Do We Need Timeless Investment Strategies to Unlock Great Architecture Again?

Hi! I’m Austin, Founder of Building Culture. I’m building a holistic real estate development company from the ground up, with a mission to create a more beautiful, resilient, and thriving world through the built environment.

Do We Need Timeless Investment Strategies to Unlock Great Architecture Again?

Two weeks ago, I attended Reconvene in Santa Monica – a real estate private equity “un-conference,” as they describe it.  It was a great experience.  The venues were stunning – like dinner-on-the-beach-stunning – the food and drink were top-notch, but most importantly, the people were really impressive.

Combustible Collisions

The guest list was curated, mainly consisting of developers (GPs) and investors (LPs), but also a smattering of architects, brokers, and other industry professionals.  While everyone there had put together at least one deal, there was a wide range of experience, from people early in their real estate career to people who have been doing it for forty years and have billions in AUM (assets under management).  

For me, it was an amazing opportunity to learn and network. I’ve been running a design + build company for eight years, but I’m still relatively new to the GP and syndication game. Spending a few days with people who are further down the path is one of the best ways to grow. If you want to get better at something, hang out with people who are already doing it.

Reconvene is called an “un-conference” because the formal talks are minimal and optional. Instead, most of the value comes from organic conversations. With over 220 people in attendance, Moses (the host) takes the time to curate the guest list and even arranges small group meals based on questionnaires to foster the right connections. It’s thoughtful — and it works.

Groups like this have a high probability of combustible collisions – actionable relationships that can lead to all kinds of exciting things. 

How Twitter Changed My Business

Here’s the crazy part. This all started on Twitter. Yes, Twitter.  I only created my personal account on Twitter in October 2023, literally one year ago, and stumbled upon what’s known as “ReTwit,” a community of top real estate investors and operators who share insights, deals, and sometimes even raise money on the platform.  It also happens to be the origins of Reconvene.

It’s an incredible network of knowledge and people.

This is where I first came across Moses.  I stumbled upon his account, and his pinned investment philosophy immediately caught my attention: 

 Our strategy is simply to do what smart families have always done:

1. Acquire great assets in supply-constrained markets

2. Leverage them conservatively

3. Steward them well

4. Refinance them opportunistically to return capital tax-efficiently

5. Hold them indefinitely

Simple, but powerful.

Fast Money = Fast Architecture

In today’s world, there’s a rush to chase high IRRs (Internal Rate of Return) and quick exits.  But something about Moses’s approach feels….timeless. It’s not about flipping properties or quick profits – it’s about long-term stewardship.  And that really struck a chord with me. 

Internal Rate of Return (IRR) didn’t rise to prominence as an investment metric until the 1950’s with the rise of corporate finance.  Isn’t that right around the time everything in the built environment started going to hell?  

I’m no academic or historian, so please take this with a grain of salt, but I absolutely think there is a correlation here. Of course, many other factors contributed to the decline of our cities since the 1950’s as well – such as authoritarian zoning practices and government-sanctioned segregation and destruction of inner cities through Urban Renewal.  More on that another time.   

But finance, no doubt, plays a large role.

Form Follows Finance

R. John Anderson, a leader in the New Urbanism movement, often says of architecture and development, “form follows finance”.  I couldn’t agree more. 

Our financial systems and incentives dictate much of what gets built today. I’ll be writing more on this topic in the future, but if you want to dig deeper now, I highly recommend the book Escaping the Housing Trap by Chuck Marohn and Daniel Herriges. It’s an eye-opening look at how financialization has transformed our built environment – much of it government mandated.

You Can’t Build Timeless Architecture Without Timeless Financial Principles

At Building Culture, we’re all about timeless principles – whether it’s in design, construction or investment.  We believe in blending the best of the old with the best of the new.

When I saw Moses’s investment philosophy, it struck me as a timeless truth.  There may be other ways to invest. There may be other ways to make (and lose) money faster. But they’re often much higher risk and extractive. Yet people have been using Moses’s strategy for hundreds of years to build real wealth, not just for themselves, but for society. 

Moses is doing this with value-add multi-family in California.  Why not apply the same thinking to ground-up, mixed-use, walkable neighborhoods here in Oklahoma?

That’s exactly what we are going to do.

Pivoting to a Long-Term Hold Strategy

As many of you know I’ve been raising money for Townsend, a ground-up, mixed-use infill neighborhood. Originally, the plan was to sell everything within five years – a typical time frame in today’s market.  

But a couple of months ago, I went back to our investors with a new idea: let’s pivot to a long-term hold.  We’ll sell the residential units, but keep the commercial spaces long-term.  We meet all of Moses’ requirements for investment: 

1. Quality real estate? You bet. We are developing, designing and building it ourselves, and you all know our product.

2. Supply constrained market? Absolutely – urban infill is tough, difficult to replicate, and inherently constrained.  

3. Steward it Well? We plan to manage it ourselves to curate the right tenants over time, and move our Building Culture offices into one of the spaces so we can participate in the community.

4. Conservative Leverage? That’s what we baked into the pro forma.

5. Refinance opportunistically? Rather than sell, we can capture rent appreciation and pull out equity via refinancing, providing tax-free returns to our investors – in addition to normal cash flow and pass-through depreciation/interest deductions.

6. Hold indefinitely? While nothing is truly forever, downtown Edmond, where our project is located, is only going to improve over time.  We believe in the success of Edmond long-term, are adding to its value with Townsend, and get to be stewards in the community of some of the premier real estate in downtown.

Looking Ahead

This is by no means a thorough analysis of our investment strategy or the financialization of the building industry. I’ll be writing more about all of this in the coming year – so stay tuned!

For now, consider this a teaser.  And if you’re curious to learn more or have thoughts to share, check out some of the links above, or hit reply and I’ll see it in my inbox.

Thanks for reading, and let’s keep building toward a more beautiful, resilient, and thriving world!

Announcement

I'm excited to announce the launch of The Building Culture Podcast website!  We’ve added a Resources section, where I share valuable workshops, organizations, books, articles, and other materials to help you on your own journey in real estate, architecture or construction.  I’ve just begun to curate that page, so be sure to check back regularly as we continue to add more content.

Podcast

I recently got to sit down with Sara Bega, Town Architect for Las Catalinas – possibly the most beautiful town built in the 21st century.  You can listen on Apple, Spotify, or stream from your Desktop.

We cover:

• Creating a car-free, kid-friendly community allows for independent exploration and fosters curiosity and connection with nature.

• A pedestrian-first environment benefits not only children but also adults and families, creating a sense of community and connection.

• Las Catalinas is a successful example of a car-light community, with a mix of houses, flats, hotels, and shops built on a 1200-acre site.

• The town architect's role is to oversee the design and planning of the community, ensuring a balance between privacy, walkability, and optimized views. Creating a sustainable and adaptable community requires prioritizing human experience and connection.

• The legal structure of a town should allow for flexibility and adaptability over time.

• Trust in human intelligence and the ability to solve problems is crucial for the success of a community.

• Creating a sense of place involves considering the local climate, using natural materials, and designing for the long term.

Conclusion

Thanks for reading everyone. Talk to you again in a couple weeks. Hit reply if you want to leave a note!

Austin