A few years ago a work trip took me to Melbourne and Sydney, and I tacked on a solo long weekend down the coast in Lorne. I came back obsessed.

Melbourne is greener and more lush than any American city, and the commercial buildings are genuinely beautiful, better designed and better maintained than anything in a comparable US downtown. The restaurants pull from everywhere on earth, which isn’t unusual for a global city, but what was unique was the harmony of the people. The diversity wasn’t just tolerated, it was embraced, and everyone seemed genuinely proud about it (juxtapose to the inherent racial tensions in literally every US metro).

Then I drove the Great Ocean Road to Lorne, which embarrassed every beach town I’ve ever loved in the US. Waterfalls, wildlife, surf, world-class restaurants, old school ice cream shops, and none of the douchebaggery that comes with your top American beach towns.

I flew home with an obvious question for any real estate entrepreneur: if this place is this good, why isn’t more American capital here?

The answer isn’t that the opportunity is missing. It’s that the playbook is only now arriving.

The playbook

For the last 20 years, some of the best risk-adjusted money in US real estate came from a single, repeatable move.

• Find a boring asset class still owned by mom-and-pops: self-storage, manufactured housing, car washes, RV parks, vet clinics

• Roll up the scattered pieces, professionalize the operations, create synergies, market better, etc.

• Then sell the assembled portfolio to a big institution at a lower cap rate than you paid for the parts.

You made money twice. Once on the operational lift, and again on the cap-rate compression that shows up the moment a large buyer wants scale.

Everyone in the US knows this now. The assets are priced for it, and the easy returns are mostly gone.

Australia is where that game is just starting. Same fragmentation, same mom-and-pop ownership, and, most importantly, the institutional buyers are already lining up to take finished portfolios off your hands. The ending is proven, but the middle is wide open.

Why it works here

Three things make Australia the right place to run this play, and none of them require a spreadsheet to understand.

It’s a safe place American money forgot. Australia is one of only about ten countries in the world rated AAA by all three major agencies, and it went roughly 34 years without a recession. For a decade, US investors chased yield into Europe and riskier emerging markets and skipped the most stable economy in the Pacific. It’s under-owned by American capital, which is why there’s still room to move before prices reflect it.

The country is still growing. While the US and Europe flatten out or shrink, Australia’s population keeps climbing, headed toward about 31.5 million by the mid-2030s, mostly through immigration. More people every year means more demand for the buildings underneath these businesses. You’re investing with the tide, not against it.

There’s a deep-pocketed buyer waiting at the finish line. Australia requires workers to save for retirement, and that rule has built a A$4.4 trillion pension pool, on its way to A$8 trillion. That money has to be put to work at home, and it buys these kinds of stabilized, income-producing portfolios. So when you’ve done the hard aggregation work, there’s a natural, well-funded buyer ready to purchase it. The hardest part of any roll-up, the exit, is already solved.

Put simply: a safe country, a growing one, and a guaranteed buyer at the end.

Where to point it

The play only works if you aim it at the right asset classes: fragmented today, institutional tomorrow. A few are lining up.

Self-storage is still about half-owned by independent operators, and the big exits are already printing. Brookfield and GIC just took National Storage private for roughly A$4 billion. The window to aggregate is open right now.

Land-lease communities, essentially professionally run manufactured-housing neighborhoods for retirees, are moving from a sleepy caravan-park world into a real institutional class. Aveo sold for A$3.85 billion, and GemLife went public at around A$750 million. An aging population does the rest.

Childcare property trades on long, government-backed leases where the tenant covers most costs. A record A$1.44 billion changed hands in 2025, and it’s still mostly private ownership consolidating toward institutions.

Then there’s medical office, the one still earliest in its cycle, and the one I find most interesting. Roughly 92% of it sits outside dedicated fund managers. Owners are capital-constrained and selling piecemeal, often off-market, and buildings are trading below what it would cost to rebuild them. It’s the textbook version of the setup that made fortunes in US storage 15 years ago.

None of this is exotic. It’s the most familiar strategy in American real estate, but pointed at a market that hasn’t been picked over yet. And it’s itching for that fast-growing bucket of US private wealth money.

Tomorrow, we’re breaking down this big-box evolution—and the related mispriced retail real estate opportunities—with Brixton at 3pm ET. Register here.

Growing up a Yankees fan, every break in the game came with the same advertisement jingle: “Gotta go to Mo’s.”

Modell’s Sporting Goods ran ads on MSG (later, YES Network) so relentlessly that by the time I actually walked into one, sometime around age ten, I thought I had arrived at the center of the known universe—it had walls of jerseys, racks of cleats, and a whole aisle of just baseballs. It was, genuinely, heaven.

Modell’s was was part of a generation of big-box retailers that created 90’s retail destinations. Barnes & Noble, where a kid could sit on the floor reading for two hours without bother. Dick’s Sporting Goods, with the batting cages and the putting green. Circuit City, where families went on Saturday afternoons to stand in front of wall-mounted TVs they couldn’t yet afford.

Then, Amazon killed them.

Circuit City was gone by 2009; then Borders in 2011. Pier 1, Toys “R” Us, Bed Bath & Beyond, Sports Authority, Tuesday Morning: the list kept growing for a decade. And the lesson the real estate market took from them was: “big-box retail is a melting ice cube; avoid them as anchor tenants.” Buy small-box strips tenanted by restaurants and salons and urgent cares, i.e., the categories Amazon cannot replicate.

