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What's the Deal | Doug Faron of Shoreham Capital | 1,180 Unit Acquisition of Mason at Van Dorn in Alexandria, VA

What's the Deal | Doug Faron of Shoreham Capital | 1,180 Unit Acquisition of Mason at Van Dorn in Alexandria, VA
Traded Media
by Traded MediaShare

Can you share your journey into the commercial real estate business? How did you get started?

My fascination with real estate began during my freshman year at Brown University, where I co-founded a real estate investment club. With no dedicated real estate program, we engaged industry experts to come speak to the club, which helped further my interest in the field. This initial curiosity evolved as I ventured into investment banking, focusing on mergers and acquisitions and working across a number of industries, including real estate. After beginning my career on the buy-side in corporate private equity, I focused on transitioning to real estate private equity during business school and spent ten years at the CIM Group after graduating. With a solid foundation in real estate investment, I felt I was ready to take the entrepreneurial leap and decided to launch Shoreham Capital, a real estate firm focused on acquiring and developing prime real estate properties across the East Coast and Sun Belt regions of the United States.

What drew you to this property that led you to decide on purchasing it?
The decision to invest in Mason at Van Dorn stemmed from its promising location in Alexandria, Virginia—a region experiencing significant growth, especially in terms of employment. The property itself presented a unique opportunity for value-add through strategic renovations. It wasn't just the building's potential that attracted us but also its position in a thriving market, making it an ideal asset for a substantial enhancement to better serve the community.

How are you balancing the demands of a high stakes real estate career with your personal life?
Balancing the high demands of my career with my personal life is about strategic time management and making early sacrifices. My initial years were all about gaining essential experience, which required long hours and personal sacrifices. As I've progressed, the focus has shifted towards achieving a balance, ensuring I dedicate time to both my professional endeavors and family, which has been crucial in maintaining overall well-being and success.

How did you go about securing financing for this deal?
Securing financing for real estate investments, especially large projects like Mason at Van Dorn, involves a detailed understanding of the market and choosing the right financing partners. For this project, we opted for agency financing through Fannie Mae which provided the most attractive cost of capital allowing for accretive leverage in the acquisition.

What strategies did you implement to increase the value of this property?
Our strategy for increasing the property's value centers around comprehensive renovations and enhancements. This includes upgrading the large clubhouse, renovating the outdoor spaces including the pools, tennis courts, and playgrounds as well as a comprehensive renovation of the units. The unit upgrades include adding modern fixtures and finishes—a straightforward yet effective approach to adding value.

What partnerships or collaborations have been formed in relation to this project and how do they contribute to its success?
Partnerships have been an essential piece of all of our transactions to date and in this case, our collaboration with Bridge Investment Group has been incredibly important and additive to our acquisition. Their involvement has brought not only financial support but also their operational expertise which has been and will be crucial to a successful deal execution. Building strong, reliable partnerships has always been a cornerstone of our strategy, as it enhances our capabilities and ensures a broader base of knowledge and resources.

What is your company planning for the next 12-24 months?
Looking ahead, we're expanding our portfolio with several promising acquisitions. These include multifamily acquisitions and developments, strategic plays in mixed-use, and alternatives as well as expanding our presence in the build-to-rent market. Our goal is to leverage current market conditions to secure and develop properties that offer significant growth potential, enhancing our offerings in both residential and commercial sectors.

What's some advice you would offer to students or young professionals starting their career in commercial real estate investing?
For those just starting out, my advice is to immerse yourself in the industry through networking and continuous learning. The relationships you build and the knowledge you acquire are your most valuable assets. Engage actively with peers and mentors, attend industry events, and stay informed about market trends. Real estate is dynamic, so being well-connected and informed will provide you with a solid foundation for success.

What are the most rewarding experiences you've had in the industry?
One of the most rewarding experiences I’ve had so far is the formation and launch of Shoreham Capital. Launching in 2022 was a challenging environment, but to date, we’ve been able to successfully acquire numerous assets, form lasting partnerships, and place a substantial number of units in contract. Working alongside my partner Nick Zoumas, we have been able to flex our institutional investment experience and development and construction know-how to identify and execute value-add and development opportunities in markets supported by strong fundamentals.

 

Traded Student Ambassador Program

This interview was conducted through Traded’s Ambassador Program in collaboration with Kalea Sanders of University of Miami.

Kalea Sander's LinkedIn

execute value-add and development opportunities in markets supported by strong fundamentals

Published: May 28, 2024

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