Perspectives
McConkey: Halstatt provided experience throughout the lifecycle of a fund
The Wood Center will be amplifying the voices of students taking part in real estate-focused summer experiences in a student-produced series called Internship Reflections. Hear first-hand about the amazing professional development, project sites, and real-world real estate opportunities these students are being exposed to. This is the third installment in the 2023 Internship Reflections series.
This summer, I had the opportunity to intern with Halstatt Real Estate Partners (HREP), a real estate private equity firm based in Naples, Florida. Part of Halstatt, a private investment house, HREP has multiple closed-end funds which seek attractive risk-adjusted returns by investing in value-add, opportunistic, and ground-up development projects in high-conviction markets throughout the Sunbelt. I was fortunate to be with the firm at a very interesting time: one fund was reaching the end of its life and liquidating, one fund was fully deployed, and the latest fund had held its final close in the spring and was actively deploying capital. As such, I was able to get hands-on experience with the full lifecycle of both funds and individual deals. I was also able to interact with all facets of the CRE industry; I was involved in OAC meetings, presentations from potential operating partners, construction site tours, calls with leasing brokers, and more.
Allow me to go into detail on just a few of my most cherished experiences from the summer:
During my internship, I actively participated in the analysis of multiple Build-For-Rent (BFR) and Logistics development deals. From vetting assumptions in the sponsors’ ARGUS models to participating in calls with local experts to better-inform our internal underwriting, I received a fantastic education in the underwriting and due diligence process from the perspective of an LP equity investor. For example, at the beginning of my internship, the team received a rifleshot from an equity placement group regarding a Logistics development in Charlotte, NC. Throughout the summer, I was actively involved in the evaluation of this deal as it went through HREP’s meticulous internal process, even leveraging my Tar Heel network to connect with an industrial real estate professional in the Carolinas to get their opinion on the submarket. In the last week of my internship, I was in the conference room as the deal received approval from Investment Committee. Being able to get granular with this deal and seeing what constitutes a “winner” was an incredible opportunity.
Another time, I was staffed on a sponsorship-side development deal under the broader Halstatt company, which has land holdings from its legacy as a family office. The deal involved developing a Halstatt-owned parcel into a retail center. During this process, I sourced submarket data to assess the feasibility of the development and support our underwriting assumptions. Then, I helped assemble a debt financing proposal for the construction loan. This project was highly instructive, as it gave me exposure to retail and granted me more insight into the development process from the sponsorship side.
I was also tasked with an independent project that spanned the summer. It required engineering a system in Excel which could take raw demographic data (which can have inconsistent formats) from property managers of active BFR investments, parse the data using complex formulas and macros, and perform statistical analysis to quantify demographic trends in that particular property type. From there, the data would be extracted from Excel into a system which would generate automated summary reports which then could be circulated to both internal and external recipients. This result was a proprietary system which enhanced the firm’s asset management capabilities for existing deals, provided quantitative data to increase conviction in pipeline BFR investments, and allowed the creation of quality collateral which can be quickly generated for potential investors in future funds. From this project, I gained a wealth of knowledge about the BFR property type, and greatly sharpened my Excel capabilities.
I cannot begin to express my gratitude for HREP; the depth and breadth of their internship program is truly outstanding. Likewise, the team at HREP are some of the sharpest people I’ve had the pleasure of working with, and I am extremely appreciative of the time and effort they put towards my personal and professional development. I look forward to taking what I learned this summer and applying it in the classroom this semester as a Teaching Assistant for “BUSI-585: Introduction to Real Estate”, helping supplement the course content with my hands-on experience.