That lesson was half right.

The retailers that died were the weakest operators in categories where e-commerce had the clearest advantage. But the retailers that survived did something the market has not fully re-underwritten—they stopped being stores.

The Big Box Evolution

Kroger

They are really a last-mile fulfillment hub that happens to sell groceries. Seventy percent of online grocery orders fulfill from the store, not a warehouse, with billions invested in back-of-house staging, racking, sortation, and curbside infrastructure.

But the margin story is the real story. Retail media, a concept pioneered by Amazon and Walmart over the past five years (retailers selling ad space across their digital and physical properties to consumer brands), generated approximately $1.5 billion of Kroger’s roughly $5 billion in earnings last year. Private label sales hit a record $282.8 billion nationally in 2025, now 23.5 percent of total grocery volume, redirecting margin from national brands to the retailers themselves.

A Kroger in 2026 is a fulfillment center, an advertising platform, and a private-label brand house operating behind a grocery entrance.

Target

Target fulfills 97 percent of its digital orders from stores—the same buildings where customers push red carts past end caps. Product arrives through the loading dock and, increasingly, never touches a shelf. Store-based fulfillment across major retailers grew 35 percent or more annually from 2020 to 2025.

A retailer cannot close a store that fulfills half its digital volume without dismantling its own logistics network. The switching cost is not a lease penalty. It is the destruction of a supply chain node.

Best Buy

Best Buy is an omni-channel revenue generator. They run Geek Squad installations, Best Buy Health for seniors, in-home tech support, and store-within-a-store partnerships with IKEA for kitchens and laundry.

Walk into a Best Buy in 2026 and the sales floor is one layer of a business that now includes services, healthcare, and logistics. The relocation friction on a box running a Geek Squad bay, an IKEA display, and a healthcare division is categorically different from the relocation friction on the Circuit City it replaced.

The Same-Day Arms Race

Amazon forced the entire retail industry into a same-day delivery arms race, and the only way to compete without Amazon’s distribution network was to turn stores into warehouses.

The buildings now function as logistics infrastructure:

• Proximity to the end consumer,

• Loading dock access,

• Backroom fulfillment capacity

These are the same attributes that made industrial real estate a generational trade over the past decade, and now describe the operating profile of a grocery-anchored strip center.

But the real estate market has not caught up. Anchored strip centers are trading at 7 percent cap rates in markets where apartments trade at 5 percent. The cap rate spread between anchored retail and comparable asset classes is wider than the fundamentals justify, priced on a version of these tenants that no longer exists. The “retail is dead” crowd is measuring foot traffic, while the operators making money are measuring dock throughput.

Blackstone is on the offensive. In February 2025, it paid $4 billion to take ROIC private, 93 grocery-anchored centers on the West Coast at a 34 percent premium to market. The rest of institutional capital is still catching up, and the window to buy anchored retail at current cap rates is narrowing.

Tomorrow, July 24 at 3pm ET, Thesis Driven sits down with Rob Taylor and Grant Brutten of Brixton Capital to break down the evolution of the big-box tenant, the fulfillment infrastructure layer that locks these tenants to their physical locations, and why the most avoided asset class in retail real estate may be the most mispriced. Register here.

The wait time for a new Bombardier Global 8000 is 2029.

And the global billionaire population just hit 3,110, with 89 new people per day entering “UHNWI” status (+$30mm in net investable assets).

Combine those two facts, and you can come to a pretty simple conclusion: there is a fast-growing (and frustrated) waitlist for private jets.

But the second-order effect is less obvious: all those jets need hangars, fuel, terminals, and tarmac… private jet infrastructure is extremely constrained.

These supply-demand dynamics are powering a niche corner of real estate that's rarely discussed, but will be a major play over the next decade as the K-shaped economy grows.

Some relevant news & facts frame up the sector

KKR bought Atlantic Aviation in 2021 for $4.475 billion. They merged it with Ross Aviation, grew the platform to over 100 locations, and are now selling it to Apollo and Singapore’s GIC for roughly $10 billion. That’s approximately a 15x return on equity in five years.

Yes, this sounds more like a tech multiple than a real estate return, and that’s because private aviation real estate sits at a strange and lucrative intersection:

• the physical infrastructure is essential, but

• the supply is permanently constrained, and

• the demand curve is a function of global wealth creation.

There are 3.4 million business aviation operations in North America annually, up 33% from pre-COVID levels. NetJets alone operates 845 jets. The fractional market has grown 75% since 2019. And the industry calls the gap between aircraft growth and facility capacity “the $10 billion hangar problem.”

The good news for investors: entire ecosystem is investable.

Here’s how the investable ecosystem breaks down

Note: for the aspirational jet owner, I hope, if nothing else, this helps with your private jet IQ in cocktail conversations.

FBOs: The anchor asset

A Fixed Base Operator is the private aviation equivalent of an airline terminal: fuel, hangars, VIP lounges, ground handling, maintenance, concierge. Fuel alone is 50-70% of revenue. There are roughly 3,000 FBOs left in the U.S., down from 5,000 in the 1990s, and the top five chains now control 44% of the market. Mature FBOs run 20-30% operating margins.

