Beyond The Bio: 16 Questions With Mountain Real Estate Capital Founder Peter Fioretti
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This series profiles men and women in commercial real estate who have profoundly transformed our neighborhoods and reshaped our cities, businesses and lifestyles.
When Peter Fioretti’s company turned 25, he celebrated with a little jaunt — to the North Pole. The Mountain Real Estate Capital founder and his travel partner and brother Bob Fioretti are no strangers to adventure. The two have been swimming with sharks, skydiving in Australia, on a safari in Africa and have walked over hot coals.
However, Fioretti’s ultimate adventure was founding Charlotte-based Mountain Island Real Estate Capital in 1993. The investment firm specializes in lending capital to homebuilders and land developers. MREC also operates in the development of master-planned communities with strip malls, shopping centers and mixed-use facilities. It has offices in Minneapolis and San Diego.
After 25 years of success, Fioretti celebrated with his four-day North Pole trek, which covered 40 miles on skis. He said he never thought about turning back.
Bisnow: How do you describe your job to people who are not in the industry?
Fioretti: I am a real estate entrepreneur, focusing on opportunistic investment strategies throughout my career. To be more specific, Mountain Real Estate Capital invests in compelling real estate strategies with high risk-adjusted returns, that most other institutional investors haven’t focused on yet. We partner with real estate owners/developers that excel at what they do and have core values that are consistent with ours — including integrity, transparency and hard work. We value their market knowledge and key relationships, ability to source off-market deals, and ability to execute much better than their competitors. In this cycle we have invested $1B to acquire and develop large illiquid land parcels and partially built projects. We have acquired and provided substantial growth capital to a regional homebuilder that was ultimately sold to a Berkshire Hathaway company, and we have provided strategic lead investor capital for growing midsize commercial real estate owners on value-add deals.
Bisnow: If you weren’t in commercial real estate, what would you do?
Fioretti: I am working on this now, to complement the Mountain business. My focus is to supercharge the careers and businesses of real estate students and entrepreneurs, to significantly improve their success and the many others affected by them. I have started to establish nonprofit programs to accomplish this including endowments, internships and investment programs at Lehigh University and UNC-Charlotte business college. The investment program at UNCC includes an interesting "Shark Tank" experience, where successful business leaders provide tough feedback on real investments proposed by the students, and funded by our endowment. The students then manage these existing investments, while making new ones each semester. We are also using MREC to set up a for-profit real estate investment program to augment this effort.
I would also spend more time serving ill or underprivileged children. Instead of just donating money, I would continue to set up self-sufficient programs that would have a significant impact on the quality of their lives.
Bisnow: What is the worst job you ever had?
Fioretti: Although it was a good learning experience and introduction to how Wall Street works, my worst job was my first job in a Wall Street bank training program. Although a great opportunity, it just was not for me. I found it to be very boring and focused on how to follow pre-established systems and rules. It was not results-oriented enough, and didn’t allow me to go after any tangible goals.
Bisnow: What was your first big deal?
Fioretti: I remember my first big deal very well; it was on my 23rd birthday. I had purchased a four-story retail/apartment building in Hoboken, New Jersey, with my entire savings of just $5K cash. I also got another 11 Lehigh University friends to contribute $5K each, for $60K in total. This was very risky as I was investing 100% of my net worth and leveraging my equity with 11 of my close friends. Fortunately, this was largely successful as it parlayed into a $200M real estate portfolio within five years.
Bisnow: What deal do you consider to be your biggest failure?
Fioretti: In 1992, we had a thriving development business renovating older buildings for residential and mixed-use in Hoboken and Jersey City. All our lenders were savings and loan associations, and became taken over by the Resolution Trust Corp. Although all of our projects were doing well, the RTC called the loans on renewals and technicalities. We lost the ability to refinance, and most of the properties were taken back by the RTC. The big failure here was our inability to negotiate an acceptable deal with the RTC, to retain ownership. However, as a result, we started Mountain Funding in 1993. We raised new capital and provided private funding to builders/developers to acquire assets at a discount from the RTC and other lenders. We acquired and completed abandoned projects with pride and success. We started small in the NYC metro area, funding up to $5M per deal. By 2005 we grew to 20 states and funded $2B. We also learned who was really on our team, as they remained loyal during these hard times.
Bisnow: If you could change one thing about the commercial real estate industry, what would it be?
Fioretti: I would instill much higher standards of integrity. I believe we currently have lackluster standards, with both legal and moral tolerances. Those who do not conduct business with higher-level standards of integrity should be shunned from our industry. With these higher standards, we could impose more transparency, streamline legal processes and establish consistent reporting requirements across all spectrums of the real estate industry.
Bisnow: What is your biggest pet peeve?
Fioretti: On real estate investment presentations, I laugh at projected internal rate of return figures that are stated to the decimal. For example, stated projected returns of 18.15% versus 18%, or 22.32% versus 22%, are way too exact. Once you get over 15% IRR, whole numbers are much more relevant! There are so many things that actually go better or worse than expected on these deals, so there is no need to be so exact.
