I’m in conversation with Jin Lee, co-founder of Royalton Capital LLC, a boutique private real estate investment firm in New York. Her tireless entrepreneurial drive along with her extensive experience in real estate make her the analytical business person she is today. We chatted as we walked along the deserted streets of Manhattan, whilst maintaining an appropriate distance from one another.
Jin, we have been talking about your power to analyze and synthesize. In other words, you know how to make sense out of a huge amount of information and then present this as an understandable and digestible piece to your client or partners. Can you explain how this works?
“My architecture training taught me to organize an idea behind a design in a straight forward way that drives all decisions relating to the space. The ability to communicate a vision is particularly relevant for real estate — be it in acquisitions, investment sales, workouts, syndication, project or property management. Working at large institutions such as Chemical Bank and GE Capital actually helped me build on this skill — you can tackle a complex portfolio transaction or single asset if you start with simple core concepts and then prioritize and organize efforts to execute a clear goal.
“I know people say this a lot, but investing is both an art and a science. I find that the finance part is straight forward. The qualitative analysis is much more nuanced and complicated, especially in an uncertain market like today’s. If you don’t understand what’s happening on the ground, you might be taking risks without realizing it. How people are living and working is changing so fast. It is a really interesting time to be an investor. In real estate, because assets have such a long life span, it is paramount to understand submarkets and anticipate changes in demand/supply dynamics before you invest, and equally important to adapt.
“Let me share two short stories. About 15 years ago, I invested in Manhattan House — an iconic and landmark property on the Upper East Side. At that time, large three-bedroom family apartments were not as readily available as they are today. We conducted an extensive survey on all condominiums for sale and broke down pricing by unit type. We learned that price per square foot for a 3-bedroom unit was much higher than for smaller units. Armed with this data, we combined units to create as many 3-bedroom apartments as possible. We used public data to unlock an opportunity.
“One of the first buildings Joshua and I invested in about ten years ago was in Bushwick, a neighborhood in Brooklyn. At the time, Bushwick was considered “edgy” but wasn’t really on people’s radar — everyone was still focused on Williamsburg. However, most residents moving in to Bushwick were artists who were being priced out of Williamsburg. In order to confirm our thesis that the neighborhood would continue to attract new residents, businesses, and investments, we spent over six months delving deeper and doing our own research. We rode the subway to and from Bushwick (watching who got on and off at various stops), walked the streets, spoke to local business owners, took bike rides around the neighborhood, and ate at local restaurants. We struck up conversations: we asked people on the street where they lived before, why they moved to Bushwick, and if they would consider living somewhere else. We found that many residents and business owners were passionate about being part of the Bushwick community. This is still true today. This work built our conviction in our thesis of the transformation of Bushwick into a creative community — way before “creative office” was a common theme and Brooklyn became something of an international brand.
“This is the kind of involvement and rigor we bring into every project and in my opinion, what makes us different.”
Love the anecdote Jin, that really clarifies your approach.
Jin Lee - Royalton Capital
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