BIGGEST RISK with Sujata Shyam

Commercial Real Estate Pro Network

J. Darrin Gross

I'd like to ask you, Sujata Shyam, what is the BIGGEST RISK?

Sujata Shyam

So with what I do, Darrin, where we. Invest as a fund of funds, where we're investing as a group, and placing that capital as one investor into a property or an opportunity of sorts. In in my view, the biggest risk by far that's out of our control is the operator. So the operator, you know, we have trust in the operator. We're basically betting on the jockey. In a sense, there's lots of things we control for can't control for. Do we like the deal? Do we like the market? Do we like the property? Do we like the business strategy? But we're trusting the jockey to execute the business plan, or the operator, as we call it. So the biggest risk for me, really is that the operator either, mostly it's that they start, they start acting in their own self interest, rather than in the interest of all the investors. And we try to put lots of controls on that, but ultimately, they can still cause a lot of trouble if they decide to, if they get squeezed, or if they decide for some reason to get too aggressive, that is by far the biggest risk that we have to look out for, and that's why trust in an operator and trust in the people that you operating with, and that they have not only the integrity that's needed, but also the capacity to manage the types of deals that they're doing, as well as the decision making ability to know, have I gone too far? Am I, is this like a little too far outside my capacity? Do I need to scale it back so that I don't put investors capital at risk? That's really the biggest risk, is the people.