Signature Aviation, the largest at 200-plus locations, was taken private in 2021 by Blackstone, Global Infrastructure Partners, and Bill Gates’s Cascade Investment for $4.73 billion.

The consolidation thesis is the same one that repriced self-storage and car washes: fragmented, operationally intensive, capital-constrained independents being rolled up by institutional platforms that can extract margin through scale. Except the supply can never grow. You can’t build a new airport.

Private hangars: A $10 billion bottleneck

In plain English, a personal home/garage for your jet (whereas FBOs are more like hotels.. a place to park your jet while you’re in town).

There is a massive need for these as 71% of U.S. general aviation airports maintain waitlists for hangar space. Teterboro, Van Nuys, and Miami Opa-Locka have three-year waits. Most existing hangars were built in the 1970s and ‘80s for smaller aircraft and can’t fit today’s Gulfstream G700s or Global 7500s. New hangars cost $60 to $200 per square foot to build depending on spec, and lease for $4,000 to $7,000 a month for larger jet spaces.

Sky Harbour Group, an aviation infrastructure company publicly traded on the NYSE (SKYH), operates roughly 1 million rentable square feet of hangar space with revenues growing +50% YoY and a development pipeline targeting 50-plus campuses and over 10 million square feet.

Hangar condos: The niche within the niche

High-net-worth pilots and charter operators are increasingly buying individual hangars on deeded or condominium ownership at airports. Pricing ranges from $300,000 for a basic box hangar to $1.5 million at Addison Airport in Dallas at roughly $460 per square foot.

Developer returns on hangar condo projects run 13-16% unlevered IRR. Some hangar locations have appreciated 400% over the past decade.

Fly-in communities: Residential meets runway

There are over 400 residential airparks in the United States where homeowners store aircraft in attached hangars and taxi to the runway from their driveway.

Spruce Creek in Florida is the largest: 1,300 homes, 5,000 residents, 700-plus hangars, and a 4,000-foot runway. Family homes run $400,000 to $2 million. At the high end, Alpine Airpark in Wyoming, 35 miles from Jackson Hole, sells lots for $479,000 to $2.25 million and finished homes for $3 to $5 million on a 5,850-foot runway. Pecan Plantation in Texas sold 174 lots in under three years, with transaction volume up 80% in 2025. Aviation homes sell at 20-30% premiums over comparable non-aviation properties.

MRO facilities: Aviation’s industrial play

Maintenance, Repair, and Overhaul facilities are the large-format industrial side of the ecosystem. The global MRO market is roughly $100 billion and growing at 5% annually. In 2023 alone, $8.5 billion was invested in new MRO facilities globally, with 14 new facilities in North America adding over 7 million square feet. ST Engineering is spending $210 million on an expansion in Pensacola. Construction costs run $120 to $220 per square foot, higher than standard industrial due to cranes, foam suppression systems, and specialty power requirements.

Luxury terminals: The new amenity race within FBOs

The latest wave of FBO investment is pushing the product toward hospitality.

Clay Lacy Aviation is spending over $100 million on a 14-acre, 145,000-square-foot complex at John Wayne Airport in Orange County.

Atlantic Aviation’s new Boca Raton terminal is a $40 million, four-story facility with hotel-inspired lounges.

Flexjet is building six new FBOs including a $36 million Scottsdale facility. SFO is developing a luxury private terminal where entry costs $895 to $5,000 per visit, driven in part by AI-sector wealth.

—

Every corner of this ecosystem shares the same opportunity: the supply of airport land is fixed, the demand for private aviation is accelerating, and the infrastructure was built for a smaller era.

The operators and investors who control the tarmac over the next decade will set the terms for a very lucrative ecosystem.

I’ve always been romantically attached to the idea of being a farmer - working outside all day, no cell phone, living off the land, driving a tractor at 4 miles per hour and calling it “my commute”, etc.

Then I remember that actual farming involves no money, no vacations, no air conditioning, and a 4 AM alarm clock 365 days a year.

But my friend Darin Turner might have found the Goldilocks scenario: paulownia tree farming. Paulownia is a fast-growing (like almost invasive, 20-feet-in-the-first-year fast growing) species of hardwood that is light but strong and used in everything from boats to window frames to violins to surf boards.

Each tree generates roughly $860 in profit over an 8-10 year harvest cycle (vs. oak, maple, etc. that take 40) and regrow multiple times.

And the company Darin (who is the former CIO of Invesco) is building an institutional platform around, World Tree, has 8,000 acres of them planted across 375 farms in five countries.

I’m talking to Darin about it today at 3 PM ET (link here if you want to join live).

If you can’t make it, here’s the skinny

Timber has been one of the best-performing real asset classes for three decades. The NCREIF Timberland Index has delivered annualized returns above 8% with almost no correlation to equities or bonds. On paper, it’s the perfect portfolio diversifier: a physical asset that grows in value literally by growing, that doesn’t care about interest rates or earnings calls or what the Fed chair said on Tuesday.

And almost no private investors own it.

The reason is simple: most trees take forever to grow.

Traditional hardwood rotations for oak, maple, and walnut run 25 to 40 years. A family office that plants red oak today won’t see a harvest until the 2050s.

