HSA Commercial profiles a broker at our firm each month as part of our HSA News & Views blog. In this edition, we talk with Eric Ogden, senior vice president with HSA’s Acquisitions and Development Division. Eric works within the company to identify investment and development opportunities on a national basis.
HSA: How would you characterize the current environment for acquisitions?
Ogden: There has been a crowding of capital in the market for several years. The initial wave of institutional capital, about two years ago, compressed cap rates and eliminated the supply of core assets in premier submarkets like the I-55 corridor. As more institutional capital is continuing to come off of the sidelines, we are now seeing cap rates drop for “core plus” product – multitenant properties with some leasing exposure. It would appear that the risk and quality threshold for these institutional investors is lower than it was two years ago, which makes the investment market a lot more competitive.
HSA: How does HSA compete strategically with a flood of capital in the market?
Ogden: Since we’re investing our own money, we’ve always been considered a more conservative investment group. We have to be careful to not overpay for real estate and to maintain discipline despite a market that encourages buyers to do otherwise. Being more conservative requires us to leverage our market knowledge, network, and skill set as a full-service real estate company to find opportunities that may not be on the radar for other investors.
HSA: Is that true for the company’s recent acquisitions?
Ogden: Absolutely. A partnership between HSA Commercial and Innovative Capital Advisors acquired an industrial building in Madison, Wisconsin two weeks ago that is a perfect example. When the property was first on the market three or four years ago, I could see merit in the building and the location, but I believed that it was dramatically overpriced. When the lender took it back last year and priced the property appropriately, we worked with a local broker who was aware of our initial interest to purchase it. The property itself is anything but a commodity, but we believe that HSA has the skill set to stabilize it and create significant long-term value.
Prior to joining HSA, Ogden was director of multi-family finance at Prairie Realty Advisors. Previously, he served as the vice president of real estate acquisition and development at LaSalle Bank, where he closed more than $300 million in loans over three years. Ogden has also worked as a real estate development specialist with American Family Insurance, and held positions at the Rifkin Group, Allianz Investment Corporation, and Andersen Consulting.