There's a phrase you hear constantly in real estate investing: "skin in the game." Every sponsor claims to have it. Most define it differently.
For us, "skin in the game" means our own capital goes into every deal first — before we accept a dollar from anyone else.
The alignment problem
Most syndications work like this: a sponsor finds a deal, contributes 5–10% of the equity (sometimes less, sometimes none), raises the rest from limited partners, and earns fees plus a promote.
When the sponsor's economic stake is small relative to the LP's, the incentives drift. Aggressive underwriting helps raise more capital and book bigger fees. Conservative underwriting protects investors but slows growth. Guess which one tends to win.
What "first dollar in" changes
Our model is different. We deploy meaningful operator capital in every deal we touch. Investor capital, when raised, supplements that — never substitutes for it.
This changes a few things:
It changes what deals we say yes to
If we wouldn't put our own money in, we don't bring it to anyone else. That filter alone kills most marginal deals before they're underwritten.
It changes the underwriting
Conservative assumptions on rents, vacancy, capex, and exit cap rates feel different when it's your own money. We've passed on deals that "worked" on aggressive numbers and didn't on conservative ones. Often we look back and were glad we did.
It changes day-to-day decisions
When a project hits a snag — and they all do — the calls we make are the same ones we'd make spending only our own money. No corner-cutting to protect a fee. No half-measures to ride out a cycle.
What it looks like in practice
We don't disclose specifics on public-facing material, but here's the general shape:
- Operator capital in every deal, typically a meaningful percentage of total equity
- LPs receive pari passu treatment on common equity — no preferential structures that disadvantage them
- Sponsor takes a promote only after a preferred return hurdle is hit
- No fees on capital we deploy ourselves
The deals that worked through 2008–2010, 2020, and the 2022–2024 rate cycle all share one trait: operators who were as exposed as their LPs. The ones that blew up share another: operators who weren't.
This isn't a guarantee. Real estate involves risk regardless of alignment, and even well-aligned operators have bad deals. But alignment isn't optional. It's the floor.
If this is the kind of operator alignment you've been researching, our investor relations page explains how to introduce yourself. Note: this article is educational only and does not constitute an offer of any security.