What Makes A CRE Leader? Verde Capital’s Jake Reiter To Offer Up Answers At Philly Event Sept. 21

Philadelphia commercial real estate sales have slowed due to the economic impact of the pandemic, rising interest rates and higher costs, causing banks to pull back on lending, particularly for office. Meanwhile, downtown activity has only returned to 47% of pre-pandemic levels due in part to public concerns about crime.

Yet the multifamily sector is showing resilience, with 1,070 units added in the first quarter and more than 16,000 on the way. Since the shift in the market, more real estate executives are learning how to navigate industry challenges. 

“It’s important to adapt and to be patient for when new long-term opportunities reveal themselves in the market, especially in times of distress,” said Jake Reiter, co-founder and president of Verde Capital, a real estate investment and private equity firm outside of Philadelphia. 

Reiter will be a moderator and participant at Bisnow’s Philadelphia State of the Market on Sept. 21, where he will join other panelists in discussing how CEOs can maneuver in today's real estate landscape. The event will be held at Live! Casino and Hotel. Register here. 

Bisnow spoke with Reiter about some of the trends he is seeing in Philadelphia’s CRE market, best practices for CEOs to create successful real estate businesses and how Verde Capital continues to be a force in the industry despite challenges in the market. 

Bisnow: What are the trends you're seeing in Philadelphia’s CRE market across different asset classes?

Reiter: Per The Wall Street Journal, Philadelphia’s office occupancy rate was hovering at about 40% in recent months — and approximately 57% in the Center City district — with businesses demanding shorter leases and requiring less space. Some of this behavior is due to conditions brought on by the pandemic and because more people want to work remotely. The combination of the office worker exodus, taxes and crime have contributed to the current state of office occupancies.  

Retail, dining and hospitality downtown have been impacted by many of the same factors affecting office. We’re seeing a lot of money being spent on protecting employees, deterring theft and other expenses that have resulted in certain central business district locations of Target, Wawa and Starbucks closing. 

On the plus side, we’re seeing that multifamily is generally healthy and seeing steady growth, particularly in workforce housing. 

Bisnow: What inspired you to be at Bisnow’s Philadelphia State of the Market event?

Reiter: It gives me the chance to meet up with industry colleagues in the public and private real estate space to discuss the state of the market as they see it.  

When I attend Bisnow events, I have the opportunity to speak with other CEOs and exchange ideas across multiple asset classes, such as multifamily, hospitality, retail and student housing. Also, this event is a great forum for people outside of real estate who are interested in thought leadership. For example:  

• What’s going on with the public and private universities and health systems? These are two major drivers of employment in Philadelphia.
• What’s happening across other asset classes?

I always learn something by attending Bisnow events. 

Bisnow: You’re moderating the Navigating the Real Estate Terrain: A CEO Perspective panel. What do you think are some of the best practices for CEOs to create successful real estate developments? 

Reiter: I think communication, information and transparency are the most important factors. Though I’ve been doing this most of my life, I seek and consider a variety of opinions from other investors, developers and other market constituents when I invest money into real estate. When contemplating investments in real estate, I ask people that I trust different questions, such as, “Is this a good location?” or “Am I thinking about this correctly?”

Because we utilize strict risk management practices, it’s good to have different perspectives to help build more informed decisions.

Bisnow: Why is effective communication key between collaborators and stakeholders?

Reiter: As an example, let’s say we’re investing with a developer in affordable housing in a neighborhood. We always engage community groups in a neighborhood. Does it have the right zoning and density? Will the city view this as a positive and approve any variances? And then, ultimately, is this additive to the community and accretive economically?

Bisnow: As co-founder and president of Verde Capital, can you describe your role and how the company continues to evolve despite industrywide challenges? 

Reiter: I think as CEO, one has to take the time to be thoughtful strategically and be open to adaptation in an ever-changing environment. Over the past several years, we have seen the cost of materials, labor and debt rise while experiencing inflation in certain asset classes. We have employed a strategy of maintaining modest leverage, extending and laddering debt maturities, locking in fixed-rate debt and being nimble as our keys to success.  

While we’re beginning to see early signs of distressed assets, which we are taking advantage of, we are continually evaluating the state of the market. I think being patient and steadfast with a solid long-term strategy and the right partners will help to create generational opportunities.

Bisnow: Why is it important that Verde not only continues to cultivate talent but creates a strong company culture? 

Reiter: Creating a culture for cultivating talent and mentoring early can help build consistency and longevity. We want to find people that are not only passionate about real estate but who want to take the time to learn. Education and experience are key. 

Also, we want to do things ethically and correctly inside the company so that it creates a blueprint for our community to do well. I think with this attitude, we can continue having a positive impact on CRE.

For more information on the event, register here. 

This article was produced in collaboration between Studio B and Verde Capital. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.