Latest posts by Jimin Won (see all)
- Tokenized Real Estate: Creating New Investing and Financing Channels Through Blockchain - April 30, 2019
- SMART CITIES: TORONTO’S GOOGLE-INFUSED DISTRICT AND LESSONS FROM SONGDO, KOREA - November 24, 2018
- 2018 Summer Internships: Jimin Won, ACRES Capital, LLC. - September 24, 2018
When I came to the Baker Program, I aimed to gain a better understanding of real estate finance to propel my capacity as a developer and entrepreneur. I chose to spend my summer at ACRES Capital due to its multi-asset approach, national coverage, and the leadership’s expertise in real estate valuation and risk assessment as well as asset management functions.
ACRES Capital left an early impression from the start of my journey in the Baker Program. Mark Fogel, CEO of ACRES was the first speaker of our Distinguished Speaker Series (DSS) in the fall of my first semester. During his presentation, Mark introduced me to real estate debt solutions that many developers across the country utilize to fund or re-finance projects. I was initially drawn to the wide range of properties ACRES funded across asset classes. Office buildings, multi-family residentials, hotels, student housing, industrial warehousing, and even senior housing, the variety of deals the company closed reflected a leadership team that was well-versed and highly experienced in commercial real estate. That expertise in real estate was made explicitly clear during my conversation with Mark at the reception afterwards, where I learned more about his journey in CRE and his team’s approach to deals.
Fast-forward to May, I joined ACRES Capital as a summer intern in the deal underwriting team. I worked closely with Jeff Genuino, Chief Credit and Structuring Officer who had several deals for me to contribute to from the very first week. I worked with a team of seasoned real estate experts with years of experience in real estate finance and consulting. Our team’s role was to methodically assess the valuation of a potential asset to analyze the risks and rate of return of a potential loan. A large part of my role was to assist in evaluating contributing factors affecting an asset’s current and future value. Jeff was methodical in how he planned my understanding of valuation. I worked on a total of three deals during my internship along with two others that partially began during my last few weeks at ACRES. With each deal, I was assigned one or two different segments influencing valuation such as cash flow, market climate, environmental risks, and sponsor analysis. ACRES currently reviews over $1 billion in potential transaction volume per month. While only a fraction makes it past the screening process to the underwriting team, it was not unusual to have several deals closing within a short period of time. This was the case during my first month, where I worked simultaneously on two deals.
The first deal was performing due diligence on an early-stage land-acquisition project a short-distance outside New York, where the developer was in the process of purchasing adjacent lots to build a large commercial office building anchored by a well-known hotel chain. The second was a redevelopment project in Manhattan, where a team of developers were acquiring a building with ground-floor retail to transform into a long-stay hotel based on an innovative Airbnb concept. Both projects reflected a variety of risk attributes and uncertainties that needed significant consideration. Working on the latter Manhattan project was especially helpful for me as I observed how ACRES’ leadership not only understood the newest trends in real estate, but also understood which areas required more focus when a project had few comparables to directly observe due to its unique operating position. It required a complex understanding of both the local market and the industry.
ACRES is also experiencing incredible growth as its proven track record of real estate knowledge and lending is catching the attention of large players in the capital market. During my internship, ACRES added $500 million to its balance sheet from two major private investment firms, further increasing its growing lending capacity. The energetic atmosphere of a company experiencing significant growth and momentum was also an exciting aspect of my summer training.
Working with the ACRES team was the highlight of my internship experience. The company has experts with years of local market knowledge across the country who I partnered with when performing due diligence on the two deals I worked on in New York and one in my home city of Los Angeles. The hours I spent in Jeff’s office during my summer asking questions, discussing each deal, and walking through his thought process approaching each potential underwritten asset was invaluable. The leadership of ACRES was extremely generous with their time and I was even invited to the Investment Committee meetings for the presentation of deals to which I had contributed. Observing how members evaluated a project’s potential, value, risks, and how they derived quantifiable mitigating protections was exactly the hands-on learning experience I wanted to gain outside the classroom. My experience at ACRES stretched and challenged the way I approach real estate and uncertainty; it taught me to use financial models and numbers as a guide, but to also dive much deeper beyond the printed figures and understand the systematic thought-process, rationale, and logic behind the assumptions driving them. The open-door environment fostered by Mark and the leaders at ACRES created a welcoming office culture where I could approach any colleague to find answers and receive guidance. Add the great breakfasts we had every Friday morning to the list and the office culture speaks for itself. I am extremely grateful to ACRES Capital for bringing me onto its team for the summer and would like to express special thanks to Mark Fogel, Jeff Genuino, and Jenna Freed who took the chance, invited me in, and invested much of their time in my professional development.