How we think about location


Real estate markets are all different, but a few of simple principles guide us in the search for areas with strong potential for growth, limited and defined downside and positive long-term fundamentals. 

Demand drivers
We are in the business of supplying space for our tenants to use for their homes, offices, stores, farms and other uses. For each market and property type, a thorough understanding of what drives demand for space is essential. A diversified economy driven by entrepreneurship helps keep Bay Area rents high in the good times and resilient in the bad ones. Low tax rates and a business-friendly environment have made Reno a hub for job growth in recent years. A long history of trade and manufacturing help keep industrial space in Portland in high demand and short supply.

Supply Constraints
The flip side of demand is of course supply. Supply constraints can be natural, like the waterways of Seattle or the hilly terrain of the Bay Area. They can be regulatory like the maze of red tape it takes to get projects approved in San Francisco. Or they can be market-driven, like rising construction costs which make building anything but sprawling industrial complexes uneconomic.

Long-term Fundamentals
We are long-term holders of real estate, and as such take the long view on any investment we make. Even if we end up selling earlier than expected, we underwrite to "hold forever." We find that thinking about how neighborhoods will remake themselves, industries will change and cities will evolve helps us not only make good long-term decisions, but the ones right in front of us as well.

Weather matters. Taxes matter. Quality of life matters. Real estate is a long, slow-moving animal where a identifying a single demographic shift ahead of the crowd can create generational wealth.


The San Francisco multifamily space remains one of the most sought after real estate investment markets in the country. With an unemployment rate below 4%, San Francisco is naturally supply constrained with high barriers to entry and enjoys one of the most robust employment markets in the country.

Case Study: Antifragile Multifamily


Perhaps no other investment opportunity better personifies Nassim Nicholas Taleb's concept of antifragility than San Francisco multifamily properties.

Thanks to rent control, which not only creates barriers to entry that keep many investors out of the market, properties with tenants paying below market rents have significantly more upside than downside. Furthermore, units tend to turn over more often during a softening rental market, which means this kind of investment benefits from market weakness. In other words, while most real estate suffers during a downturn, this kind actually gets better.

Demand Drivers
- Entrepreneurial, start-up culture
- Young Silicon Valley workers choosing city life over suburbia
- Diversified economy generating high-income jobs
- Gateway to Asia
- Cuisine destination

Supply Constraints
- Natural barriers (ocean, bay, hills) 
- Environmental protection of remaining open space
- Complex, bureaucratic regulatory environment
- High construction costs



The secret of Portland is out. Natural beauty, a vibrant urban lifestyle, strong job growth and countless outlets for outdoor enthusiasts are just a few of the reasons that young, educated professionals are flocking to Oregon's most populous city. Real estate investors have followed this trend, as properties of all kinds have seen strong appreciation in recent years.

Case Study: Urban Industrial


We continue to find that the "too small for the big guy, too big for the small guy" niche exists in all real estate markets, in all locations. Portland's industrial market is no exception.

With strong supply/demand dynamics, this West Coast transport and manufacturing hub that offers an inexpensive option relative to the Bay Area or Seattle is ripe with opportunities for attractive yields and substantial appreciation potential.

Demand Drivers
- New industrial uses like prototyping, high-value manufacturing, cannabis and others
- Localized consumer retail delivery services need warehouse and distribution space near urban centers
- Growing cannabis industry able to pay substantially higher rents than traditional industrial users

Supply Constraints
- High construction costs make building new inventory of small buildings uneconomic
- Existing inventory being converted to higher-value uses (residential, office, etc)
- "New" industrial uses are making it harder for traditional industrial tenants to find space


Sitting on a solid foundation of international trade, manufacturing and an established technology industry, Seattle's economy is diversified and growing. The region is seen by many as an affordable option relative to the Bay Area, but rising home prices and rents are making Seattle less affordable by the year. 


Case Study: Workforce Housing


The recent trend of urbanization has seen an influx of wealthier residents moving into transit-rich neighborhoods close to downtowns. Residents who can no longer afford rising prices move outward, settling in suburbs that typically get progressively cheaper as one moves away from the city center.

Meanwhile, new housing supply is focused on the very high end or the very low end with nothing in the middle. Couple that with the lowest home ownership rate in a generation and mortgage guidelines that aren't getting any looser, and its no wonder that so-called "workforce housing" is become a crowded trade. But the long-term fundamentals, especially in Suburban Seattle, support the notion that vacancy will be low for the foreseeable future.

Demand Drivers
- Diversified economy generating high paying jobs in the city center, middle class residents opting for more affordable surrounding areas
- Affordable high-tech central relative to San Francisco
- Improving transit (high speed ferries, etc) making urban core more accessible from surrounding areas

Supply Constraints
- Waterways break up development opportunities
- Protected natural environment
- New construction focused on high end, subsidized and not "market rate affordable"


In a town infamous for booms and busts, Reno is booming. Tesla's recently opened Gigafactory, well-funded efforts to develop and clean up the downtown area and an economic development agency luring companies away from California are making believers out of those whose image of Reno is rundown Casinos and derelict motels.

No corporate or state income tax is drawing startups, wealthy Californians and others to this increasingly metropolitan high altitude destination. A strong student population driven by the University of Nevada at Reno (21,000 students), along with an influx of young people looking for an affordable alternative to San Francisco, Los Angeles, Portland and Seattle have driven apartment vacancy below 3%..

Case Study: Small Multifamily


In hindsight, a neighborhood's evolution often seems obvious. Walking distance to amenities, access to transit and quiet-tree lined streets - how did it take this long? 

A visitor to Reno's Midtown neighborhood, just south of downtown, may consider these things as they walk past classic craftsman homes, the larger of which have been converted to small apartment buildings. Still gritty in parts, upscale coffee shops and chic restaurants have become destinations for wealthier residents living within walking distance of this dynamic neighborhood.

Fortunately for us, the predominance of small properties in this area keeps institutional money out. It's the same story in San Francisco's Mission District: in order to participate in the neighborhood's upward trajectory, small buildings and the rare development opportunity are the only option.

Demand Drivers
- Nearby downtown redevelopment
- Strong University presence with shortage of housing
- Affordable option for young people wanting to stay on the West Coast
- Companies relocating to Reno for favorable business climate

Supply Constraints
- Zoning restrictions limit development in certain high demand core neighborhoods
- Target tenants do not want to live where there is buildable land (ie, outside of town)
- Commercial corridor surrounded by established and improving neighborhoods