For this Field Note, we wanted to share some thoughts on a question that comes up from time to time — why we continue to focus on relatively small and mid-sized projects rather than pursuing larger, institutional-scale transactions.
In real estate, larger deals often attract the most attention. Bigger assets can appear more stable, may trade more frequently, and tend to draw interest from large funds and public companies. While those transactions have their place, our experience over multiple cycles has been that smaller deals can often produce better risk-adjusted returns, particularly for partnerships that are willing to be patient and hands-on.
One reason is competition. Institutional capital generally needs to deploy large amounts of money at a time, which naturally pushes those buyers toward bigger assets and fully stabilized properties. As a result, pricing for large deals is often very efficient, with many bidders competing for the same opportunities. Smaller projects, especially ground-up developments in suburban markets, tend to attract fewer buyers and require more work, which can allow for a better basis at the start of the investment.
Another factor is flexibility. With smaller projects, we are often able to structure partnerships, financing, and development timing in a way that fits the specific asset rather than trying to make the asset fit a fund’s requirements. This can be particularly valuable during uncertain markets, when the ability to slow down, adjust plans, or hold longer than expected can make a meaningful difference in the final outcome.
We have also found that value creation is often more visible in smaller deals. When a project begins with raw land or an early-stage site, decisions around layout, phasing, leasing strategy, and ancillary income can have a significant impact on performance. In larger, fully stabilized assets, much of that upside has already been realized by the time the property is acquired.
Another advantage of smaller partnerships is alignment. In most of our projects, the investor group, the general partner, and the operating team are all directly tied to the performance of the same asset. There are fewer layers of capital, fewer competing priorities, and more flexibility to make decisions based on what is best for the property over the full hold period.
This does not mean that larger deals cannot perform well, and we continue to evaluate opportunities of all sizes. However, our history has shown that focusing on projects where we can control the land, manage the development, and operate the asset ourselves often provides more ways to create value than competing for fully priced, institutional-quality properties.
As markets change, we expect this advantage to remain. Larger investors will continue to focus on transactions that can absorb significant capital, while we will continue to look for opportunities where careful site selection, development discipline, and active management can produce stronger long-term results.
