YouSaid · the spoken record

Alan Forman

lines on the record: 72
first: 2023-09-25
most recent: 2023-09-25
sittings or episodes: 1
sources: podcast

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“Work with people that you really like, and that's one of my cardinal rules of my new business is I'm only going to work with people I like and enjoy. And that's what I did most of the time at Yale, and it served me really well.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say just perseverance and hard work, working hard, doing the business, and just being present and diligent is the huge portion of this business. And I think finding something that you're passionate about makes all that much easier.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have to say David and Ellen Schumann. Ellen was my boss for my first eight, ten years in the office, and she was the one that I worked very closely with day to day. Obviously, David was on top of that. Ellen is still a mentor to me today. I'm on a board with her to have lunch with her all the time, and it's been 33 years since she hired me. Hitching my wag into Ellen and David was a good thing and pays dividends today still.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the biggest mistake I made at Yale over the years was managers that had some strategy drift in their portfolio. And because they had done very well in a different strategy, we gave them a little bit of too much of the benefit of the doubt. And I wish we had just dug in a little bit more. Not all strategy drift is bad, but I'd say the bigger mistakes where people took their eye off the ball.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“My biggest pet peeve on the investment side is lack of disclosure, just being open and honest about what the issues are and as opposed to having to dig in and trying to find them.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“What I try to do is try to ask them, where do you want to go? Where do you want this firm to go? What are your goals and objectives? My goal is to help you achieve your goals. It's not about me. I want to be in the background. I want to help you achieve whatever you want to achieve. And getting people to really think about what they want and how they want to get there. And that can be a lot of different things. It could be lifestyle-wise. It could be wealth-wise. And also acknowledging where they have shortcomings. If they do well, I'll do well. And it's the same thing with when we found partners at Yale. If the partner did well, we structured up a deal that Yale did well. And that's the win-win that we're always trying to create in a world that's not always about win-wins.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“What I really like doing is working with the general partners. And so I'm working with a bunch of general partners, hoping to work with some younger up-and-coming groups and help them become the next great new firm, really enjoying that piece of the business and being a strategic advisor and helping them navigate all the stuff that I've seen over the last 30 years in a way that hopefully will enable them to get where they want to go a little faster, a little safer and fewer bumps in there.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“I found myself gravitating toward the GPs anyway because they were more of my peer group. So I spent the next year really thinking about what I want to do with this 30 years of experience.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“It was funny because I said to David at my 30th review, I've done this for 30 years. I'm not sure I want to wake up in 10 more years and say I've done this for 40 years. It's been a great run. Want to see what else is out there? I don't know if I want to do something else. And he was very nice about it. He said, why don't you explore for a little while and see what you want to do? And I came back to him and I said, I think doing this for 10 more years is probably not exactly what I want. So I decided to leave soon thereafter. He asked me to stick around for a little while longer. Unfortunately, during that window, he passed away, so I ended up sticking around for another year to help out with the transition. I used to go to these annual meetings and I was the youngest kid in the room, and now I go to the annual meetings, and I was the oldest guy in the room. That didn't feel great. A lot of my peers were aging out of the business or becoming CIOs.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it was the people, it was the investment opportunity trying to understand was at an unforced error or was that a market thing that is understandable and they still have what it takes to turn the ship around.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“On underperformers to understand whether we want to buy more when it's cheap, like a value investor, or do you want to exit because it wasn't a great place to be? There was one manager that got off to a really rough start in the Bay Area and their investment period was up and they were only about half invested and Dave stepped up to the plate and said, let's extend this investment period. And they've just hit the ball out of the park. That's hard to do. It's really hard to do.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“It could be a lot of different things. It could be the manager decides to do something different, like in the example of Kimpton, they sold their management company and they were no longer an operating company and that changed how they did things. Hard to say at the time they thought this was a good thing. It didn't fit exactly what Yale's model was. Others decided to do other things. They wanted to broaden their product offering and things like that. Obviously track record is a huge piece of this and the better they did. That's a big wind at their back and the worse they did. More questions were asked. One thing that David was really good about, and this taught me a lot, was looking around corners and looking at the people. And everyone's going to have a slump or an issue. And how do they respond? What's the opportunity going forward as a result of the mistake? Was it a mistake by the firm? Was it the market? So we dug in a lot.