Meanwhile the institutional timber market is dominated by TIMOs and public REITs like Hancock and Weyerhaeuser that operate at that pace, with investment minimums in the tens of millions. The asset class has been structurally closed to private capital since it started outperforming.

Paulownia is a completely different animal.

The species grows 10 to 20 feet in its first year. It reaches harvestable size in 8 to 12 years. And after you cut it down, the root system regenerates and produces another harvestable tree, repeating for five to seven additional cycles without replanting. One planting produces decades of harvests. The hold period drops from “your grandchildren will thank you” to something that actually fits inside a fund life.

And it’s not a novelty wood. Paulownia is a genuine specialty hardwood, lighter than balsa but stronger than most softwoods, used in furniture, exterior siding, musical instruments, marine applications, and surfboards. It’s been a premium timber species in Japan for centuries.

The reason it hasn’t scaled commercially in the West is that nobody built the genetics program or the supply chain to do it until now.

World Tree has spent the last decade solving that problem.

They’ve developed proprietary genetics across 25 to 30 site-specific varieties, optimized for different climates and soil conditions. Their farms span Central America, the U.S., and Europe. First commercial lumber shipped in December 2025. The company is past the “is this real?” phase and into the “how do we scale this?” phase.

Which is why Darin is stepping in.

He spent nearly two decades at Invesco as CIO of Listed Real Assets - so he doesn’t usually gets excited about a tree unless the tree has a compelling risk-adjusted return profile.

His firm, Signal Line, is building the institutional-grade structuring and capital markets infrastructure to make paulownia timber investable at family office and private wealth scale for the first time. The goal is to take an asset class that has outperformed for 30 years and remove the two barriers that kept private capital out: the hold period and the access point.

The pitch, stripped down:

• an 8 to 12 year hold on a physical asset that literally grows,

• regenerates after harvest,

• produces a specialty product with established global demand,

• has three decades of index returns above 8 percent, and

• has zero correlation to the things keeping your LPs up at night.

And the downside is protected by the dirt and the timber on it. The upside is a function of biology.

I don’t know how many asset classes can make that claim.

Listen in today at 3 PM ET.

Mike Meldman, founder of Discovery Land, figured out the model thirty years ago with projects like Yellowstone Club, Baker’s Bay and Silo Ridge.

• Build a private residential community around a signature amenity, like golf courses or skiing

• Sell the homes

• Retain the club operations

• Collect initiation fees, annual dues, and management fees in perpetuity

Discovery Land now operates 35-plus communities worldwide, sells homes between $3 million and $50 million, charges $300,000 initiations and $40,000 in annual dues, and generates north of $2 billion in annual sales. Tom Brady and Reese Witherspoon are residents. And George Clooney co-founded a tequila brand with Meldman that sold to Diageo for a billion dollars.

Meldman proved that a branded residential community is not a real estate project — it’s a platform made up of real estate + brand + management.

Now a new generation of developers is importing his playbook into markets and price points Discovery Land couldn’t touch. The model is the same but the entry point is different; and for investors, the economics might actually be better.

The models are all a bit different, but generally work like this:

• A developer builds a branded community of 15 to 40 homes around a specific lifestyle: golf, outdoor adventure, desert weekends, ski access

• They sell a portion of the homes to lower their cost basis and recoup development capital

• The remaining homes stay in the portfolio as professionally managed short-term or mid-term rentals, generating cash flow at rates well above conventional residential

• The developer earns management fees on the entire community, both the homes they own and the homes they sold, covering everything from housekeeping and concierge to rental operations and maintenance.

For the homebuyer, the value proposition is equally clean: a beautiful home with resort-grade amenities in a rising market, professionally managed and cash-flowed as a rental when they’re not there, ideally covering the mortgage.

Three groups are executing versions of this right now, and each one takes a slightly different angle.

Teton Outing Club

Cardinal Lands is developing 30 luxury townhomes averaging 2,600 square feet on Ski Hill Road in Driggs, minutes from Grand Targhee and a short drive from Jackson Hole. Homes are priced 70% percent below comparable Jackson Hole properties.

The club is built around outdoor adventure: gear storage, a trip-planning library, recovery spaces, and a tradition of organized group outings punctuated by celebratory dinners.

Birdie Houses

Birdie Houses is building a portfolio of premium vacation rental homes in iconic golf destinations, each outfitted with amenities you’d find at a tour player’s private compound.

The flagship property in Pinehurst has a 6,000-square-foot short-game facility built by Celebrity Greens (the same team that built greens for Jon Rahm and Max Homa), an indoor simulator with Foresight launch monitors and PuttView augmented reality putting, Callaway wedges and Odyssey putters in every room, a sauna, cold plunge, humidor, and outdoor bar.

Polo Villas

Build to Stay — led by Jerry Coleman, the cofounder of Invitation Homes — is applying the institutional BTR playbook to vacation rentals.

Polo Villas is their first project: 18 custom luxury homes on half-acre lots adjacent to the Coachella festival grounds, each with five to seven bedrooms, pools, pickleball courts, putting greens, and outdoor kitchens. Villas rent for $1,450 to $1,650 per night on standard dates, with Coachella and Stagecoach weekends commanding significantly more.

Discovery Land proved it at the $10 million price point. These groups are proving it works at $500,000 to $2 million, in markets where the underlying real estate fundamentals are already accelerating.

