Real Estate

Ari Rastegar, The Oracle Of Austin


Austin developer Ari Rastegar on how Covid will change real estate in large American cities forever… and how Texas is cashing in.

He closed 11 major commercial real estate deals during the Covid-19 pandemic. This came after years of telling anyone who would listen how much opportunity there was in the central Texas capitol city many refer to as Silicon Hills. His proclamation earned Ari Rastegar the moniker ‘Oracle of Austin’.

But Ari Rastegar isn’t stopping with Austin.

“Austin was our prototype to establish and then expand around the Sun Belt,” says Rastegar, founder of Rastegar Property Company, an Austin-based CRE investment firm & vertically integrated real estate company with a focus on value-oriented real estate.

“Nashville, Dallas, Phoenix, Raleigh and Tampa – the Sun Belt is hotter than it has ever been, and we see no end to the migration. You think Austin is exciting?” says Rastegar. “Get ready!”

For years he watched droves of young professionals making their way to Austin, and he took careful note. That’s why, when the pandemic hit, Rastegar realized it would only expedite these migration trends. He utilized this insight and his uncanny ability to see around corners to position and propel Rastegar’s business plan forward. Now, that vision is bearing its fruit as companies like Apple, Facebook and Amazon invest long term in the city where he was born. Rastegar’s keen understanding of his hometown —- where he made his first real estate deal while in law school — gave him the advantage of knowing exactly where the young professionals coming to the city would want to live and the type of housing that would appeal to them.

Then Tesla chose Austin for its $1 billion Gigafactory and Oracle announced it was moving its headquarters to the Texas capital, solidifying Austin as a world tech hub.

“I was already focused outside the urban core,” he says, with the exception of 1899 McKinney in Dallas. “We were going vintage multifamily, fixing those properties up to 2021 standards. So Covid actually accelerated our business plan.”

Rastegar sees the Covid era as such a great buying opportunity that his firm recently launched a $200 million REIT targeting the asset class and region for investment.

“All of these vintage multi-family properties have inherent social distancing because they’re two story walk-ups, there are no elevators, and people want to feel safe,” he says. “They are treasures.”

One of Rastegar’s many fortes is to find treasure in what others overlook or don’t see at all. The New York Times recently chronicled how his firm pivoted a UT property of traditionally student housing into a haven for young professionals. It is this innovation and agility rooted in a 38-year-old millennial who understands the building blocks of real estate, but couples it with a vision for rampant growth and consumer adoption.

Rastegar finds value in hidden places, like when he assembled four adjacent parcels of land in a bustling Austin neighborhood, and sold it to prominent North American developer Intracorp. Intracorp purchased the site through a joint venture with The Resmark Companies, the investment arm of CalSTRS, one of the largest public pension funds in the country. Rastegar’s firm will retain an investment in the project.

“I am always creating value, no matter what, which is why we are so focused on data,” says Rastegar. “From our seventy-point due diligence property checklist, to tracking wattages across apartments. We have gone beyond real estate; we see ourselves as a data analytics company, relying on hard data that we’re collecting through the sensor technology we have outfitted throughout our properties.”

Rastegar’s sensor-crazy properties collect data points across electrical, plumbing, even appliances, relying on AI and ML capabilities to remotely monitor all systems and provide management with insights to anticipate issues that can be addressed proactively.

“We’re using all of this data and technology because I’m the hybrid—an old millennial, a 38 year old who understands technology, but also, I can speak to the older generation that is very much a part of me,” he says. “I’m a real estate purist at my heart, but I understand where the world needs to go.”

Rastegar says his firm is 10 years ahead of the industry from a data analytics standpoint, using AI capabilities to identify acquisitions at attractive prices and in targeted areas. This enables Rastegar’s acquisitions team to monitor a much larger swath than local relationships and knowledge would otherwise allow. From there, machine learning is utilized when underwriting investments so that the firm can achieve risk-adjusted returns.

Which means he gets results regardless of the political climate.

Rastegar says he stays away from partisan politics, regardless of who holds national offices aside from impact on multi-family real estate.

“I think it’s really important to stay in the middle of the fairway and just say, look, I’m an American, Texas born & raised. I strive for what’s best for consumers who live in my buildings and for my investors,” says Rastegar, adding “Bears make money, pigs get slaughtered.”

Rastegar believes the next major focus in multi-family will be work-force housing, spurred by the new administration and its focus on infrastructure. Whereas Trump focused on affordability, Biden will focus on providing what some call affordable housing.

“We will create more workforce housing in the cities we’re targeting, and I’m cautiously optimistic that Biden is going to do a great job in that regard,” says Rastegar. “Biden’s dedication to smart infrastructure and technology is phenomenal. He talks so much about smart technology, clean energy, and we’re all about technology. It’s everything that we really believe in.”

Regardless of who’s in office, Rastegar believes there’s opportunity out there, you just have to find it. Since he started investing in real estate all the way back in 2006, this Oracle has shown to be quite nimble in the assets he targets. He started in storage before it was ever touched by private equity, before moving into vintage multifamily. Now, he’s reimagining suburbanism beyond the cookie cutter housing developments that defined 1950s Americana, and taking a more mixed-use approach, inspired by city culture.

These breathtaking communities will be vibrant and walkable with ample greenspace, and technology-driven, but go beyond housing to also include amenities like shops, breweries, rec centers and other community-driven places that make city life so accessible, but are often missed when one makes a move to the burbs.

To introduce this new suburban concept, Rastegar brought in highly regarded commercial real estate executive Neal Golden to be the firm’s President. Golden has extensive experience building titan real estate brands, including Newmark, where he most recently served as Vice Chairman and President of the Texas region. Together, this Texas two-some of Rastegar and Golden, who’s worked throughout Texas and the greater Sun Belt region himself, are propelling this Lone Star-based real estate firm onto the national stage.

“Much like Austin, the city that we love to call home, the firm is only just starting to scratch the surface when it comes to growth,” says Rastegar. “We’ve proven that our approach works, and have assembled a team that’s built billion dollar real estate brands. Now is the time to bring the best in class developments, from reimagined suburban housing, to much needed industrial space, to cities across the Sun Belt.”


Source link

Related Articles