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Relationships where it was a great partnership for 30 years and we've navigated markets with them and helped them and worked with them. And it's just a very rewarding relationship in all senses of the world.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Once one of our partners goes public, it's the beginning of the exit of the relationship. It may not happen overnight. We're usually a very large shareholder of the entity. Sometimes we're on the board. So exiting is slow, but there's no more opportunity to invest on a private basis. It's just you own your shares. In most cases, the going public route is the end of the investment relationship over time. And that's fine. It was a great run with a Douglas Emmett. We all made a lot of money. If they ever decide to go private, we'll think about maybe there's something to do again. And that's the way we operate. Some worked overtime for decades and some worked overtime for shorter windows. And then they went elsewhere. Douglas Emmett was a good example that was a shorter relationship that didn't go on forever. And there are others like the Shorenstane Company was one of Yale's early.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think they had nine funds. They all did very well. And then they went public and they did a great job for themselves and for Yale.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the early ones was a group called Douglas Ammet, and a public company now very successful. This was back in the early to mid nineties, and they were pursuing massive distress in Los Angeles. One example that always resonates with me, when we were underwriting some of their early deals and trying to understand how they look for opportunity, things were so bad in California back then that we underwrote no residual to the assets in at least one deal. It was not even a land residual. We assume that these assets just went away at the end of the lease term because things were so bad, it's almost impossible to sort of get your head around it today. But back then, that was not a completely far-fetched outcome that was going to happen. And we would underwrite deals. Is this a reasonable risk adjusted return, assuming the world comes to an end? And then if it doesn't, we'll do great.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“I just think we tried to be a little bit more involved in the real estate and trying to be a sounding board for the investment decisions. We never had discretion. We never had legal authority. But we really wanted to understand what they were doing and how they were doing it and why they were doing things that they were doing. And also, I'd say our role changed as I got older in terms of being more involved in helping the manager manage their business and helping them think through things that will affect their business long term. That's a part of the business that I really enjoyed. As I got older, I was more of a peer with these general partners. So I was viewed as more of an equal and I had seen a lot. I really enjoyed being more involved strategically helping them think about the business as opposed to just the Specific deals”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Career is just because less oversight is needed, there's still need oversight. Yale still needs to be on top of things when a manager's shooting the lights out. You still need to make sure that.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's all over the map. And I think that's the interesting part about the real estate business. Each one is different. Each one has their strengths and their weaknesses and their blind spots. And they're all trying to figure this out in some different parts of the cycle of where they need to be. And to me, that's what's really interesting about the business. There were some that the managers were more on autopilot because they were at a phase of their company's evolution where they didn't need a lot of oversight and others where they were early stage or maybe they were reinventing themselves where they needed more advice. And that was a nice thing to work on where you had a range of groups. The goal was always to get them closer to autopilot. And you'd start out with a young 32 year old that's creating a firm. And over time, they hopefully get to a place where they need less oversight. Maybe one of the mistakes I made early in my career.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Say this to a lot of our managers, you're managing three or four different things at once, you're managing a portfolio of assets, you're managing a fund, you're managing an investment management business, and you're managing a team. And you have to manage all of these things in a way that works for all the different constituents. And it's really hard. And it's really complicated. The guy who got to the top of a lot of these real estate firms is a deal guy. And he's not a organizational guy and he's not an investment management guy in the same way that maybe in other asset classes. So helping them think through these types of issues that they should be thinking about or even just raising them so they start thinking about creating an organization that can handle all these different constituencies that need to be addressed.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“You invested alongside of organizations that you may have first put early capital in, and then they expanded and grew over time. What are some of those aspects of building the business the right way that you saw, that you found yourself giving certain kind of advice repeatedly to some of the managers?”