Weekend Interview: 5RiversCRE's Dr. Ishnella Kaur Azad On Leaving Medicine, Losing A Leg, Starting An Empire
This series gets into the heads of the decision-makers of CRE, the people shaping the industry by setting investment strategy, workplace design, diversity initiatives and more.
Dr. Ishnella Kaur Azad is on her third career, this time with the goal of helping women “build generational wealth to take care of their families and their dreams.”
The 2022 Houston Women Leading Real Estate honoree grew up cleaning and painting houses and mowing yards, which allowed her and her father, Hardam Singh Azad, to start 5Rivers CRE. In the early days, it was a small commercial real estate business meant to help fund her medical school tuition and get her father through a layoff from his former engineering career.
Azad went on to complete medical school and work as a psychiatrist in California. But the growth of her business and her mother’s declining health brought her back to Texas to do real estate full time.
She now works as chief operations officer for 5Rivers CRE, a private equity, asset and property management firm that owns 23 properties and more than 4M SF of retail shopping space, counting $550M in assets.
Azad’s success was inspired by a major challenge. A hospital-acquired infection forced her to undergo a leg amputation in 2021, and she now wears a prosthetic. Though 5Rivers was launched 27 years ago, Azad said it was only three months after she got her new leg that she thought, “I’m playing for real now.”
Speaking with Bisnow, Azad detailed how she was inspired to take a different approach to commercial real estate, one intended to create generational wealth for herself and others — as long as they’re south of the Mason-Dixon line.
The following has been edited for style, clarity and length.
Bisnow: What led you to leave your medical practice and get into real estate full time?
Azad: I grew up doing real estate, residential, with my mom. She had single-family homes.
I actually started a real estate company before I went to medical school. You can't get scholarships to medical school, and it's like a hundred grand, so I was like, ‘OK, I gotta work.’ I took a loan, and [my dad and I] started a real estate company. I was hoping it would make some money to pay that loan back. And it did. It was like The Little Engine That Could.
I was in psychiatry, I was living in Santa Monica. And we got to about 1M, 1.5M SF. I was like, ‘Oh, this sucker actually took off. I have to actually take care of this because my family is now the fiduciary responsible for all these investors.’
So I built this up. When I came in, we had 30 investors, we had 1M SF, and we had about $90M in assets. I took it on full time in ’16 or ’17. And we've grown from 30 to 350 investors [and] from $90M in assets to $550M in assets. From that 1.5M SF to 4M SF. So because I was like, ‘Oh, OK, well crap, I have to do this as my new career,’ that's what I did.
Bisnow: What has that transition taught you?
Azad: It's the same as medicine.
Real estate is a relationship business. Psychology, psychiatry, medicine, in general, patient interaction is a relationship business. It's a connection between one person and another, where you are trying to be of service to them.
The last deal we just did, and this is a perfect example: We had to put down $28M in cash. And then we did another one a month before that, total, all in, $35M. I don't have any signed paperwork. I don't have an agreement with anybody. There's no signature or even a receipt I've given to anybody. They've just deposited [it] into my account on not even a handshake — on a conversation on the phone. I could literally just empty it out and leave town with $35M in cash. Way more than I'm making from this business, right?
I believe that you can still do business on a handshake, a verbal handshake. My integrity, my ethics, are what allow me to do this. I don't need a single piece of paper or signature on anything to get $35M in cash last month. That’s a people relationship.
Bisnow: Can you tell me a little bit about your business and what it specializes in?
Azad: We do one thing, which is outdoor retail shopping center, large-box space, 200K to 400K SF [in the southeastern U.S.].
Eighty percent to 90% of our tenants are these large, 30K SF-size tenants. I can have one property manager be over like four properties and do like 1.2M SF. Because it's all big-boxes, middle wall-to-middle wall, foundation-to-roofing systems, it's all on the tenant. They cover it all, they pay for it all.
I pulled all my money out of Houston. When the money flooded in from China and from California, the land got too expensive here.
Ross Dress For Less is going to pay me about the same, maybe give or take $1 in rent, whether it's here, or it's in Jackson, Mississippi, or Atlanta, but dirt is way cheaper over there, so my investors make more money.
If I buy outside of a major city like Nashville, I only ever buy in a secondary market, about 20 miles outside the city center. It's suburban communities, so they have money. If I don't buy in a secondary market of a big city, I will go to a regional power center, which is like 400K SF in size. It pulls from 35 to 50 miles away.
I'm either the best in that secondary market, best in class, or I’m that one-stop monopoly because I'm out in the middle of nowhere, pulling in from that.
Bisnow: You’ve previously mentioned that you want to create generational wealth for women. Why is that and female representation in your business important to you?
Azad: It's everything. And it should be everything to everybody. Because if a woman is not empowered, there is no community, there is no society, there is no freedom.
Whether she has had kids or not, a woman represents the mother of the community. It's critical that we empower women to take real power. And real power comes from being able to walk out that door and go put money down on your own — on your own apartment for rent, buy your own transportation, not be stuck, beholden or trapped by somebody else's power.
And in our current civilization, money equals power. So if I can make a woman independent financially, we empower her to create anything she wants, and to make her dreams and her goals come true.
Bisnow: Can you tell me about one of the women that you have helped to make rich?
Azad: Her husband was a post office worker. She was a stay-at-home mom.
They made good money. They're making $18, $19 an hour, back in the ’80s and ’90s. He got injured in the line of duty, got hit when he was out walking the post office route. And she got a small life insurance policy upon death.