Personally, my biggest pet peeve is when I am in a meeting, or having drinks or a meal with others, and someone takes out their cellphone to check and send messages. Hello, be present! And pay attention to who you are with, unless there is an emergency. If this happens, I usually request to hold their phone until after we are finished.
Bisnow: Who is your greatest mentor?
Fioretti: My father has been my greatest mentor. When he was alive, I noticed how he always did the right thing, no matter what. He had great values, like impeccable integrity and hard work ethics. I aspire to be more like him every day. To work hard, do the right thing, and have integrity — keep my word and do what I say.
Bisnow: What is the best and worst professional advice you've ever received?
Fioretti: The best professional advice would be to “go with your gut.” Going with my gut or heart has proven to be more reliable, especially when making decisions about people. Much better than focusing solely on stated facts.
The worst professional advice was to diversify into other things. I believe that success comes from incredible focus and repetition, in striving to become an expert. Diversifying can become a distraction.
Bisnow: What is your greatest extravagance?
Fioretti: My greatest extravagances are adventure, travel and wine.
I love the outdoors, training for challenging adventure experiences and exploring untouched lands — volcanoes, glaciers, caves, mountains, snow powder, etc. The training is often exhilarating, and the adventure of experiencing these places is quite amazing. This includes hiking Mount Kilimanjaro, race car driving school, fighter planes, running with the bulls in Pamplona, sky diving and scuba shark diving in The Great Barrier Reef. I am lucky enough to be one of the few people who has trekked to the North Pole, which I experienced with my brother Bob. That was certainly a challenging, once-in-a-lifetime experience, and even more special to do it with my brother.
Wine has always been a part of my life, especially growing up in an Italian family. I have traveled to many parts of the world to experience different types of wine regions, cultures, grapes, wine-making techniques and styles. I collect and enjoy many types of red wine from around the world, but my favorites are wines from the smaller vineyards in Tuscany.
Bisnow: What is your favorite restaurant in the world?
Fioretti: My favorite restaurant is in our farmhouse in Tuscany, where we bring in several local chefs for amazing dinners paired with local wines. We also have cooking classes in our kitchen, where we make our own pizzas in a century-old stone pizza oven. After dinner we enjoy port and limoncello with homemade desserts, while playing bocce. We source food, wine and olive oil from the organic gardens and 100 acres of vineyards in our backyard, which overlook the small, medieval town of Vertine. We love our prized rooster Lorenzo, and his eight hens which lay fresh eggs for us every morning. There’s not a better culinary experience for us in the entire world!
Bisnow: If you could sit down with President Donald Trump, what would you say?
Fioretti: This is a conversation I would like to stay out of as this topic has become very divisive.
Bisnow: What's the biggest risk you have ever taken?
Fioretti: On my 25th birthday, I quit my promising real estate career on Wall Street to continue with my own real estate ventures on a full-time basis. I left a great job with lucrative compensation, working with top real estate executives in a large international investment company. I did this to struggle with no current income, to buy small run-down properties in Hoboken and Jersey City. This paved the way for the success of my various real estate companies, and helped shape who I am today.
Bisnow: What is your favorite place to visit in your hometown?
Fioretti: My high school is my favorite place to visit. I remember those years as a happy time in my life. I have a lot of great memories, but also a lot of lifelong lessons I learned from my teachers, crazy football coaches and my friends. I was actually suspended from school several times for reasons that still make me laugh to this day. During high school I had several businesses, and the most memorable would be “Fioretti Perfumes.” I made and sold my own perfumes that were replicas of famous fragrances. I continued this venture to help my parents pay for my college education at Lehigh University.
Bisnow: What keeps you up at night?
Fioretti: Not much keeps me up at night. I have a pre-sleep routine that includes reflecting on the things I am most grateful for, acknowledging some of the wins that day and planning how I can be a better person tomorrow. This clears my head, and I experience a wonderful sleep.
However, if there is one thing I am worried about, it’s the increasing civil unrest in this country, the increasing possibility of a massive uprising in the U.S. with widespread disorder and destruction. I find this troublesome. We need to figure this out, and encourage free speech without destruction. We need to preserve our great nation for our younger and future generations.
Bisnow: Outside of your work, what are you most passionate about?
Fioretti: I love spending time with my family and best friends, and creating lifetime memories. Whether it’s dinners or celebrations at our home, fun travel or bucket list experiences, I really enjoy the time I spend with my close family and best friends. And even better when I can create defining moments or once-in-a-lifetime experiences that are both meaningful and memorable.
Experiences like traveling with family in an RV, family tradition of visiting national parks every summer, Napa wine tastings, glass making in Murano or hiking Hawaii’s live volcanic eruptions and feeling the heat from moving hot lava.
Vacations like hosting in our farmhouse in Tuscany with wine tastings, cooking classes, pizza making and biking to nearby vineyards and medieval villages; or our St. Barths villa with amazing boating, diving and beaches, food and wine; or visiting Iceland’s glaciers, ice caves and volcanoes.