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“The people in the business by definition almost didn't have a lot of experience and there wasn't a lot of institutional players. And we were trying to find people that were just as good as the other people in the rest of the portfolio, which made it challenging early on to find the best and the brightest when they were early. And that's where I think having these relative multi-strategy shops is very helpful because they actually help educate us to understand, oh, there's these other sectors over here. They think it's relatively attractive. Maybe we can do that in a bigger way somewhere else with someone else once we understand the opportunity a little bit better.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“We decided where we wanted to play, I think it was a combination of looking at our portfolio, seeing where maybe there were some holes in it, what we're seeing out in the market, where maybe there's some interesting stuff going on. Usually because it was some distress where we thought maybe we should be taking a harder look at this and finding, A, we'd have a bigger seat at the table during a distress period. And B, hopefully with all these new managers, it's great to get in when things are cheap and have them get their firm off to a good first start. It was still people-based focus, but we definitely looked at different sectors and tried to figure out where we could find the next interesting opportunity. And I'd say we were a little slow on some of these nichier sectors where these non-traditional real estate sectors like student housing and self-storage, part of that was”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“So essentially, Yale has always just been an equity investor, unless it's an opportunistic thing within an equity structure. We tended to only invest in the equity and we only wanted the inflation protection. We wanted the upside and we thought our managers could add a lot of value and that would inure to the benefit of the equity holders.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“We did do some international, one of the smartest things we didn't do is we didn't do any emerging market real estate. And we actually didn't spend any time even looking at it. We just didn't think it was an interesting place to be. We tended to be a value investor. It was all new builds in India and China and Brazil. So we literally didn't do anything. Most importantly, we didn't waste any time spending a lot of resources traveling around the globe. We did do a modest amount of investing in Europe. And I'd say the outcome was mixed. I think our network and all the stuff that we brought to the table in the US was just a little less good in that part of the world. And it probably showed up a little bit in the results. We definitely backed some good people. Timing also matters and we started that later. So when things did go bad in the GFC, there was less history.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Didn't invest with a lot of groups that had these really broad platforms. There were some hedge funds that did stuff. There were definitely some real estate firms that tried to do multiple strategies. We tended to move away from them over time as they tried to do different things. Essentially, the groups that where we did see some sort of sideline business or adjacent business, there wasn't a lot of that in our portfolio.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Some of those choices you'd see at times in organizations that came out it differently. So you could think about a distress credit shop that adds real estate or adds mortgages. You think about hedge funds at time that have private allocations that move into real estate. What was your experience when they participated opportunistically in real estate?”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Tended to focus a lot on specialists. I'd say the portfolio was probably 80 to 90 percent specialists. And we just thought being really good at one thing was the way to go. And a lot of the companies were vertically integrated and they had an ability to add value and do it all themselves. The generalist tended to be a little further away from the assets, but also the flip side is they looked a little bit more at relative value. There was sort of a balance there versus the specialists that knew the asset probably better and the sector better and the market better, but also doesn't have the benefit of seeing the bigger picture in the same way that the generalists do. We tried to learn from the generalists. If somebody has a choice and they're doing one thing, that's a signal that maybe we should think about.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, there's always the excitement of the younger, newer, affirm where they're just starting out, the energy level is as high as it can be. They're really excited. And you have to temper that with their unproven, on the other hand. And you're trying to balance those two things. And then you have on the other side the groups that you're more comfortable with that you've known a long period of time, you know what they're all about and what they do. But maybe that spark is just not as bright as it once was, but they're also better at what they do because they've done it for a long period of time. And how do you sort of balance those things? We tried to create a mix of both. And I think you wanted to have a portfolio of up-and-coming potential superstars. And you also wanted to have a bunch of.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“A mature portfolio, and you have certain organizations that you've been with for a while, and then you're looking at newer ones. What was your experience in the relative risk return profile of the investments that they're making?”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“And what they were doing and how much risk they were taking. And that's when it became challenging. Some things were foreseeable and other things were coming out of left field.