current cycle, we believe that developing carefully designed new logistics and light industrial assets yields compelling risk adjusted returns.
Q.4. What has been the most interesting or amusing point of your career till now? What was your takeaway from it?
A.4. While remaining focused and serious about work, I believe that the work environment must have a light-hearted side, and teams should have fun together. We need to be able to laugh with and even sometimes at each other in the office. As such, I am frequently amused and can’t really pinpoint any particular “most amusing” event.
Q.5. What excites you about work right now?
A.5. Launching Griffin Partners Fund IV and continuing to drive innovation in our business.
Q.6. What non intuitive advice would you give to family offices for investing in real estate?
A.6. While we are fortunate to have both a great team and a great track record, I think sometimes track record gets more of a weighting relative to team than it should. Track record is important, and it must demonstrate some depth and a time period that spans more than one real estate cycle. However, I would encourage family office investors to do a deep dive on and emphasize the importance of the team when evaluating a sponsor / manager.
Q.7. How will the real estate landscape evolve in the coming years?
A.7. Space occupiers will continue to see more user friendly and more efficient options to satisfy their requirements. Any owners who do not embrace this will be left behind.
Q.8. Which cities are you bullish on for real estate investment?
A.8. We believe the risk adjusted opportunities, on average, are better in the large non-gateway markets with demographic and job growth trends exceeding the national average. The bi-coastal gateway markets have, in our opinion, a liquidity premium (lower cap rates) which is often not justified by actual liquidity statistics. Our target markets are Salt Lake City, Denver, Phoenix, Dallas, Austin, San Antonio, Houston, Nashville, Charlotte and Raleigh.
Q.9. In your opinion, what are some of the issues in the real estate industry and what can be done to overcome them?
A.9. Commercial real estate has been slow to adopt the tenets of ESG. We are beginning to see a larger recognition of the importance of ESG. As an example, Griffin Partners is just now finalizing its statement of guiding ESG principles, and while not early leaders in this sphere, our timing will certainly be ahead of the average firm.
Q.10. What headline will the WSJ write about Griffin Partners in 2025?
A.10. Innovative and rapidly growing real estate investment manager acquires [Important Co.] while simultaneously transitioning leadership to the next generation of seasoned leaders.