When I was a kid in the ‘90s, my grandfather used to tell a story about three beachfront lots in Loveladies on Long Beach Island.

“It was the 1950s, right after a hurricane… a guy at the bar offered him all three lots for $10,000 each… he passed… those lots are worth millions today.”

I remember thinking he squandered the best real estate deal of all time. And then blamed him that we weren’t rich.

We all have those stories: the friend or uncle who almost bought in Montauk in the ‘80s, looked at Park City before the Olympics, Aspen when it was a mining town, yada yada.

The pattern is always the same: a place that was underbuilt, underknown, or had just been through something terrible. A catalyst arrived, and the window closed.

Here are six places where that window is still open.

Driggs, Idaho

The place. A ranch town in Teton Valley on the west side of the Tetons, ten miles from Grand Targhee Resort, which gets 500-plus inches of snow a year.

What makes it great. Fly fishing on the Teton River. Mountain biking. Yellowstone next door. A growing food and brewery scene. Targhee’s powder is consistently ranked among the best in the country.

What’s happening. Grand Targhee Resort is expanding: 50 new cabins, new lift infrastructure, new terrain. The average single-family home in Jackson Hole hit $10.7 million in 2024. Driggs median is $525,000 to $795,000. That’s one-sixth of Jackson. Teton County added 35% more jobs between 2017 and 2023, population up 14% in five years.

Sandpoint, Idaho

The place. A lakefront town on the shores of Lake Pend Oreille in northern Idaho, home to Schweitzer Mountain, the state’s largest ski resort at 2,900 acres.

What makes it great. Lake and mountain in the same town. Schweitzer has a 2,400-foot vertical drop. Downtown punches well above its weight in restaurants and breweries. Year-round recreation from skiing to wakeboarding.

What’s happening. Alterra acquired Schweitzer in 2023 and added it to the Ikon Pass. Every resort that joins Ikon sees a visitation spike. New chairlift already installed. Population up 29% since 2020. Median home around $450,000 to $589,000, correcting from pandemic highs. Sun Valley is $1M-plus.

Taos, New Mexico

The place. A high-desert arts town in the Sangre de Cristo Mountains, 70 miles north of Santa Fe, with a world-class ski area that averages 305 inches of snow.

What makes it great. One of the best art scenes in the American West. UNESCO World Heritage Taos Pueblo. New Mexican food people fly across the country for. Expert ski terrain with $300 million in renovations over the past decade.

What’s happening. A $5.4 million airport terminal is opening this month. JSX already flies direct to Dallas and Denver. The bottleneck in Taos has always been accessibility, not desirability, and that bottleneck is being removed. Median home around $599,000 versus Santa Fe at $750,000 to $900,000. Buyer’s market with 7.6 months of supply.

Gunnison, Colorado

The place. A university town 28 miles south of Crested Butte, sitting at the confluence of the Gunnison River and Blue Mesa Reservoir, Colorado’s largest body of water.

What makes it great. World-class fly fishing, backcountry skiing, mountain biking. Western State gives it year-round energy. Less precious than Crested Butte. More the kind of place where people actually live.

What’s happening. Crested Butte prices are roughly three times Gunnison’s. Condo and townhome prices in Gunnison have surged 73% as buyers shift south. The Driggs-to-Jackson dynamic, playing out in real time, 28 miles apart.

Gulf Shores, Alabama

The place. Thirty-two miles of white-sand Gulf Coast beach between Mobile Bay and the Florida Panhandle, anchored by Gulf Shores and Orange Beach.

What makes it great. The beaches are legitimately beautiful. Gulf State Park covers 6,150 acres. Deep-sea fishing charters leave daily. The seafood is better than most of the Panhandle. One of the few Gulf beaches where you can still buy for under $500,000.

Also home to my favorite bar in the world - Florabama.

What’s happening. Visitor spending hit $4.7 billion. Nearly 8 million visitors a year. A thousand new lodging units added in the last 18 months, another thousand coming. Median home is $458,000 to $515,000 versus 30A at $800,000 to $2 million. Vacation rentals average $43,700 a year.

Mexico Beach, Florida

The place. A small Gulf Coast town in the Florida Panhandle, halfway between Panama City Beach and Apalachicola.

What makes it great. Hurricane Michael leveled it in 2018 as a Category 5. The town has been rebuilt almost entirely from scratch: modern, elevated, storm-resilient homes on a stretch of Panhandle beach that feels like old Florida. No high-rises. No strip malls.

What’s happening. The housing stock is brand new. The prices reflect disaster recovery, not the quality of what’s been built. Median is $350,000 to $525,000 versus 30A at $800,000 to $2 million. That window closes once the last lot develops and the narrative shifts from “recovery” to “destination.” Insurance is a Panhandle-wide headwind, but this construction was built to current code.

I took a meeting last month with a member at Kith Ivy, Ronnie Fieg’s members-only padel and wellness club in the West Village. The initiation fee is $36,000, and then annual dues run another $7,000. The rooftop has three enclosed padel courts designed by Wilson with New York’s first Erewhon outpost on the ground floor. The spa is a partnership with Giorgio Armani, Café Mogador runs the restaurant, and then there’s a Kith retail shop, a gym, cold plunge pools, a hammam, and IV therapy rooms.