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's challenging. You're relying a lot on the manager to make the investment decision of how much they want to buy and how much they want to sell. We relied on that heavily with our alignment of interest. Could we have been a little bit more tactical at times? Maybe. It's hard to judge. But the model was to trust the managers and be informed about what they're doing and make judgments about what they were doing. But if they had demonstrated ability to navigate cycles, that gave us a lot of confidence. That wasn't always easy because as the cycle became longer, different managers behave differently. Some took a lot of chips off the table and sat on their hands. Others went longer the market. We tried to rely on our managers and also our own judgment to calibrate risk in what they're doing and really the more expensive things got, the more we would try to understand.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a level of conviction with the manager that you're thinking about how much conviction do we have about the manager and what's their opportunity set and you're trying to balance those two things and you're also trying to maintain your seat at the table. So you try to think about being tactical, but also being long-term in terms of the relationship and making sure that you have a seat at the table that you want through thick and thin, even if at some times you'd rather have a bigger or smaller seat.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Coming from where we came from, that wasn't the mindset that we had coming out of the GFC that that was necessarily the way we should play it because that's not what had happened over the past 30 years. And that was a change that was harder to see prospectively.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Historically, we took a pass on the sector. If we couldn't find the right group, we just did not pursue the sector. And industrial was a good example. Even once the sector became much more interesting and institutional, it took us a while to find the right person. And we missed some opportunity there. I think one thing that's really interesting that's changed in the real estate business that you were getting the beta regardless of the property type. So focusing on alpha was all that mattered. Unfortunately, post GFC, that's completely flipped on its head. So now you have office in the tank today and industrial's been super hot for the last 10 years. So all of a sudden you've had sectors just go completely in industions and getting the beta would have been really good for those property types even if you didn't get a lot of alpha.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Situations where there's an opportunity set you'd like to pursue, you're trying to find the right partner. How do you decide if you're not finding the partner whether you just get exposure to it? Think of it as like a beta to that space while you're waiting compared to just saying no, unless you line the opportunity with the people, you're just not going to deploy the capital at all.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“It took a while because the endowment was growing like a weed, so essentially even though the portfolio was growing and the manager was, we couldn't keep up with the growth of the overall endowment. So it probably would have been fully built out sooner had the endowment not grown as much, but it was growing so fast that we were always trying to project where we needed to be and we would never get there. And that was true in all private asset classes. So it was a nice place to be in that there was a lot of capital to play, but there was pressure to grow the portfolio.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Know it was very bottom up. It started out with just people. If we didn't get the people right, we didn't worry about what their strategy was. We really focused on people alignment of interest and then understanding their strategy too. And we didn't worry about sectors back in the day that we weren't involved with. First of all, there weren't that many sectors back then. I mean, it was literally office apartments, retail and industrial and lodging. So there weren't as many options to invest. So we thought if we found people in each sector, over time we would create a diversified portfolio that worked for Yale.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Say you hear about location, location, location. You think about different property types and how that might drive returns or just cyclicality to it. Think about what assets you are buying alongside finding the people that you want to be partners with.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're very focused on alignment of interest, so whether it's having a meaningful co-invest, whether it's fees that cover overhead and hopefully aren't any huge profit center. There's one pool of assets, so we're all in it together for better or for worse. Some of these things have been tweaked over time, but the original thesis was of very pure structure. We're getting married. We're in this for the long haul together. We'll eat our own cooking and hopefully it will work. And it was a true sense of partnership.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Using your relationships, you're kissing a lot of frogs, trying to see who's out there. And you have to realize at the time, money was really scarce. This is the early 90s. So when you are approaching people with a new fangled idea to do a new model, it wasn't like they had a lot of other options. We were going to write a decent sized check at the time. That was very appealing to them. They wanted the alignment of interest and the long-term partnership offering that we were providing them.