In our 13th installment of the Family Office Vlog Series, Peter Harper, Managing Director and Head of Advisory, provides an insightful analysis of Family Office Real Estate.



Peter Harper: Hey guys. Peter Harper, Managing Director and Head of Advisory at the Asena Family Office. This is the next installment of the Family Office Series, and today we’re going to be talking about Family Office Real Estate. A bit of background on on us for those of you not familiar with the business; the Asena Family Office is a dual SEC- and ASIC-licensed multi-family office that specializes in advising Australian and Asian-based families on U.S. direct investments and mergers & acquisitions.

Peter Harper: So, before we kick into the concept of Family Office Real Estate, it’s probably good for us to recap on what a family office is, right, sort of Family Office 101. So a family office is largely regarded as the legal structure that a family of significance, right, whether that’s a family that has inherited a substantial fortune or a first generation founder who has built and sold a business that has substantial liquidity, and now has you know more than 50 million liquid to invest in the market that they would establish to manage all components; complex components of their life, right, from the financial side. So, effectively the investment, whether it’s private and public markets; so portfolio construction, private and public markets, sort of asset allocation of the family capital, and what we consider the complex admin or the back office right? So, anything associated with understanding outflows; so, complexity around multiple non-income producing assets; so, houses, cars, boats, planes, etc., and then any of the infrastructure or the people they need to run all of that, right?

Peter Harper: So, for any family that has managed to leverage or take significant risk and hit a material exit event, it’s probable that for most of those, as they then look to de-risk the leverage that they may have had with respect to their capital pre-liquidity, is to look at real estate as an investment asset class, right? There’s a whole bunch of different reasons as to why that would make sense, right, particularly in the United States. A lot of that can do with the sort of, the fact that real estate over time being asset-backed can provide a lot of financial security for a family. You also get the benefit of, you know, income rent cash flows that throw off of the real estate. Then you also have a tax code that is heavily leveraged around the shielding of free cash flow and the long-term production of large scale investment portfolios that can benefit family offices, right? Peter Harper: So, the best, first thing for most families is when they think about real estate, is an asset class. There’s a bunch of different asset classes that exist within the real estate sector, you know, whether it’s multi-family, commercial, standard residential. There’s a lot of different choices for those families. You know, and so, we’re often asked the question as to, okay what is the scale that a family office would need to be before they would look at these; look at real estate as an asset class and what sort of size should they look to, you know, leverage into a long-term, sustainable real estate portfolio, right? And that really depends on, you know, the size of the family’s balance sheet and the sophistication of the team that they’re employing.

Peter Harper: Now this dynamic has, you know, all certain asset classes have performed better than others, sort of pre- and post-Covid, right, and so, you know, for a lot of family offices that were very deep on commercial real estate prior to Covid, there’s been, you know there’s been a lot of capital that’s been lost over time, but there are also bright sparks emerging in different sectors, right? So, the market today is not the case that, you know, with a sort of high interest rate environment, that all real estate is doing poorly. It’s really more, it’s more fragmented than that, and it really depends on the market; the geographic market within the country when family offices are making choices, right? But, like anything, the reason that we exist is that ultimately it’s difficult for families to kind of make that choice and pay for the infrastructure that they need to get a family office from day one. So, you know, they look at whether they should be working with a multi-family office on a fractional basis, which is what Asena Family Office does, right? Cheers, guys.


If you have questions about Family Office Real Estate, reserve a consultation
with one of our advisors in the Contact Us section to the right.

Peter Harper