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Podcast: Cap rates do not equal yield

Podcast: The Industrial Real Estate Show Brian Burke, the president and CEO of California-based P...

Podcast: The Industrial Real Estate Show

Brian Burke, the president and CEO of California-based Praxis Capital, joins host Chad Griffiths to discuss investment metrics and issues including cap rates, yields, valuations, active vs. passive investing and more.

Time stamps for the various subjects:

1:10 – Cap rates are not a return metric;

7:10 – Why are cap rates so popular?

8:38 – Cap rates vs .unleveraged yields;

12:30 – Cap rates and interest rates;

15:01 – How to value a deal (and how cap rates are used);

21:48 – Actual return metrics (IRR, cash-on-cash, equity multiplier);

30:20 – Looking for deals in today’s market;

35:50 – Active vs. passive real estate investing;

39:44 – Manipulating cap rates;

44:15 – Software for analyzing deals;

47:40 – Forecasting rent growth;

49:23 – A summary of cap rates.

Burke founded Praxis Capital, Inc., a vertically integrated real estate private equity investment firm, in 2001. He is also a member of the Praxis investment committee.

Praxis operates on multiple platforms, currently managing active syndications for the acquisition of single-family, multifamily and opportunistic residential assets in U.S. growth markets.

Over the course of a real estate investment career that began in 1989, the offerings he manages have acquired over 750 properties, including over 3,000 multifamily units, with the assistance of proprietary software that he wrote himself.

Acquired asset classes include single-family homes, self-storage, mixed-use and large apartment complexes in multiple states.

Burke has arranged over $500 million in debt and equity for Praxis acquisitions. Praxis’ current portfolio exceeds $200 million of real estate assets under management.

He is the author of The Hands-Off Investor: An Insider’s Guide to Investing in Passive Real Estate Syndications, and a frequent public speaker at real estate conferences and events nationwide.

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