YieldStreet Head of Real Estate Says Ongoing Acceptance of Retail Crowd Raising for Property Market to Continues
The team at Yield road, an online marketplace for a wide variety of asset-backed investments, has launched a series that aims to highlight some of its great team members who “enable Yieldstreet”.
Mitch Rosen, Senior Director, Head of Real Estate, has been with the Yieldstreet community since joining in 2018. He recently spoke about how his career “has shaped his view of investing and where he hopes Yieldstreet will land in the next few years. ”
Rosen reveals that, as Head of Real Estate at Yieldstreet, he is responsible for leading the team that deals with the verification of originations and the corresponding due diligence of all opportunities offered by Yieldstreet in the real estate sector.
Rosen notes that in 2001 he worked in the real estate industry for a publicly traded mortgage REIT called Capital Trust. The company had focused on subordinated debt for commercial real estate “of all types”. He also mentioned that he had learned “to look at CRE critically and, above all, to think creatively about how to structure these investments in order to protect our position from problems that arise”.
He worked at Capital trust from October 2001 to May 2004 and later with an alternative asset management company, Marathon wealth management. Rosen focused on underwriting the bridging loan sector during this time.
After the financial crisis in 2008, he shifted the focus to the securities side, “mainly CMBS, CRE CDOs and subordinated bonds”. He then left Marathon in February 2013 and switched to the alternative asset management company, Brigade capital.
“Brigade, with approximately $ 15 billion in assets under management at the time, is best known as a high-yield corporate loan and a distressed store. I was hired as a senior credit analyst and trader for the CMBS and CRE debt businesses. “
Rosen also announced that he had met Milind and Michael back in July 2018, and they “brought me in to run the real estate business.” Rosen also noted that he was the first “dedicated” investment manager to join the company.
After spending about two decades on the traditional buy side, he was cautious about joining a fintech company that “wanted to change the way retail investors distribute capital,” added Rosen, confirming that he would accept his offer and officially launched in October 2018.
While commenting on some of the great challenges he had gone through during his extensive career, Rosen noted:
“The crash of 2008 at the beginning of my career gave me an enormous insight into when something goes wrong, what it looks like and how to solve the problems. We had a pretty large portfolio, over $ 2 billion in real estate loans and stocks, all of which were in distress. That meant that we had to work through them, take our lumps, twist where we could, and take back everything we couldn’t handle. “
He pointed out that the problem was that their borrowers were not “only affected by what they had with us, but any property they owed in any way” was affected. He also mentioned that it was invaluable to have gone through that fault and then “come out with it and make lots of money buying distressed bonds and other assets at attractive prices.”
Rosen commented on what, in his opinion, the “future” of real estate investment is and how real estate investment has developed specifically from where he is based:
“The future is tied to Yieldstreet, to be honest. I think the continued adoption of crowd-raising capital in retail real estate will only continue to flourish. Surely there will be investors picking the wrong deal or partner, but the key is diversification. “
He added that in his view, crowd platform investing for CRE “will be the most accepted and earliest accepted retail segment for investment, and I believe that even institutional companies and managers who have shied away from it in the past” are , will start to embrace and partake in it. ”He also noted that his guess is that“ we’re in the third inning of it – there is an entire runway for the field to develop ”.
When asked what happened to the incumbent’s disruption, Rosen noted:
“Disruption gives access to investors who have not had access to these types of opportunities in the past. … technology just made it much more efficient, faster and through a better interface. So when we talk about “crowdraising” … it has been around for 40 years, but Yieldstreet has formulated a more efficient and transparent process. “
When asked to what extent Yieldstreet is “unique” in this crowdfunding space, Rosen said:
“We provide access to multiple asset classes that no one else really has, and we’ve focused on leverage in the past – even though we’re starting to grow the equities business. That was also the reason why we were better known, especially in the commercial real estate sector – we try to offer not just one, but good access. We spend a lot of time thinking about who we’re playing with, who we’re investing with, how we think and trying to provide extra protection, which is what Yieldstreet brings to the crowdfunding space. “