It was, objectively, a great place to take a meeting. And that sentence is the entire thesis of this letter.

The private members club market in the United States hit $5.39 billion in 2025, and club applications have increased 42 percent since 2021. New York has added more members clubs in the past three years than in the prior two decades.

But most of these clubs (Zero Bond, Aman, San Vicente, Casa Cipriani) are built primarily around food, beverage, and social programming. And F&B-driven members clubs are a brutal business with thin margins and tough to sustain differentiation. Once the opening buzz dies down, a club that offers dinner, drinks, and a nice room needs to give members a reason to come back three times a week, not three times a year. And most can’t.

Racquet sports solve that problem. And the participation numbers are no longer a niche trend.

• Tennis reached 27.3 million U.S. players in 2025, up 54 percent since 2019

• Pickleball hit 24.3 million, up 171 percent in three years, with the average player age dropping from 41 to 35

• Padel surpassed one million U.S. players in 2026 (up 250 percent since 2022), and more than 70 percent of new sports facilities built in 2024 included padel courts

And that’s just the mainstream layer. Squash, platform tennis, and the esoteric end of the spectrum (court tennis, rackets) round out a category where a single club can offer five or six sports under one roof.

None of this is new, of course.

The DNA of the American private club was athletic first and social second. The New York Athletic Club was founded in 1868. The Racquet and Tennis Club, purpose-built around court tennis and rackets, has occupied its McKim, Mead & White building on Park Avenue since 1918. The University Club, the Union League, the Harvard Club: racquet sports were the center of the club experience for a century.

Somewhere in the mid-twentieth century, the model shifted. The dining room became more important than the court. Soho House, Zero Bond, and the 2010s wave of social clubs were built almost entirely around F&B and curation, with fitness as an afterthought.

The racquet club renaissance is a return to the original model, updated for a generation that wants activity, wellness, and social connection in one membership.

And the economics favor it. Courts are cheap to build relative to the revenue they generate; a padel court runs $75,000 to $150,000, a fraction of a high-end restaurant buildout. The infrastructure drives repeat visits: a member who plays twice a week visits 100 times a year, versus 12 for a member who comes to dinner once a month.

Each visit is an opportunity for F&B, retail, and wellness spend. Courts don’t take up much real estate (three padel courts fit on a rooftop; squash courts stack vertically), which makes the model work in urban footprints where square footage is expensive.

And racquet sports are inherently social. Every game requires at least two people. Padel requires four. Nobody needs a programmed “mixer” when they’re already playing doubles with a potential client three times a week.

Kith Ivy is the most visible expression of the new model. Fieg understood that the padel courts are not the amenity; they’re the anchor. Everything else (the Erewhon tonic bar, the Armani spa, the restaurant, the retail shop) monetizes the foot traffic the courts generate.

• The $36,000 initiation fee is the membership; then

• The F&B, wellness, and retail revenue is the margin.

A new racquet club in South Florida sold its first 100 memberships in weeks with zero marketing spend and nearly 1,000 people on the interest list before opening. Life Time, which operates 115 clubs with 40 more planned, is adding racquet courts to every new location.

The risk, of course, is oversupply. When participation numbers grow this fast and capital follows, every secondary market will get three padel clubs before it needs one. And courts alone are not a moat. Courts plus hospitality-grade food, wellness, and brand might be. The operators who build generic court facilities without the club experience will struggle to justify premium memberships; the ones who understand that the court is the anchor and hospitality is the margin will build something durable.

The Gilded Age clubs understood this. People want a reason to show up. A court gives them one—and everything else follows from that.

Two friends of mine recently raised $20 million for a multifamily development deal. In this market, which—if you’ve tried to raise for ground-up multifamily recently—you know is about as fun as a root canal with no anesthesia.

They didn’t use a placement agent or tap large institutional capital. And they certainly didn’t rely on mass email blasts to a thousand investors.

I asked them what worked, and the answer was so obvious it was almost embarrassing.

They went deeper on relationships they already had.

They went to dinners, remembered kids’ names, texted articles that had nothing to do with the deal, congratulated people on things that weren’t fundraises, showed up at events and didn’t pitch, and followed up when they didn’t need anything.

They did the actual work of building relationships that no one seems to prioritize anymore.

Probably because most GPs I talk to treat capital raising like a top-of-funnel problem…

• Build a bigger list,

• Blast it,

• If someone doesn’t commit in 60 days, mark them as dead and move on.

The entire capital raising process today is optimized for volume, which is a polite way of saying most capital raising strategies have just become email marketing with a higher minimum check size.

Meanwhile, there are probably 200 people sitting in your CRM right now who already know you, already trust you, and already understand your strategy. Half of them said “not right now” on your last deal — which you interpreted as “not interested.” It almost certainly meant “not right now.” People have a lot going on… their kid is applying to college; they’re closing on a house; they just started a new role; etc. Your $5 million capital call was not top of mind that particular Tuesday in March.

The problem is that maintaining 200 relationships at any real depth is a full-time job, and capital raising already sits on the most senior, most time-constrained person at the firm. So the quarterly update goes out, three people reply, and the rest slowly forget you exist. Not because the relationship soured, but because nobody watered it.

