New home lot supply drops to cycle lows
Family Offices are one of the least understood capital sources in the real estate industry. While there is an adage that says, “if you know one family office, then you know one family office”, our Managing Director of Capital Markets, Steve La Terra, discovered some commonalities while conducting a deep dive analysis into this component of the real estate private equity world.
Family Offices (FO) are typically established to diversify a family’s wealth beyond the business that created their wealth. Often established by an entrepreneurial patriarch or matriarch to provide for future generations, FOs seek to create generational wealth. Establishing a FO generally makes financial sense when there is $100M or more of investable capital. It is common to find FOs investing for the long-term, which makes real estate a viable option.
Family Offices can be categorized as either Single Family Offices (SFO) or Multi-Family Offices (MFO). A SFO is limited to one family, although may include multiple generations. Investment decisions within a SFO are generally made by an individual or a small number of siblings. A MFO is a collection of two or more families that invest together. They tend to operate by committee with consultants such as accountants or attorneys providing deal flow, expertise, and professional services.