Ryan Prince, founder of Realstar Group’s build-to-rent arm UNCLE, sits down with Blackstock Consulting’s Andrew Teacher for the latest episode of BossCast. They discuss the role technology can play within BTR and what the sector can learn from the world of hotels.
A knack for the residential property business clearly runs in the family - Ryan Prince’s father co-founded Realstar Group in the early 1970s to address a shortage of rental stock in the Canadian market. The company now holds $7 billion in assets.
First moving to the UK from Toronto in the late 1990s, Prince brought Realstar with him. His first foray into real estate came in 2002, in the form of doctors’ surgeries. “The problem we got to in surgeries was we just couldn’t buy enough of them,” he says. “They were very, very tough to find. That’s what led to us moving our attention to hotels.”
“You had these huge leisure businesses like Whitbread and Ladbrokes looking to separate, split up and optimise their balance sheets,” Prince explains, describing the fluid state of the market at the time. “And so I saw there would be an opportunity to go buy the real estate from those companies.”
After exiting a 13,000-room hotel portfolio in 2015, Prince drew on the experience to create UNCLE. “It occurred to me that brands and consumer preferences are critical to decision-making and value,” he remarks. “If you look at airlines, car hire or hotels, every one of those sectors has a consumer brand you or I have heard of.
“By contrast, if you look at the rental housing sector, you couldn’t name a single brand.”
Now numbering 4,000 rooms primarily located in Greater London, branding is central to Prince’s vision that “someone will know that UNCLE exists in London, they will want to come and live in our buildings, and ask for an UNCLE that suits their budget, location and requirements.”
But the UK’s BTR sector is still in its early days in comparison to Prince’s native Canada, where Realstar’s portfolio numbers over 30,000 apartments.
Prince points toward a historical lack of an explicit policy focus on BTR as a stumbling block in the UK. He says: “Central government needs to have a desire to create this as an asset class. If you look back at the last three or four governments, the desire is to create a home for somebody to own. There is no time spent on initiatives that are going to create the scale that we need.”
Another big difference between residential and hotels, according to Prince, is that managing hotels is a profitable business.
“The multifamily business as a management business, unless you’re in the tens and hundreds of thousands of units, isn’t a particularly attractive business,” he clarifies. “So until you get to that scale, you need to marry development and operations.”
Upon arriving in the UK, Prince had a brief stint as a tech investor. He’s convinced of the impact that technology can have on BTR, but observes that “the real estate business writ large has been well behind the times compared to other industries investing in technology, and there’s some catch-up going on.”
As he makes clear, however, “ultimately, what your product is and how you feel about it, tech’s not going to fix that for you.”
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