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“We find the efficient frontier, all these economists like Ibotson and Stephen Ross and people like that. And they just said, find good people. It was the opposite of the Ivory Tower mindset. Just go find good people doing really interesting things and set up the right structure and it'll take care of itself. That's what we did. We obviously were learning as we were going. And one of the exciting things was David was learning as he was going. So he was shoulder to shoulder to us and we could watch him in action in his early prime.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“David Swanson was a first principles investor and he looked at the real estate business in the 80s and said this doesn't make any sense. And he thought that the fee-based nature of the business, there was no alignment of interest. There was lots of separate accounts. It just wasn't the right model for how he was looking at it with a blank sheet of paper. He looked over at the private equity venture capital business and said, that's a business that is structured in the right way and we should model our real estate business off of that. And that's what we did. So essentially, right when I joined Yale, Ellen and Donna and to some extent myself wrote a strategy paper on how we would transform the portfolio. directly held to more of a partnership model. And it's funny because we went to all these very impressive Yale professors and asked them, how do we create a portfolio?”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Fifth Avenue and Yale needs a computer store next to Tiffany and Gucci. So we turned him down and in hindsight, Harry then did the deal with him at the GM building five, six, seven years later. It was a good ending for everyone.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“We at least half of the retail to Hugo Boss, and we had the second half teed up to lease to a German fashion company called Escada. We were on about the one-yard line with a lease, and we got a call from this guy who said, I represent a company that is not doing that well, but they have a new plan for a retail business, and it's called Apple Computer. They wanted to open up their first Apple store in our building. And we were very close to wrapping up a deal with someone else. We spoke to Steve Jobs and he explained his vision for the business, which to be honest is exactly what turned out to be the case today. And he offered us more money and speed. And we just felt leasing the building to a computer store on Fifth Avenue. You have to realize at the time there was no iPod, iPad, iPhone. It was a computer store. And we're like, I don't really think.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“We ripped off the front of the building and expanded it and Yale probably made $100 million on the redevelopment. It was a great experience for me. I got to learn all aspects of the real estate business. Helps me do my job today, which is understanding what our partners are going through and how they do what they do.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“When the market improved, we went to sell the deal in the late 90s. So essentially, we marketed the asset for sale. And at the time, the Russia crisis hit in 1998, despite being under contract, the deal fell through, and Harry McLow at the time was the buyer. And we had come up with a plan to not only sell the building, but sell the dream of redeveloping the retail at the property and let the next guy take that to wherever they wanted to go. And Harry saw the vision. To be honest, he was the only one that saw the vision. But when he couldn't close because he couldn't get financing, we approached Harry and asked him for some advice on how we could do it ourselves. And myself and one of my colleagues went to David and the president of Yale and we said we have a plan to redevelop this asset. We have to get it rezoned in New York City next to Trump Tower.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“We were in charge of managing it with IBM pension fund and they were helped out by equitable. So equitable was the asset manager. And we ran the asset. Then Equitable decided to sell. Yale had a right of first refusal to match any offer. And to their surprise, when they agreed to sell the deal for, I think, $47 million in the mid 90s, Yale stepped up and matched the offer. So we're in the deal for $60 million and it was almost a $500,000 square foot asset.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yale owned mainly office and retail assets. They owned one industrial asset and their crown jewel, which was, I think, about a 5% position in the endowment at the time was a half interest in 717 Fifth Avenue. The opportunity to purchase the asset was given to Yale by one of Yale's alums who was going to buy it for his own account. And believe it or not, we paid fourteen million dollars for a fifty percent interest in Fifth Avenue asset, which is mind-boggling these days.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think each person figures out their own way. My way was to get as close to the managers as possible and to really understand what they're doing and be valuable. So I would not only have some input into what they were doing, but also understand what they're doing and why. I say to the younger people in the office, when we back at an early stage manager, there's a window where you need to be the person that they call when they have an issue. And that window doesn't stay open forever and you need to take advantage of that window so that when they're 20 years later, you're still the person that they call. And if you miss that window, they'll find somebody else to do that. And I prided myself on having, I think people in the office would say maybe the best relationships with the managers in the office. I think that's a two-edge sword at times, but I understood the managers really well. I was close with them. I understood what they were doing.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source