Weekend Interview: Multi’s Elmar Schoonbrood On Buying A Platform From Blackstone, The Retail Future And Fighter Pilot Dreams

This series goes deep with some of the most compelling figures in commercial real estate: the dealmakers, the game-changers, the city-shapers and the larger-than-life personalities who keep CRE interesting.

Elmar Schoonbrood repositioned Blackstone's prestigious but distressed developer Multi as one the largest retail asset managers in Europe. At its peak, Multi managed €9B ($10B, £7.6B) of retail on behalf of the U.S. investment giant. 

Then Blackstone, with its logistics is king mantra, decided to sell out of retail. With a platform that employed 600 and its dwindling asset base up in the air, Schoonbrood teamed up with Multi Chief Financial Officer Steven Poelman and led a management buyout of the business.

Since spinning Multi out of Blackstone in 2022, Schoonbrood, now co-CEO with Poelman, and his colleagues have turned around the business and made a loss-making platform profitable. They have also expanded into three new countries and added €1.5B of management mandates. Thanks to vertically integrated functions like development management and asset management, it is the largest independently owned retail asset manager in Europe.

Having bought UK retail asset manager Realm this year, the 42-year old company now has €5.4B of assets under management. That includes 160 assets across 15 countries, from Portugal in the west to Turkey in the east and from Denmark on the north of the European mainland to Sicily in the south. 

Schoonbrood talked to Bisnow about being the contrarian who believed in retail and not just logistics, the future of the much-maligned but stabilising sector and his perfect weekend flying in the blue skies above Britain. 

This interview has been edited for length and clarity.

Bisnow: How did you come to be in charge of Multi?

Schoonbrood: Multi was started by two guys in the Netherlands in the early ’80s, and at its height, was probably one of the largest developers of big shopping centres, offices and residential in Europe. 

Fast-forward a few decades, 2007, it got into trouble, took out a lot of debt. It was a heavily levered development company. Things kept getting worse until 2011 and 2012 when Blackstone came along. They looked at the company, but also [at] the underlying real estate that it owned on its balance sheet. And they really liked what they saw, so they then bought out all the individual lenders, about 12 or so, over the period 2012 to 2013.

I was at Oaktree Capital. I was setting up the NPL team, I'm a nonperforming loan guy. I got a phone call from Blackstone saying, “Hey, we've got this giant NPL for you, do you want to come and work it out for us?” So I joined Blackstone in 2014 and took indirect ownership of managing Multi as an investment for them as well as a lot of other things. 

Bisnow: How did you end up buying Multi from Blackstone?

Schoonbrood: At a very high level, Multi used to be a development company. Under Blackstone, it became their European retail asset management platform, and they loaded up a lot of investments [at its peak Multi managed €9B of assets]. Blackstone’s strategy is “Buy it, fix it, sell it,” so starting in 2016, we sold a lot. The market started to deteriorate a little bit in the U.S., and, Blackstone being Blackstone, connected all the dots globally. They saw this was happening, were quite proactive and started selling. We sold a lot of the retail investment, starting in 2016, effectively all the way up until Covid started.

At some point, they were thinking, “What are we going to do with this massive company with 600 people?” I mentioned to the guys in New York, “Hey, I'll buy it off you.” They thought I was joking. I said, “No, I'm serious.”

Bisnow: You must have been one of the few people at Blackstone who wanted to put money into retail rather than logistics?

Schoonbrood: They are big believers in logistics and have done fantastic deals in that sector. It’s not that I was against logistics. But my background is more structured finance, fixed income. So if you're a bond trader, you wouldn't buy a really low-yielding bond when you know that the interest curve could go up quite substantially, then inflation could go up. You do the complete opposite. You buy high-yielding bonds to derisk yourself, and you buy short-dated debt. So buying long-dated, low-yielding — which is effectively what logistics was, with a 3% yield with 10 year leases — I can see the play, but I can also see the play for maybe a little bit of diversification.

The whole market was just too negative on retail. Anything retail was just a dirty word, they just didn't want to touch it. That's when I said, “If everybody thinks it's so bad, this is fantastic for us because there's such an opportunity to start being a bit of a pioneer and start buying into the pockets where we do think there is upside.” We had the people and the skills in what is a heavily operational asset class. 

From an operations perspective, we have shopping centers with over 6,000 tenants, with 33 million visitors per year. That's a massive operation to manage — security infrastructure, cleaning, everything — and we had those skills in-house. I thought it would be a shame not to buy this business if Blackstone want to get rid of it.

Bisnow: How did it feel to go from the manager of a business that is part of a huge company to owning it yourself? 

Schoonbrood: It was the best feeling ever, it was amazing. I always wanted to become an entrepreneur, and I helped a friend of mine, while I was still at uni, take over an advertising business. I was studying management, economics and law, and I always wanted to start a business, but I felt like I had to finish university and earn my stripes in the corporate world. 

I was 17. I wrote him a business plan. We went together to the bank, and we managed to get 50K Dutch guilders, about €20K, and he took over the company. I joke that was my first M&A deal, but I always thought, how amazing must it be to run your own company. I’ve worked for a lot of companies — Credit Suisse, Morgan Stanley, Oaktree, Blackstone — and I wouldn’t trade it for the world, being exposed to so many interesting and smart people. That helps you shape yourself as a manager later on. 

Once we finally took control, it was a huge sense of liberation, obviously, but also it's a big reality check because all of a sudden, you’ve bought a loss-making business. So every month that you make a loss, Stephen and I would have to write a check. That's scary.

