Cracking the Code on Institutional Capital with Jon Siegel

Getting institutional capital is not just about knowing the right people. Jon Siegel says investors need something they can “hang their hat on.”

Jon and his partners at Railfield came into multifamily with institutional lending backgrounds. They started Railfield in 2013 and went straight into institutional capital rather than raising money from friends and family.

Their early access to $50 million from a pension fund looked like a major head start. But after buying their first properties, they discovered that getting the next institutional investor was far from automatic.

Jon explains why a real track record matters. Institutional investors may dig into where returns actually came from. One investor even examined Railfield’s past deals to separate value created through NOI growth from value created through cap rate compression.

He also shares why operators need a clear niche, business plan, or other reason to stand apart from the many other multifamily firms looking for capital.

Key topics and takeaways:

• Why Railfield calls itself a small institutional firm
• How a lending background influenced its conservative approach to leverage
• Why getting $50 million early did not make future capital easy to raise
• What institutional investors may examine in an operator’s track record
• Why operators need a clear hook when approaching capital partners
• Why the first institutional relationship can be the hardest
• Why Jon believes operators need to stay in the market during slower periods

Guest information:

Jon Siegel is a partner at Railfield, a multifamily investment firm based in Bethesda, Maryland. Railfield focuses on workforce housing and has about 4,500 units across roughly 15 or 16 properties.

Jon said Railfield primarily works with institutional and family office capital.

Email: jsiegel@railfieldrealty.com

Website: railfieldrealty.com

LinkedIn: Search for Jon Siegel, spelled S I E G E L

Call to action:

Jon said Railfield is always looking for two things: deals and money. He is interested in meeting people who want to invest capital and people who may have leads on potential deals that fit Railfield.

Listeners can contact Jon by email, find him on LinkedIn, or send a message through the Railfield website.