Corporate Overview

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, Phoenix, Dallas, Charlotte, Paris and Munich. GTIS was founded in 2005 and is managed by President Tom Shapiro and Partners Tom Feldstein, Rob Vahradian, João Teixeira, Peter Ciganik, Maristella Diniz, Ed McDowell and Robert McCall.

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. GTIS is active across a wide range of real estate sectors including build to rent, single-family, multifamily housing, office, industrial/logistics and hospitality as well as opportunity zones investments. The firm invests at various points in the capital structure, including credit, common equity and structured equity.

GTIS’ dedicated research professionals work hand-in-hand with its investment teams to identify macro trends early, including investing in Brazil in 2005, US residential in 2009 and single-family rental as an emerging asset class in 2010. In Brazil, GTIS is among the largest real assets private equity firms with holdings including office, residential, logistics, and hospitality investments. Marquee assets developed by GTIS Partners in São Paulo include the Infinity office building and Palácio Tangará, a five-star resort style hotel.

GTIS takes a local approach to real estate investing with on-the- ground teams in 10 key markets with 96 employees and $4.3bn 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.

 

Sector forecasts

Brazil Macro Outlook

Economists’ outlook on Brazil’s growth prospects has improved considerably since the start of the year. At the end of September, a survey of economists polled by Brazil’s central bank (BCB) issued a median 2022 GDP growth projection of 2.7%. Back in January, the same survey’s median growth forecast was just 0.3%, as rising inflation and the fallout from the COVID-19 Omicron variant dimmed expectations for the year ahead. The improving labor market has been a key driver of the enhanced growth estimates. Brazil added over 1.9 million jobs in the first eight months of 2022, while the unemployment rate fell to 8.9%, its lowest level since 2015. Overall market sentiment has also risen, with the Consumer Confidence Index hitting 89.0 in September. While still in ‘pessimistic’ territory (as is any level under 100), the reading was the index’s highest since January 2020.

Inflation, however, remains a significant challenge. In September, the IPCA saw a YoY increase of 7.2%. At the end of August, the same group of economists surveyed on growth produced a median year-end inflation estimate of 7.1%, with a median 2023 estimate of 5.4%. Both figures are well above the BCB’s target rates of 3.5% in 2022 and 3.25% in 2023. The persistent threat of inflation has led the central bank to continue its aggressive monetary tightening. The BCB has arguably been more aggressive in combating inflation than any central bank in the world; as of September, its benchmark Selic rate sits at 13.75%, up from a low of 2.0% in March 2021 when the rate increases began.

Growth has been buoyed by a rise in Brazil’s monthly trade surplus as national exports totaled $90 billion in Q3—almost doubling since the start of 2020. Brazil has benefitted tremendously from the post-pandemic rise in commodity prices and demand for oil and agricultural exports. The surplus has also elevated the currency; by the end of August, the Brazilian real was up 13.5% against the dollar since mid-May 2020.

The presidential election must also continue to be monitored. The leftist former president Luiz Inácio Lula da Silva (“Lula”) was widely expected to defeat the incumbent Jair Bolsonaro in the first round. However, the results were close enough that the election is now heading to a runoff scheduled for October 30th, with Lula maintaining a steady lead in the polls. With a great deal of national investment currently on hold until the election is over, its eventual outcome should determine Brazil’s medium-term economic outlook.

Brazil Real Estate Market Outlook

Brazil’s industrial logistics and residential sectors will continue to be the focus of GTIS’s investment strategy in the country. Brazil is among the fastest-growing e-commerce markets in the world, and will require commensurate investment in logistics infrastructure and real estate. In addition, we expect our commercial office and hotel portfolios to benefit from increasingly favorable market conditions. Brazil’s hotel sector has recovered from the pandemic faster than almost anyone expected, while office vacancy rates in Sao Paulo and Rio de Janeiro have fallen steadily to their lowest levels since 2020. Employees in Brazil have returned to the office in large numbers in Sao Paulo as the city’s relatively small apartments and poorer internet connectivity make working from home less attractive. As such, Brazil’s office market is an exception to the global trend and with lack of new supply vacancy in the main business corridors has dramatically decreased over the last few years.

Investment principles & strategy

SUSTAINABILITY: A CORE GTIS INVESTMENT PRINCIPLE

GTIS is committed to making a long-term positive impact in Brazil and GTIS managed funds have been ranked in the top three for sustainability in Latin America for five years in a row (2016, 2017, 2018, 2019 and 2020).

“We are proud to recognise the 2020 GRESB ‘Sector Leaders’ and ‘Most Improved’ for their clear commitment and meaningful action to improve their ESG performance,”said Paulvan Tongeren, co-founder of GRESB. “Your efforts continue to shape the future of sustainability leadership and play a critical role in driving the transition towards sustainable real assets.”

STRATEGY OVERVIEW

Industrial/Logistics

  • Focus on urban logistics opportunities

Residential

  • Affordable housing development in São Paulo Hospitality
  • High-yield, low-leverage debt/deep value acquisition

Renewable Energy

  • Onshore wind/solar development
  • Operational wind/solar projects

GTIS BRAZIL OPERATING MODEL

  • Integrated real estate platform: In-house design, construction and development and asset management expertise, supported by in-house legal, operation, compliance, finance and 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 the ‘pure play’ competitors cannot easily capture
  • Research and creative origination: Proprietary research at the macro, sector and local market levels
  • São Paulo/NY joint execution: Local expertise and sourcing capabilities, combined with US Institutional best practices

Supporting documents

Click link to download and view these files