Re-viv

04/10/2025

Tariffs are escalating for China, which will put even more pressure on already high construction costs.

What does that mean for real estate?

🧱 China supplies a huge share of construction inputs – steel, aluminum, glass, ceramic tiles, PVC piping, fixtures, and finish materials.

🚧 New development is already struggling to pencil.

📈 With costs rising further, the new housing pipeline will slow.

🏡 That makes existing properties even more valuable.

Adaptive reuse just got even more compelling.

Instead of building from scratch, conversions leverage existing structures (foundation, walls, windows, facade, HVAC), eliminating the bulk of material costs. It’s faster and a smarter play in a high-cost environment.

01/15/2025

We’re excited to unveil 1700 I Street, our second office-to-residential conversion in Sacramento, and a deal that combines stability with exceptional upside.

💡 Why this deal works:

1️⃣ Priced to Win: We secured this asset at a cost basis made possible by today’s distressed market conditions—opportunities like this don’t come around often.

2️⃣ Built-In Stability: Four commercial leases and an income-producing parking lot mean reliable cash flow during the permitting and redevelopment phases.

3️⃣ Unmatched Demand: No other housing projects are slated for delivery in Midtown Sacramento, a high-demand neighborhood with limited supply.

4️⃣ Tax Benefits: Located in an Opportunity Zone, this deal potentially offers substantial tax advantages for investors.

5️⃣ Local Experience: This is our 3rd property in Sacramento, and we've been operating there since 2018.

Let’s reimagine Sacramento together. 🚀

01/06/2025

New year, new data, same story for office: Nationwide vacancies hit another all-time high.

Metros that were already struggling are getting buried even deeper, particularly on the West Coast. Denver and California are at the top of the list.

Meanwhile, debt repayment on these buildings continues to be extended and pretended, leaving plenty of banks with sweaty palms.

Multifamily isn’t immune, either:

Vacancies are climbing, especially in Class A apartments. Turns out inflation and affordability concerns don’t drive demand for Class A finishes and amenities.

In Texas, vacancy’s climbing and multifamily rents are dropping across the board. Is this a sign of overbuilding, or is it instead laying the infrastructure for another wave of population growth?

Our New years resolution? Connect more investors to office conversion opportunities while the winds are still in our favor.

12/18/2024

The current market for micro apartments in the US -- a few key takeaways from some of the best researchers in the business, ULI and RCLCO:

💸 More affordable yet better returns: Micro units rent for an average of 36% less than traditional apartments ($830 vs. $1,310), while delivering nearly double the rent per square foot ($2.74 vs. $1.43).

📈 Higher occupancy: ULI research shows that the smallest units consistently achieve occupancy rates over 91%, outperforming larger units.

🏠 Tenant satisfaction: Micro-unit residents report satisfaction levels comparable to traditional renters, appreciating location, amenities, and features (though concerns around layout and perceived value persist).

This is not about developers driving up prices — it’s the market readapting to the realities of urban demand. Micro units could be the stepping stone for young professionals, bridging the gap from student living — optionality to live in prime locations while still saving money and paying off debt before family formation.

⚙️ There are still design challenges: Issues with spatial layout and floor plans contribute to slightly lower lease renewal rates. Companies like Ori are tackling this by designing flexible, functional designs to make small spaces more livable.

Micro units aren’t a silver bullet, but given the rising need for affordable urban options, why not build more? 🤔

12/12/2024

We recently highlighted the growing debt of deferred infrastructure maintenance in the suburbs, but there’s more to the story:

As Jay Parsons pointed out, America’s rental housing is the oldest it’s ever been — 44 years old on average — and it’s showing its age.

At this point in America’s trajectory, our population has spread out, major metros are established, and large infrastructure projects are largely complete. Housing deliveries peaked in the early 1970s, and the deferred costs of maintaining this aging stock are piling up.

What does this mean?

Beyond building more housing, there’s a growing need to maintain and adapt older stock. The 2024 Harvard JCHS report highlights declines in quality and emphasizes the critical need for energy efficiency retrofits.

That’s why we believe the adaptive reuse market will continue to grow.

In NYC alone, deferred housing update costs are estimated at over $70 billion. The market for adaptive reuse is massive, growing, and under-served, making it a prime opportunity for firms building expertise in this space.

With new build and materials costs continuing to rise, this is an era of efficiency and adaptability for housing, not unchecked growth.

If deferred maintenance keeps climbing, what other markets do you think will shift or open up?

12/09/2024

Mini Monday urbanism dive:
After WWII, America embarked on a radical transformation: we spread out and built sprawling suburban communities. This grand suburban experiment marked the first time in history that humans tried this entirely new pattern of development.

🚧 The Hidden Costs

Suburban development patterns initially boost city revenues, but over time, they become financially insolvent:

- Property taxes don’t cover the long-term costs of maintaining infrastructure (at suburban densities)
- Cities inherit infrastructure debt — trillions of dollars in deferred maintenance for roads, utilities, and public services.
- Instead of addressing this, many communities keep building the next suburb, compounding the financial strain.

The result? Declining tax revenues leave many cities in fiscal crisis.

🏙️ Why We Do What We Do: Our mission is to revitalize communities through impactful real estate investment strategies.

High-density areas drive financial productivity: unlike sprawling suburbs, urban cores generate significantly more tax revenue per acre while requiring less infrastructure per capita.

