Investment professionals are often viewed as being driven strictly by opportunities for profit and by market dynamics that are nearly indecipherable to outsiders. Patrick Egeonu’s approach is different.
As executive director of Assurant Investment Management’s real estate group, he is just as passionate as any other real estate investment professional to produce profits. However, his perspective was also shaped by his Nigerian-American family’s immigrant experience while growing up in Los Angeles. For a time, his family received government assistance and lived in what he describes as a run-down apartment building. That experience informs his belief that it is possible to do good while also pursuing profitable investments.
“There’s no substitute for having a comfortable home where your kids are safe and can go to a good school,” Egeonu says. “As I work to optimize investments and returns, I keep that in mind and try to provide families with some of the things that I didn’t have when I was growing up.”
He accomplishes that by building on Assurant’s real estate portfolio, which was established more than twenty years ago. The company’s strategy was to invest in middle-market (properties valued at between $25 million and $100 million), value-added, and opportunistic real estate in secondary markets that offered growth potential. Egeonu and his business partner, Dale Burnett, who is head of acquisitions at Assurant, have further honed the guiding principles to include geographic areas with strong economic and population growth. They also seek limited entitlements, high barriers to entry for new construction, and neighborhoods close to employment centers. Another key part of their strategy involves targeting properties that cater to the needs of middle-class consumers and the small-to-mid-sized businesses that serve them.
“There is much more demand and much less supply for the middle class than you would imagine,” Egeonu points out. “Retiring baby boomers who are downsizing and wage-constrained millennials all need affordable inventory to meet their needs. Part of our investment approach targets an affordability gap that has been in place for many years for these underserved segments of the population.”
Within this part of their strategy, the real estate team focuses on three main asset types: Class-B urban and quasi-urban, garden-style multifamily residential units from the 1980s and 1990s that can be renovated for modest costs, which allows rents to remain affordable; boutique-sized Class-B office buildings within or in close proximity to central business districts that can be revitalized at a cost that supports lower rents than would be necessary for Class-A offices; and last-mile industrial properties developed for both small to mid-sized distributors as well as for larger companies like Amazon and Walmart that need to be close to their customers.
Egeonu and his team’s biggest challenge is finding suitable investment opportunities on an ongoing basis that fit their mandate. In the current environment, attractive properties are quick to draw multiple buyers, so he says it is critically important to stay true to the company’s fundamental guiding principles. “The financial crisis taught me to stay honest during due diligence and to avoid the temptation to make underwriting fit the deals we want,” Egeonu says. “Someone else can swoop in with very aggressive pricing, but we stick with investment discipline, so I don’t lose sleep over any deals that we might have lost.”
Egeonu and his career have been highly influenced by his mentors. One of them was a middle school teacher who saw Egeonu’s potential even when he was falling asleep in class every day because of a lack of challenging material. The instructor recommended him for magnet classes that led to the A Better Chance Program and a full scholarship to the Loomis Chaffee School. “I went from urban Los Angeles to an idyllic wooded campus in Connecticut,” he says. “It set me on a new path and exposed me to a higher caliber of educational experiences.”
Later, after graduating from Amherst College and stints at Lehman Brothers and Thomson Financial, Egeonu applying to business schools when another mentor referred him to the Robert Toigo Foundation’s Fellowship program, which led to his first job in real estate finance and introduced him to Dale Burnett, who is also a Toigo alumnus. It also rescued him from what he admits was “doing a bad job of buying and flipping investment properties in Jersey City, New Jersey.”
Now, as a mentor for others, Egeonu advises mentees to identify the key priorities of their organizations and to find ways to align their work to them. The strategy helped Egeonu achieve success at Silverstein Properties, where he was able to move from his initial position as asset manager to a key role executing the successful $1.6 billion financing of 3 World Trade Center.
“It’s incredibly important to identify how what you do fits the overall mission of the firm,” he says. “Every role is complementary in some way. You have to figure out how.”
When asked if there has been anything surprising about his career, Egeonu says it would be how non-linear his path has been. “I didn’t foresee any of the things I’ve done, but you have to stay open to all the opportunities as they keep evolving,” he says. “It’s been a rollercoaster, but even the difficult times have provided very meaningful experiences. That keeps me optimistic about the future.”