And then he had a small IRA that came to her, we're talking $300K, something like that. It would have lasted about three years. So I suggested that she go and she talk to a few different people, tax attorneys, estate attorneys, planners, etc. Talk to her family members. And if she would let me, let's come up with something that would work for her, along with her attorneys and her CPAs.
So we structured a situation where she could invest with us. We did projects where it would be like 10 years, and then it would flip into the next one, and it would flip into the next one ... we would then flip and flip and flip.
If you have kids, you can keep flipping it for decades and decades, right? So that's what she did. And in the last 35 years, it flipped like eight times. She's more than a millionaire now. Didn't even graduate high school.
Bisnow: You say you only buy property south of the Mason-Dixon line. Why is that?
Azad: I'm a Southerner. I want to make Southerners rich. I'm a Red State girl. Whose states didn't shut down during Covid for all that long? We have 380 tenants. We only lost four.
Bisnow: What are the big opportunities you see for the CRE industry this year?
Azad: Last year, it was nuts. So much was bought and sold. It was like a feeding frenzy. It was crazy. And that's good. There was so much going back and forth with all the institutional buyers.
I think this year that people are actually accepting now, there's a recession. It's real. They're slowing their roll, so to speak.
Q1 has been dead so far. I got debt brokers trying to reach out to me, like, ‘Hey, do you need money?’ Like, if I had a product to buy, I would. It's just quiet.
So I think what's going to happen this year is going to be a recalibration, hunkering down. It's this very kind of, ‘We don't know what the hell is going on. We're gonna hunker down and just wait.’
That's not us. That's my opportunity. There's going to be a lot of people that will want to sell or need to sell because their loans are coming due. They have to refinance. Ooh, opportunity. I'm looking forward to growing this year. I'm going to take advantage. I'm going to be that contrarian who looks for that needle in the haystack. But now, there's gonna be a lot more needles, and I'm going to pounce.
Bisnow: Give us a bold prediction for the rest of the year.
Azad: I think people will be freaked out in Q1 and Q2. I think people will unclench in Q3 and Q4 because they'll realize the sky is not falling, it didn't fall in.
I think that more product will come on, lending will relax. I think interest rates will drop. I don't even think it's gonna take until the end of Q3. I think we're going to start seeing dropping of interest rates within the next couple months.
Bisnow: What are the major challenges ahead for CRE?
Azad: The institution, nothing's gonna change for them other than the herd is pivoting or stopping at the moment. It's not real money to them. It's just something that they do in between buying their Maseratis.
For the smaller player that's kind of mom-and-pop level, it's a hunker-down-and-wait time. It's going to slow them down. They don't have any choice but to slow because there's too much risk involved when you've got a $5M, $10M project. To the middle player, I'm hoping it's an opportunity. So for all the middle players, go for full gusto.
Bisnow: What is your most controversial CRE opinion and why are you right about it?
Azad: Being a contrarian, if everybody is doing something, then everybody's already doing it. They're making money from it. They're already exhausting it. So how much money are you going to actually make off of it? It's simply economics.
If you go somewhere where there's not a great demand for it, but the resources are there, then you get a better price on it. Think of it as like a piece of cattle on a ranch. The cattle have all moved here, thinking, ‘Oh, this looks like a great area of land. The grass is really delicious over here. Let's eat it all up, eat it all.’ And I am like, ‘That sucker is empty.' I think, ‘I'm gonna take my hay baler, I'm gonna scoop up all that grass, cut it, put it in bales. Wait until they're all done and sit pretty over there.’
And I don't have anybody buying it yet. I'm just sitting here on my butt, you know, with some bales of hay. But when they're done over there, where are they coming? Who now has the leverage?
Be a contrarian. Be smart, but be a contrarian because that's where you can control. That's your leverage. And if you're the little guy, that's your only shot. Get the leverage so that you can then have a foot in the door.
Bisnow: You’ve previously shared that you are an amputee. Are you comfortable sharing more about that?
Azad: I broke my foot about 12 years ago. The surgery trick to correct it was very difficult to do back then. It was too risky. So they said they wanted to wait.
We waited, we did the surgery. Everything went well. There was an incident at the hospital. I was physically harmed in the hospital against my will, yelling and screaming that they didn't have consent to touch me. All the skin was ripped off my feet and my toes and crushed. So I went through 11 surgeries, I lived in the hospital for 3.5 months. For seven months, I was in a wheelchair. I had a PICC line, IV antibiotics 24/7. My teeth turned brown, my hair fell out. I tried to keep that leg.
But I got to the point where I realized that I had PTSD. It was bad. I got to a point where I realized, I'm not going to be a victim. I'm alive. I'm awake, I can go back to work. And I did.
I said to myself, ‘I don't know how much time I have left. You cut that leg off, and you get out there and you empower yourself to do better, to do more to like, stop being a victim’
I didn't want to be a victim. I don't want any other women out there to be a victim.
Bisnow: So, this is the weekend interview. What do you like to do on the weekend?
Azad: I love sailing. I love being on the water. It centers me.
I love live music. I don't care what kind of music it is, I love anything that centers me in the moment. [My friends and I] realize that life is short. And you never know what's going to happen. So take advantage of it and have a great time.
So travel with friends, sailing with friends, concerts with friends. I have a lot to actually be thankful for with this life thing. I forget that sometimes.