This is where AI gets interesting — and I don’t mean using it to write faster cold emails to bigger lists. That’s just spam with better grammar and a LinkedIn thought leader telling you it’s “scale.”

The real unlock is using AI to watch the people you already know and surface moments worth acting on.

Your investors are not just rows in a CRM. They’re people generating signals constantly across every public channel they touch — LinkedIn, Instagram, Facebook, their firm’s website, Google News, SEC filings.

• An investor’s firm just closed a new fund

• Someone you pitched last year just got promoted to head of real assets at a family office

• A contact just posted vacation photos from Nashville, where you happen to have a project under construction

👆 These are the opening lines of real conversations. And they produce outreach that actually deepens a relationship — not “just checking in” or “wanted to circle back,” which are both shorthand for “I have nothing specific to say but my CRM told me to email you.”

The relationship building workflows we’re building with a few groups right now looks like this.

1. You take your existing investor universe — everyone who’s ever taken a call — and build signal monitors across their public channels.

2. AI watches all of it, continuously, and surfaces relevant moments as signals.

3. AI drafts the follow-up — specific, short note tied to that signal, written in the GP’s voice and calibrated to the relationship.

4. The GP reviews it, tweaks it if needed, and hits send.

Thirty seconds instead of thirty minutes, which means it actually happens instead of aging on a to-do list.

The playbook looks more like what a great consumer brand does than what a traditional capital markets team does. The best DTC companies track customer behavior across every touchpoint and reach out at exactly the right moment with exactly the right message.

Investors are consumers too. They have social media accounts and life events and interests that extend well beyond their allocation mandate. The information is all public. Almost nobody in real estate is systematically using it.

The line between thoughtful and creepy is the senior person’s judgment (which is why the human stays in the loop). AI surfaces the signal; then the GP decides whether to act on it. That human filter is what keeps it personal instead of algorithmic, and it’s why this only works when the workflow is built around how a specific person actually operates, not jammed into some off-the-shelf sequence.

My friends who raised that $20 million didn’t use any of this technology. They did it the old-fashioned way — remembering details, checking in on people, showing up. It works because it’s genuine. What we’re building is the infrastructure to do that at scale without losing the part that made it work in the first place.

The biggest opportunity in capital raising right now isn’t finding new investors. It’s going deeper with the ones who already know your name.

I had coffee last month with a marina operator I’ll call “James”. He runs twelve marinas across the Northeast — roughly 4,000 slips, a fuel operation, a handful of dry storage facilities, and a boat service business he bolted on two years ago. Total AUM is somewhere around $180 million.

James doesn’t have a fund and has never raised institutional capital. His investor base is a patchwork of family offices, a few HNW individuals he met through a friend’s friend, and his own balance sheet. He operates every asset himself — dealing with the Army Corps of Engineers when a dock permit stalls, negotiating fuel margins with distributors, fielding a call at 6 AM when a storm rips a dock off its pilings in Fort Lauderdale.

He’s also generating a net yield his investors can’t find anywhere else.

His portfolio averages north of a 9% cash-on-cash return, in an asset class where Blackstone paid $5.65 billion for Safe Harbor Marinas and Bain Capital is rolling up slips on the East Coast at compressed cap rates. James beats them on yield because he

• Stays small,

• Operates with intensity, and

• Knows every slip in his portfolio by name.

He doesn’t need to hit a $5 billion fund target. He needs to find the next off-market marina on the Gulf Coast before a consolidator does.

James is an archetype. And he’s everywhere.

The operator nobody is writing about

There are hundreds of operators like James building portfolios in asset classes that didn’t have names ten years ago — outdoor hospitality, cold storage, small bay industrial, surf parks, branded residential, RV parks, industrial outdoor storage. They run somewhere between $50 million and $300 million in AUM. Small teams, five to twenty people. Operationally obsessive in a way that would be unrecognizable to someone managing a stabilized Class A multifamily portfolio.

What makes them different from the last generation of real estate entrepreneurs is how they got here. James didn’t start by raising a fund and then going looking for marinas. He started by operating one marina and learning the business from the inside. The portfolio grew because he got good at operations, not because he got good at pitching LPs.

Most institutional real estate businesses are built the other way around — the capital comes first, the operating capability gets figured out later.

And it’s the reason James can generate the returns he does. His returns aren’t good despite his small scale… they’re good because of it.

He sources off-market. He operates with a cost structure that a 200-marina platform can’t touch. He makes decisions in hours that a corporate operator routes through three committees over six weeks. The moment you institutionalize the portfolio — add the IR team, the fund admin, the quarterly reporting — you add cost, slow down decision-making, and compress the very returns that made the investment attractive in the first place.

And the operational complexity of his asset class is what protects all of this. Marinas aren’t apartments. You can’t underwrite them on a rent roll and a cap rate. There’s a fuel business, a service business, a slip rental business, a dry storage business, and a retail operation — all running simultaneously on the same waterfront property, all subject to weather, permitting, environmental regulation, and seasonal demand. That complexity keeps the passive capital out. It rewards the people who actually understand the business — and it punishes the ones who don’t.

James also isn’t just buying buildings. He’s built a marina operating company with proprietary vendor relationships, fuel purchasing agreements, dock maintenance protocols, and a reputation on the Gulf Coast that makes every new acquisition easier than the last one. The operating company has value that exists apart from the real estate.

