Friday January 24th, LadyDrinks Women’s Networking hosts the first of its International Women’s Day Dinners for 2020. This dinner is special as we host Napa Valley vintner Raj Patel. A bespoke menu has been created to match his Patel Winery wines.
The gentlemen of Pinnacle Capital have generously agreed to sponsor the wine for this Winemakers dinner in the private dining room of Kiran’s Restaurant in Houston. We take moment to learn more about them.
Joya: What is Pinnacle Capital?
Arun Karur, Co-founder: Pinnacle Capital is a commercial Real Estate Investment, Development and Management firm with exclusive expertise and focus on investments in the state of Texas. We are on a mission to give people the opportunity to improve their financial futures and diversify their investment portfolio into commercial real estate, which has been traditionally difficult to access for individuals.
Joya: You and Azeem are the co-founders. Could you share a bit about your backgrounds?
Arun: We have been successfully working for over 10 years in proprietary Texas real estate investments. We founded Pinnacle Capital to invest proprietary capital into lower-risk commercial real estate investments with a view to double our investors’ money in 5 years. Between myself and Azeem, we offer expertise on a range of items from deal origination through appraisal to structuring, execution, asset management and disposal.
Azeem is an expert in pulling deals together. He is a licensed real estate agent in state of Texas with expertise in strategy, origination, knowledge of real estate compliance, and regulations. He has over 13+ years of experience in Residential, Commercial, Property Management doing over $10 Million+ annual transactions. Before his life in real estate, Azeem worked for over 12 years in retail banking, handling over 550 clients at brand names such as Fluor, T-Mobile, etc.
I complement him by bringing deep investment expertise in managing portfolios of residential and commercial assets worth over $10 Million in value. Before this venture, I was in Trading and Risk Management consulting as a Group VP. I built a Product Solutions group in 2014 for Publicis Sapient from ground up and oversaw a team of 150 people. I built products for the energy and financial services industry and grew that to an annual run rate of $20mil in 4 years. Before that, I managed the global trading and risk management practice for Publicis Sapient (a team of 500 people) with a global practice P&L of $75mil.
Joya: You are providing an access point for women who may wish to invest in commercial real estate, but are overwhelmed by the prospect of it. Why are you the likely choice?
Arun: We provide access to institutional-quality opportunities, with unique liquidity options, greater transparency, and with lower fees. Our top 4 reasons why Pinnacle Capital is the right platform for commercial real estate investment for you:
1. SPECIALISTS IN OFF-MARKET TRANSACTIONS — Our extensive network of relationships means that we can find assets that are off market, so our partners get access to privileged origination. Those relationships include tenants, investment brokers and professional services firms such as lawyers and accountants. But we also tap non-traditional sources, such as hedge funds that hold non-performing loans secured on property.
2. TAKING ON CHALLENGING ASSETS AND MAKING THEM COMMERCIALLY VIABLE — We are prepared to buy less obvious assets and turn them into attractive investment propositions. Every asset, every tenant is different, and thanks to Pinnacle Capital’s appraisal process we find ways to unlock the value hidden in those differences. During the hold phase of the investment — typically from 3 to 7 years — we then work to make sure that each investment is performing to expectations or better. And if not, we take appropriate action.
3. LONG-STANDING PARTNERSHIP OF OVER 10 YEARS STANDING — We founded Pinnacle Capital as a way to invest our own capital in lower-risk, real estate investments. We’ve consistently delivered outperforming returns over multiple business cycles, and we now manage substantial real estate assets across Texas. We have also built up a team of specialists with practical experience, from deal origination to structuring, asset management and the ultimate sale of the property.
4. SKIN IN THE GAME — Pinnacle Capital co-founders commit their own personal capital alongside chosen investment partners in every deal.
Joya: Why did you elect to partner with LadyDrinks for this event?
Arun: You are inviting executive women to have a seat at the table. We want to empower more women to participate in investments and take control of their financial futures, hence LadyDrinks was a natural partner for us.
Joya: Could you share the profiles of the properties in your portfolio?
Arun: Some examples of investments currently in our portfolio -
1. Value added opportunity in Richmond TX — We purchase a 16000 sq. ft empty retail center that needed rehabilitation and then we fully leased it out. We invested 720K in the property in 2016 and in 2019 we returned the full amount to the investors and now it’s a self-sustaining property with about another 800K equity for the investor. We aim to sell this in 2021 and achieve our target of more than doubling the money for our investors in 5 years.
2. Opportunistic investment in Spring TX — We purchased land for cash in 2019 with a goal to build a retail center of 15000 sq. ft. We are currently in design and permitting which is scheduled to be completed in Jan 2020 with the goal to have the retail center fully built out by Oct 2020. We will then fully lease out the center and do a cash out refinance by end of year 3 of investment and sell the asset in year 5. We are projecting a 2.x equity multiple for our investors over a 5 year investment period.
Joya: Who is your ideal client and what is the minimum threshold for investing in a Pinnacle opportunity?
Arun: Investors buy units in the investment offerings. One unit value is $25,000. Investors can buy as an individual entity or under an LLC.
Ideal investors are people looking to diversify their investment portfolio from equity and bonds into real estate(outside of residential) and have a long term, buy-and-hold investment strategy. Most of our investors are also people who like full control over which asset/project to invest in, get personal one-on-one attention from the investment managers as well as have complete transparency of the investment during the investment gestation period.
Joya: Why it’s important to invest now in Houston commercial real estate?
Arun: For investors with a long-term, buy-and-hold investment horizon, markets that offer long-term and stable growth rates are better opportunities than those that rise quickly over a short period of time.
The top four commercial real estate markets in Texas — Dallas-Fort Worth, Houston, Austin and San Antonio — benefit from large and growing populations, thriving diverse economies, and world-class research universities. Since 2010, the population grew by 3.5 million, a million more than either Florida or California. That translates into one and a half million new homes. Almost 2 million of those people came from elsewhere, attracted by jobs and by reasonable home prices. Those attractions are still there — look at the rate of job growth in the three big markets this past year, close to 4%. That’s twice the national average. Bigger markets like Texas have higher price-to-rent ratios hence providing outperforming returns on investments. Real estate investors in Texas currently benefit from rising rents, declining vacancies, and positive net absorption
Here in Metro Houston for example, some market data points from Q2 2019 are key indicators why commercial real estate investment is prime to get into now -
Multifamily occupancy reached 90.2% and rents rose in Q2 2019, with both metrics significantly increasing year-over-year. Multifamily absorption year-to-date 2019 reached 10,094 units, which is more units than were absorbed in all of 2018. Office asking rents increased from $29.28 per sq. ft. to $29.47 per sq. ft. between Q1 and Q2 2019. Retail asking rents rose by $0.40 per sq. ft. in Q2 2019 and now average $18.07 per sq. ft. triple net. Retail vacancy declined to 5.5%, a decrease of 0.1% compared to Q1 2019. Retail absorption in Q2 2019 of about 1.1 million sq. ft. is nearly double compared to Q1 2019
Joya: How can the women in the room contact you?
Our website — www.pinnaclecapital.us and fill the short form to become an investor https://www.pinnaclecapital.us/become-an-investor and we will contact you to setup a one-on-one meeting.
Email and phone –
Arun Karur — akarur@pinnaclecapital.us 713.419.6520
Azeem Karmally — akarmally@pinnaclecapital.us 832.651.6829
Joya: Thank you for giving us a 360 view of you and your company. We look forward to hosting with you!
Jan 24TH HOUSTON LADYDRINKS WINEMAKERS DINNER WITH RAJ PATEL, PATEL WINERY RSVP here