That’s why we’re so excited by adaptive reuse these days:

- Converting vacant or distressed office buildings into workforce housing repairs holes in the urban fabric.
- Like an ecosystem repairing itself toward highest and best use, adaptive reuse strengthens cities from within.

It’s an eye-opening concept, and an important one to chew on if you’re working in the real estate world.

12/02/2024

Office conversions are mainstream now. Here’s why that’s exciting for developers like us, who focus on adaptive reuse:

1) Aging office buildings in secondary markets are finally priced low enough to make conversions viable, with 309 U.S. projects now planned or underway, per CBRE.

2) Cities are increasingly adding incentives like tax breaks and subsidies to drive conversions.

3) This is a pivotal moment in the evolution of cities — an opportunity to reshape urban cores with higher housing density and more diverse housing types. Conversions can make cities stronger and vibrant.

The timing is perfect, but it’s unclear how long the window is open…

Full article: https://www.wsj.com/real-estate/commercial/office-conversions-find-new-life-after-property-values-plunge-ada4722f

11/12/2024

Is AI a trustworthy tool for investment analysis? We plugged the Investment Deck for our most recent office-to-resi deal into ChatGPT to see what it thinks. Here are the results:
I’d say this is a must-try.

👉 GPT 4o can quickly understand and summarize slide decks. It took less than 5s for it to analyze our 32 page OM and have a strong understanding of the deal details.

👉 The accuracy of GPT’s recall and summarization is astounding. It’s an effective companion for quickly pulling out deal terms and highlights. Big potential time savings if you need quickly review investment materials.

👉 When pressed to be critical of the deal, GPT was able to highlight risks that we didn’t directly cover, analyzing details of the OM against greater economic trends and risks. I was impressed with its sophistication in connecting multiple stats from the deal in order to reason through concepts like debt coverage risk, absorption and lease-up, and the composition of the operations team.

👉 Where did ChatGPT fall short as an investment analyst? I think the main thing is it takes some of the information we provided at face value, instead of digging deeper to validate (or invalidate) it. One way to get around this is to re-prompt it in another thread asking it to be critical.
If you’re an investor, there’s massive potential for saving time in investment analysis. It’s a great tool to summarize deals and pull out key risks and unknowns.

If you’re a sponsor, this is a great way to stress-test how you’re presenting your deals. It will reveal gaps in information and common questions and doubts you’ll face in the fundraising process.

What else should we test against AI? Stay tuned for a further breakdown, our team uncovered valuable insights experimenting with AI deal analysis.

11/05/2024

We recently outlined our strategy for quickly evaluating the viability of office-to-residential conversions. While we've detailed this process in a more in-depth breakdown (https://www.linkedin.com/feed/update/urn:li:activity:7256719994833506304/), here’s what the numbers look like when you apply it for our current 1390 Logan project:

- Replacement Cost Analysis: Our General Contractor estimated the cost to replace the existing Core + Shell (foundation, utilities, framing, insulation, parking, etc.) at $𝟭𝟮𝟬/𝘀𝗾𝗳𝘁. Note: this does not include the land value.
- Our Acquisition Price: $𝟵𝟬/𝘀𝗾𝗳𝘁 for both the building and the land.

When your acquisition price is well below the replacement cost, as in our case, it's a strong indicator that the deal is worth pursuing.

11/04/2024

Great quote from JLL CEO Mark Gibson on Chris Powers' podcast:

"We think the office is dramatically oversold, and I think most investors will look back in five years and wonder why they didn't make a play."

We’re thrilled about the momentum and upcoming news on our 1390 Logan deal. For those unfamiliar with the project, you can learn more and watch the webinar here: https://invest.re-viv.com/exclusive-access-to-logan-webinar/

I highly recommend listening to the full podcast, lot of insights: https://podcasts.apple.com/us/podcast/365-mark-gibson-ceo-jll-capital-markets-in-depth-analysis/id1410549811?i=1000669796621

*Accredited Investor Criteria:

10/31/2024

According to Yardi’s newly developed software tool, the Conversion Feasibility Index, which measures the suitability of office-to-residential conversions, Denver alone has over 1.4 million square feet classified as “Tier 1” - meaning they’re top conversion candidates.

A few standout insights from the report:

- More than 1.2 billion square feet of office space nationwide is viable for conversion. Top metros have over 20% of their stock as potential candidates.
- Office prices continue to plummet , with some properties being sold at up to 90% less than previous prices.
- More cities are starting to actively encouraging conversions through tax breaks and accelerated zoning processes, with New York and D.C. leading the way.

Interested in learning more or taking advantage of this generational opportunity? Click the link below to see a live opportunity: https://invest.re-viv.com/exclusive-access-to-logan-webinar/

The Conversion Feasibility Index provides property-level scores assessing the potential for residential conversion of office buildings.

10/29/2024

Years ago, re-viv's founder Matt Ryan launched and built a green retrofits company in Charlotte, NC, driven by a passion for sustainable growth.

Every small business that chooses to invest in these underserved areas is a reminder that economic development doesn’t always come top down. Creating a high impact and valuable business doesn’t require a moonshot idea or VC investment — there are opportunities across every city in America to build something important for the community.

Threading new business investment through downtown cores keeps a town fresh and economically resilient. It creates a unique sense of place that can’t be copied by big box stores.

To the entrepreneurs who are taking the plunge on Main Street: Keep pushing. Your work is vital to creating thriving, sustainable communities.

It takes a lot of optimism—and the help of the community. But here are some people who have tried.