Berkadia’s Chinmay Bhatt on Global Opportunity & Insights
MBA NewsLink interviewed Chinmay Bhatt, Senior Managing Director and founding member of Berkadia’s JV Equity & Structured Capital in New York, about real estate opportunities around the world.
Bhatt focuses on raising equity and structured capital from domestic and international qualified capital sources. Since launching in 2019, he has assisted in the capitalization of over $4.3 billion across more than 100 property transactions, which comprises of over 20,000 multifamily/build-for-rent units and student housing beds across 21 states.
Prior to joining Berkadia, Bhatt was an investment banker and private equity investment professional and worked in New York and Dubai. He earned his MBA at INSEAD and his bachelor’s degree in business administration from the University of North Carolina at Chapel Hill. He has lived and worked in the United States, Canada, France, UAE (Dubai), India and Singapore.
MBA NEWSLINK: How are foreign markets doing? Are foreign investors approaching U.S. markets?
CHINMAY BHATT, BERKADIA: During a recent trip to Singapore and Hong Kong in collaboration with our alliance partner Knight Frank, I noticed that those markets and the region, in general, are bustling with activity. Singapore has a large number of institutional investors and is experiencing a steady influx of new capital due to the large number of private capital and family offices that have established themselves there recently. By some accounts, in the past few years, residential rents in Singapore have doubled, indicating a rapidly growing and thriving economy.
Hong Kong is currently opening along with the rest of China following the COVID-19 pandemic, and both Singapore and Hong Kong have implemented regulations that simplify the process of establishing family offices through specific tax benefits. These factors have generated a great deal of excitement about the potential opportunities in these markets.
I found that many institutional and family office/private capital groups I met on my trip had a tremendous amount of dry powder and they were considering U.S. real estate investments for at least some of their available capital to ensure they diversify their investments. They will be cautious as some are waiting for the near-term economic situation to play out before taking the plunge.
The next 12 months will be crucial in determining the foreign investors’ attitudes towards the U.S. market. However, when speaking with investors who are seeking medium to long-term investments, it is evident that they are optimistic about the potential of investing in U.S. real estate.
NEWSLINK: Why are foreign investors focusing on the student housing and multifamily space for opportunity?
BHATT: Many of the groups in Asia are well-versed in the student housing sector, having successfully completed deals in both the U.S. and the U.K. This familiarity gives them an advantage in this space.
Investing in student housing has also gained interest from many due to personal experiences with the asset class. Many potential investors have attended graduate or undergraduate programs in the U.S. or have children who have gone through the U.S. education system, making them more comfortable dealing with this sector.
Multifamily, in particular, has piqued interest in Asia as it is a newer concept in this area and there aren’t many purpose-built residential housing options available. While several players are targeting multifamily in the U.S., the physical distance can make it seem intimidating. However, foreign investors can benefit greatly from investing in the multifamily space, and there is an opportunity to educate them on the advantages. If you are sitting in Singapore, investing in something that already exists may seem more appealing than building a property from scratch. However, some groups have an appetite for development deal flow as they are targeting higher returns.
NEWSLINK: How can understanding foreign, local and regional markets help inform future approaches?
BHATT: Our team has significant experience working with overseas capital sources and helping them invest in U.S. real estate. Multiple members of our team, including myself, have lived and worked overseas and understand the intricacies of building relationships with capital from abroad. We are excited about Berkadia’s global alliance with Knight Frank as this enhances our overseas relationships. Our Knight Frank colleagues have been incredibly helpful, and we are all approaching this alliance with a great amount of excitement.
There is significant opportunity in helping their overseas relationships learn more about U.S. real estate, see the variety of opportunities Berkadia has access to and help them deploy capital into the U.S. There is also a significant opportunity connecting our capital relationships in the U.S. to deal flow in other parts of the world through Knight Frank’s large network of offices and experienced real estate professionals.
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