Coming to the realisation that we employ 580 people in, at the time, 12 jurisdictions, it’s quite a bit of pressure to make sure that you turn around this business. But I was 100% convinced, and I still am, that we could turn this business around.

Bisnow: And how has it gone since that 2022 buyout?

Schoonbrood: My reputation in the market, my nickname was “The Fixer.” I used to fix stuff, like problem loans. But then I realised that companies are not too dissimilar from other dysfunctional real estate assets.

And the strategy was fairly simple. Cutting down on the cost side is the easiest thing to do because the income side takes time to build up. So we went down to the nitty-gritty level as far as cancelling certain subscriptions, traveling economy instead of business class, lots of basic stuff. But we managed to turn the business around, and within about three months or so, we were already back in the black. 

And now we've opened offices in three other jurisdictions and won more than €1.5B worth of new mandates.

Bisnow: The billion-dollar question: Has the fall in retail rents reached a floor yet? 

Schoonbrood: What we're seeing across Europe, if we just look at our entire portfolio, was that footfall for the best assets has recovered to 2019 levels or pre-Covid levels. For other assets that are a bit more challenging, they are still about 10% below 2019 levels. But if you look at sales — and that's a very important indicator, because that dictates how much rent tenants can pay — tenant sales tend to be above 2019 levels, almost across the board. And at some centres, quite significantly above.

Now we're cheating a little bit because we’ve had a lot of inflation, and therefore it's not completely like for like. But I would say I honestly feel like we are bottoming out, and we may even have passed the bottom because it depends on the jurisdiction, depends on the asset class and quality of the asset. 

What we are seeing is that retailers that were very aggressive on how they would negotiate with the owners, saying, “We want to have a 12-year lease,and every two years we want to be able to break.” We’re starting to see less of that. In the UK, tenants are wanting to pay turnover rent more often, which we’re comfortable with, but leases are still a little longer there than in Europe.  

We even recently had an example where a well-known multinational tenant served their break and they thought, “We’re just going to renegotiate and push the rents further down.” But we knew this was going to happen because we're seeing this everywhere with this particular tenant. So we lined up an alternative tenant, a really good, solid anchor tenant, and they came in and paid not much more, but 5% more, roughly, in terms of rent. That gives us confidence. If you can replace an anchor tenant, that's a good sign that rents are bottoming out and retailers’ margins are actually looking quite decent on those stores.

Bisnow: What are some of the innovations you’re employing to make sure your assets stay relevant? 

Schoonbrood: When we bought the company, the first thing we did was set up our own proptech business. We have 25 people now, and we've developed our own proprietary software that helps us follow people throughout the shopping mall. So we can not only see how many people go in, we can also see where they go. And we’re now building an AI model that can also predict that if someone comes in — mid-30s, white male, certain social demographics — what is the likelihood that this person will go to Starbucks? And I want to go a level deeper: What is the likelihood that he will order an oat milk latte?

If I can predict that information with reasonable certainty, I can then start speaking and engaging with my tenants. This particular person tends to go 80% of the time to [Pret A Manger]. How about Starbucks? You come up with a special offer to target these people specifically with a 30% discount on your coffees, for an hour only, in close proximity to those stores, because we have proximity-based tracking, and that way we're transforming the way retail is being managed. 

I'm surprised people haven't done that before. I'm not a guru or anything, but I have been working in retail for a while. We have all these customers, but we're not actually engaging with them. We open a shopping mall, say, “Hey, here are 100 different shops, off you go.” And we just hope that they spend a lot of money and make our tenants happy in there. We can charge more rent if we just use technology to our advantage.

Bisnow: Give us a bold prediction for the rest of the year and beyond. And what are the threats you see out there?

Schoonbrood: Obviously Q4 is a very important quarter for for retail — Christmas sales — and based on the KPIs that we looked at this morning, it looks like this year could be quite a strong year for for retail, based on our portfolio at least. 

And I think that's a trend that will continue in 2025 from a macroeconomic perspective, with inflation easing off, interest rates coming down, albeit marginally, that will obviously give a little bit more more breathing space to consumers and therefore have a positive impact on spending.

What are the threats? I would say geopolitical risk, 100%. There's a lot of geopolitical uncertainty, and obviously that can derail some of the positive growth that we're seeing at the moment.

Bisnow: What is your weekend routine or favourite weekend activity?

Schoonbrood: For starters I have four kids, so that's always the top priority, for sure. Sunday mornings is mountain biking — I live in Surrey [in south east England, just outside of London], I’ve got the North Downs, I’ve got Box Hill. The faster downhill, the better. 

The other thing is flying. I have a little two-seater plane that I keep at Red Hill. So my ideal weekend is a blue sky, light winds, I take the plane, take one of my kids and fly to the Isle of Wight, have lunch, then fly back in the afternoon. 

I grew up in the Netherlands near a military airbase, and they used to have the F16 fighter jets doing dog fights above our house. As a child of 6, I thought, ‘That's what I want to be.’ I picked all the A levels that were required to join the Dutch Royal Air Force. Physics, economics, mathematics. I was convinced that was going to be my future, and I applied for the Air Force as soon as it turned 17 only to be told after all kinds of preselections that it wasn't quite for me. 

Being a commercial pilot seemed a bit boring, but I still always wanted to fly. So I started flying gliders at uni in the Netherlands, which, by the way, are fully aerobatic, so the loop-de-loops, flying upside down, which was fantastic. And then when I moved to the UK in 2003, I went to the New Forest, and I saw these crazy-looking planes flying out in formation. They were called micro lines. I had to look them up, I had never heard of them before. I had a motorbike, I drove to the airfield and I said, ‘I want to fly these things.’ And I've been flying ever since.