Beyond The Bio: 16 Questions With Castle Lanterra Properties CEO Elie Rieder
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This series profiles men and women in commercial real estate who have profoundly transformed our neighborhoods and reshaped our cities, businesses and lifestyles.
Elie Rieder is passionate about creating housing that matters and does good beyond what the balance sheet says.
Castle Lanterra Properties, which he founded in 1998 and leads as CEO, acquires and improves workforce housing around the U.S., and Rieder said a core element of each project is the environmental and social impact it has.
Rieder, who followed in the footsteps of his father and grandfather into real estate, has invested in all sorts of properties, including residential, office, hospitality, retail and parking. His activities have a special emphasis on value-add acquisitions, and his specialty is workforce housing.
He has been involved in acquiring more than 20,000 multifamily units. New York-based Castle Lanterra has an existing portfolio of 7,000 units, mostly in that sweet spot between high-end and government-sponsored affordable housing.
Beyond his role at CLP, Rieder is an equity partner in what he calls a substantial number of units owned and managed by Fieldstone Properties. In his personal life, the busy father of five said he is dedicated to charitable work with organizations that provide food, shelter and education for underprivileged families locally and abroad.
Bisnow: What is your favorite part of your job?
Rieder: I love acquiring and repositioning a property so that our residents’ lives are substantially improved. Castle Lanterra achieves this by making properties safer, creating more amenities and implementing a better management experience. It’s rewarding to know that you have made a positive impact on peoples lives. We are committed to making sure that we create a safe environment at each of our properties — an environment where parents feel secure about sending their children outside to play and residents are comfortable coming home late at night.
We are also aware of our properties’ impact on the environment. We work to reduce water usage and endeavor to be as energy efficient as we can. We also prioritize the use of recycled materials on many of our renovations.
Another key initiative that we believe dramatically improves the resident experience is implementing social amenities that offer an additional layer of “community” to the properties that we acquire. We offer everything from exercise classes to sports league organizations to different types of childcare, all of which cater to the demographic of each property’s residents. This overall notion of achieving great returns for our investors by bettering the experience of our residents is what motivates our team every day.
Bisnow: What is the worst job you ever had?
Rieder: I’ve never held a salaried job. Starting from a very young age, alongside my father, I was focused on real estate, where I learned every aspect of this business from the ground up.
Bisnow: If you weren’t in commercial real estate, what would you do?
Rieder: I could see myself running a not-for-profit organization because I genuinely enjoy giving back to those in need and I spend a lot of time participating in activities relating to charity or philanthropy.
Bisnow: What deal are you proudest of?
Rieder: While I am proud of all of our investments, one deal that we recently sold stands out the most. The 424-unit apartment community is located on the outskirts of Chicago, and we acquired it in 2014 for $28.5M. By investing millions of dollars in a wide range of improvements — including building a resident lounge and fitness center, installing energy-efficient roofs and renovating 30% of the units — we increased [net operating income] dramatically, and were able to refinance the asset three years later for $40M. Ultimately, we sold it last year for $49.5M, generating an [internal rate of return] of 36%. In this particular submarket of Chicago, the property, which we rebranded to “Midpointe,” was the only institutional-quality apartment community which offered something unique: a suburban lifestyle with a Chicago address at the very edge of the city. I’m proud to say that we were able to completely reposition this property — and more importantly, create a higher standard of living that residents can be proud of.
Bisnow: What deal do you consider to be your biggest failure?
Rieder: I don’t believe in labeling experiences as “failures” — in every setback there is a lesson to be learned that can help you achieve something greater.
Bisnow: What is your biggest pet peeve?
Rieder: I like to quote a philosophic saying that “the essence of knowledge is knowing what you don’t know.” To me, being humble, open-minded and receptive to learn — as well as hearing different views and opinions — is very important. We should never think that we know it all, because we simply don’t.
