GTIS Partners is a leading real estate investment firm in the Americas, headquartered in New York with offices in São Paulo, San Francisco, Los Angeles, Atlanta, Paris and Munich. GTIS was founded in 2005 and is managed by President Tom Shapiro and Senior Managing Directors Thomas Feldstein, Josh Pristaw, João Teixeira, Rob Vahradian and Amy Boyle.
The leadership team is comprised of seasoned real estate professionals with deep expertise in investment, development, asset management, legal and operations across multiple economic cycles. The collective experience of the leadership team allows GTIS to pursue and lead vertically integrated operating businesses in each of its chosen markets in the United States and Brazil. Most recently in 2018, GTIS established a Brazil Renewable Energy infrastructure platform to pursue investment opportunities in i) onshore wind development; ii) solar pv development, and iii) operational renewable energy assets.
GTIS’ dedicated research professionals work hand-in hand with its investment teams to identify macro trends early, including investing in Brazil in 2005, United States residential in 2009 and single-family rental as an emerging asset class in 2010. As a pioneer in its business fields, GTIS ranks among the largest real estate private equity investors in Brazil, with 100
-plus assets across 1.9m sqm, including 14,000 residential units, over 860,000 sqm of office and industrial/logistics and 10,000 hotel keys located in São Paulo and Rio de Janeiro, the most liquid, institutionalised markets in Brazil.
GTIS takes a local approach to real estate investing with on-the-ground teams in six key markets with 84 employees and $4.2bn of gross real estate assets under management. With broad expertise in structuring, design, development and asset management, GTIS professionals oversee projects in residential, office, industrial/logistics and hospitality from concept to completion.
BRAZIL ON THE RISE
Brazil’s economy continues to recover with positive GDP growth and stable below-target inflation rates despite global geopolitical volatility
Businesses have responded to the accelerating economic recovery by hiring in anticipation of continued growth, with over 422,100 new formal jobs added, representing a growth rate of 1.1% over the 12-month period
Brazil’s risk premium (measured by 5-year CDS spreads) has fallen to prerecession levels when its sovereign credit rating was investment grade, reflecting market optimism following substantial reform progress.
Likely approval of pension reform and a sweeping R$1.0trn privatisation programme have attracted significant foreign investment in the energy and other infrastructure sectors.
The ongoing economic recovery is driving a rebound in end-user and investment demand across real estate and infrastructure sectors just as new supply has fallen off.
‘More Brazil, Less Brasilia’
The newly elected President Jair Bolsonaro and Economy Minister Paulo Guedes have delivered on its promise of market-friendly economic reforms. The team has so far executed on and continue to progress on its four economic priorities:
1) Responsible fiscal and monetary policy
2) Reduced government presence in the economy, especially through privatization
3) Greater integration with the global economy
4) Business-friendly reforms
GTIS Assessment: We believe that Brazil remains one of the top investment opportunities globally, with significant opportunities opening up in the real estate, energy and infrastructure sectors following a long period of retrenchment and painful reforms that have made asset values attractive and put the economy on much sounder footing.
In the office and industrial real estate sectors, tenant demand has recovered to pre-crisis levels, but legacies of the crisis and limited private capital competition suggest that very little new supply will be delivered in the near term. GTIS’ bottom-up demographic model suggests long-term housing demand well in excess of production capacity. The model estimates housing demand of 129,000 units annually in São Paulo, compared to a market peak of 40,000 new unit launches. Within hospitality, the broader economic recovery has fueled a significant improvement in operating fundamentals. As of Q2 2019, revenue per available room in Rio and São Paulo increased 45% and 20% year-over-year respectively, according to STR Global.
While global capital has flowed into Brazil’s public markets, private opportunistic real estate capital remains scarce. 2016 represented the only year of material capital raised since 2012, with GTIS Brazil Real Estate Fund III comprising nearly half of the capital. Given the limited availability of private real estate capital, coupled with the imminent need for new highquality real estate supply, Brazil provides an exceptionally compelling investment opportunity for investors who have the local expertise to execute.
INVESTMENT PRINCIPLES AND STRATEGY
Sustainability: A Core GTIS Investment Principle
GTIS is committed to making a long-term positive difference in Brazil and GTIS managed funds have been ranked #1, 2 and 3 for sustainability in Latin America for five years in a row (2015, 2016, 2017, 2018 & 2019).
GTIS Partners continues to outperform its peers and has once again received the top three rankings in South America in the GRESB 2019 Results,” remarked Dan Winters, GRESB Head of the Americas. “With eight consecutive years of benchmarking their ESG performance, GTIS has proven to be an industry leader making outstanding progress with its sustainability programs, and continues to set the bar higher for the sector.”
- Buy vacancy in Rio de Janeiro
- Development in São Paulo
- Development in São Paulo
- Affordable housing development in São Paulo
- Select investments in São Paulo and Rio de Janeiro
GTIS BRAZIL OPERATING MODEL
- Integrated real estate platform: In-house design, construction and development expertise. In-house legal; compliance, tax and financial reporting;
- Flexible capital allocation: Hybrid allocator/operator model designed to focus on the best risk-adjusted opportunities as market conditions change. Diversified strategy seeks to unlock value that ‘pure play’ competitors cannot easily capture;
- Research and creative origination: Proprietary research at the macro, sector and local market levels; and
- São Paulo/NY joint execution: Local expertise and sourcing capabilities, combined with US institutional best practices.
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