By the early 1970s, my investment thesis, focusing on high-growth, small cities, had run its course. The investment community at large had caught on to the idea, and these cities were drawing new competing capital for assets, thereby lowering cap rates (the rate of return based on expected income) and making real estate in these markets more expensive. In response, for a short time, I shifted from buying existing assets to financing new property development. Different than serving as a developer who assumes all the risk for a project, I fed the equity step-by-step, based on measurable
...more