Additional sayings that we frequently reference in our office and internal meetings are “don’t be right, be smart,” “I’m not afraid of risk, I just want to understand it,” and finally, “the best deal may be no deal.” Essentially, my pet peeve is a lack of critical thinking or intellectual curiosity.
Bisnow: What is your greatest extravagance?
Rieder: Charity. I love to give, and that’s my motivation to work hard.
Bisnow: What motivates you?
Rieder: I am motivated by helping others. Whether it’s with time, capital or networking introductions, I truly believe that there is no greater gift than being able to help others.
Bisnow: What advice do you wish you got when you started in CRE?
Rieder: Quality real estate always goes up in value. The best advice I ever received was from my father: “Do not sell.” I wish I still owned every property I ever sold, but, at the same time, we have to sell to build our balance sheet to buy more. At CLP, there are times when we sell because we want to get out of a market — we actively divested of our Chicago holdings — or because we feel that we’re going to get paid as if we finished our business plan when we’re still halfway through. Of course, we also might sell if we feel we have other places where we want to redeploy our capital, or we want to better balance our portfolio. But, in general, I believe quality real estate will always appreciate.
Bisnow: What is the biggest risk you have ever taken?
Rieder: Some of the biggest risks I’ve taken involved going non-refundable when I knew that there were issues that had to be dealt with at the property. In a few instances, I’ve put up non-refundable deposits when problems were identified — such as title or environmental issues that needed to be addressed. While creating a business plan is part of our underwriting process, there will always be the risk of execution. We’re not afraid to take a calculated risk if we have weighed the different factors and the approach makes sense.
Bisnow: What keeps you up at night?
Rieder: As a fiduciary to our investment partners, we take our role very seriously. I spend a great deal of time thinking about what can be done better to protect our investment partners’ capital as well as how we can mitigate risks and ensure that we have downside protection.
Bisnow: What is your favorite place to visit?
Rieder: I love Jerusalem. That’s my favorite city in the world. I find that it has a beautiful mix of culture, history and diversified religions. And I feel like there’s a story under every stone.
Bisnow: Outside of work, what are you most passionate about?
Rieder: I love spending time with my wife and children — I have five children and a fantastic better half. I’m very passionate about charities with which I’m involved, as well as my own ongoing studying and self-improvement. When I have time, I like to be active; I go to the gym, lift weights, ski and hike.
Bisnow: What CRE trend do you think will have the most impact over the next few years?
Rieder: The amount of technology being created specifically for real estate is staggering. I think that as technology develops and people become more comfortable relying on tech, the concept of leasing an apartment online without ever physically visiting the building will become increasingly popular. Leasing an apartment entirely online is possible now, but to see it happen en masse would be a significant change, and one that will fundamentally transform the way in which property owners and managers market their residences.
Bisnow: What would people be surprised to learn about you?
Rieder: I think people would be surprised to learn how much time and dedication CLP invests into understanding the needs of our residents, our neighbors and other community stakeholders. We are a firm that truly cares about the residents who live at our properties, and I love that the successful execution of our business plans enhances the living conditions for our residents. Before we begin to make renovations at a property, we make a point to talk to residents to see what we can do to actually elevate their lifestyle.
For example, a few years ago, we built a two-story indoor children’s playground at one of our New Jersey properties. For some residents, that sort of amenity would have minimal impact. But at this particular community, more than 50% of residents were families with children, and we were able to cater the amenity plan to fit the needs of our residents. From this targeted-amenities approach to a scholarship program that helps our residents achieve their goals of higher education, we take great pleasure in our ability to fulfill our mission of “doing well by doing good.”
Bisnow: What do you want your legacy to be?
Rieder: I want my legacy to be that I passed on to my children the integrity, morals and ethics that my wife and I received from our parents. We view ourselves as links in a chain and I hope that we are able to instill the values in our children that our parents instilled in us: integrity, philanthropy and sensitivity. At the end of the day, that’s the only thing you take to the grave.