Sonny Kalsi, founder and partner of real estate investing and advisory firm GreenOak, joined REIT.com for a video interview before participating in a panel discussion at the 2014 Real Estate Luminaries Series event on April 23 at Georgetown University.
GreenOak, formed in 2010, has an investment portfolio that spans the United States, Japan, and the United Kingdom.
Kalsi was asked whether the size of GreenOaks’s European portfolio reflects a lack of attractive opportunities in that region.
“It’s less that and it’s more (about) when we started investing. We started investing four years ago, and at the time, we thought the U.S. and Japan were at the bottom of the cycle and they were cheap, and, honestly, we were still chicken about Europe,” Kalsi responded.
“We went very slowly with Europe,” Kalsi said. He added that GreenOak became more active once the European Central Bank intervened to assuage the disruption in the region’s capital markets in late 2011 and early 2012.
Kalsi said opportunities in Europe are improving, but there are still challenges to be faced.
“It’s a little bit like the U.S. was in 2009. I think we thought there was going to be a tidal wave of assets [going up for sale], and it just hasn’t happened yet,” Kalsi said. He pointed to the Federal Reserve’s policy of quantitative easing and the large amount of capital flowing into Europe as factors behind this development.
Turning to the availability of capital for private equity real estate investors, Kalsi said the outlook is improving.
“If you are a powerhouse like Blackstone, you can raise money very well because you have a great track record,” he said. “But, for younger firms, it’s still hard.”
Kalsi also stressed the importance to GreenOak of operating with local partners in international markets.
“Having that local partner is really key,” he said. “I’m a big believer that real estate is a local business.”