The capital problem

The infrastructure of real estate capital markets was not built for someone like James.

Placement agents won’t touch a $30 million raise — the economics don’t work for them. They need $200 million-plus to justify the effort. The conference circuit is designed for institutional sponsors with glossy pitch decks and five-person IR teams. The LP databases filter by AUM, track record length, and fund size, and James gets screened out of all three.

The capital that would actually be a good fit — family offices, HNW individuals, small RIAs — can’t find him. There’s no directory of marina operators generating 9% cash yields. There’s no placement agent connecting a family office in Dallas with a twelve-marina portfolio in Naples, Florida. These matches happen, when they happen at all, through personal networks and luck.

So you end up with a market that’s broken in both directions. Operators with strong businesses and real yields can’t raise. Investors with the right appetite and time horizon are stuck choosing between institutional funds that are too big and too expensive, or direct deals they stumbled into with no infrastructure around them.

Private wealth and the $50M Operator

Family offices now put somewhere between 45% and 55% of their portfolios into alternatives, up from about 30% a decade ago. They’re making opportunistic bets on real estate while a lot of institutional capital sits on the sidelines. And they’re far more willing to explore asset classes that pension funds won’t look at — because the check sizes are too small, the sectors are too weird, or the operators are too early.

The $50M Operator is, in a lot of ways, exactly what this capital is looking for.

A family office can write a $2 million check into James’s next marina acquisition. That check is meaningful for him and irrelevant for a $500 million fund. Family office capital doesn’t need quarterly liquidity or a J-curve narrative for an investment committee. It can back an operator for a decade and compound alongside the business, which is what James actually needs — not a three-year hold with an IRR bogey.

And the yield spread is enormous. Institutional real estate in 2026 is generating mid-single digits. James is north of 9%, and operators in other niche asset classes are doing similar numbers. That spread exists specifically because these operators haven’t scaled past the point where their operational edge gets diluted by corporate overhead. The premium is the boutique.

A family office that backs five or six of these operators across marinas, outdoor hospitality, cold storage, and small bay industrial has built a portfolio of high-yielding, uncorrelated real estate exposure that no institutional fund in the market can replicate.

I think this is where private wealth real estate investing is heading. Not blind pool funds. Not REITs. Curated exposure to the operators generating real alpha in the most operationally complex corners of the market.

What could go wrong

When you invest with a $50M Operator, you’re betting on a person. If James gets hit by a bus, the portfolio has a problem that a Blackstone-owned platform would not. That key-person risk is real, and institutional investors have spent decades engineering it out of their portfolios for a reason.

There’s also the growth trap. At some point, James needs a real back office — a CFO, a head of IR, a fund administrator. Those hires cost money and add complexity, and they start to erode the characteristics that made the business attractive. The operators who navigate this well will be the ones who professionalize their infrastructure without professionalizing their operations — who build the back office without losing the 6 AM phone call.

And then there’s the problem of actually finding these people. The $50M Operator is, almost by definition, invisible. No PR team. No PERE conference presence. No database listing. You find them through niche media, operator communities, word of mouth, and the kind of ground-level market intelligence that most investors don’t have and aren’t set up to get.

The investable middle

I wrote a few months ago about the K-shaped economy hollowing out the middle of real estate — the $300 hotel room, the Class B office, the aspirational-luxury condo. The middle is dying in those categories because it lost its reason to exist.

But there’s another middle in real estate that’s doing the opposite. The $50M Operator occupies a middle between institutional platforms and individual deal sponsors, and that middle is thriving precisely because it’s hard. The operational complexity, the small scale, the niche asset classes — these aren’t bugs. They’re the reason the returns are there.

For most of these operators, staying between $50 million and $300 million in AUM isn’t a phase. It’s the strategy. The boutique is the alpha. The yield premium disappears the moment you try to scale past the operator’s edge.

The operators are already here, building real businesses in asset classes the rest of the market is still trying to name. The capital is looking for them. The infrastructure to connect the two is what’s missing — and what’s being built right now, one marina at a time.

Four years ago, I launched a real estate investment banking boutique. The thesis was simple: there are hundreds of innovative real estate operating companies building in niche asset classes—data centers, outdoor hospitality, senior living, cold storage—and most of them are too small or too unconventional for the big banks to care about. Someone should help them raise capital.

The business model was the same one every capital raiser runs:

• Get a client;

• Use their deal as bait to get meetings with investors;

• Learn what those investors want;

• Use that knowledge to get the next client;

• Repeat.

The product, really, was a Rolodex—and the only way to build it was through a steady stream of dinners, conferences, and cold emails.

It worked, slowly.

And five years in, I can look back at a series of assumptions I held on day one that turned out to be wrong — or at least incomplete. Each time I updated one of those assumptions, we ended up building something new.

What started as a traditional advisory business has become something I didn’t plan for and am still figuring out: a platform that combines media, data, AI, and live events to connect real estate operators with capital.

I want to walk through what I got wrong, what we built as a result, and where it’s going.

“Capital raising is a relationship business.”

This is the thing everyone says. And it’s true—but it’s an incomplete truth that leads to a bad strategy.

Yes, an investor is more likely to take a call from someone they know and trust. But the traditional version of “relationship-driven capital raising” means a senior person manually working a network of a few hundred contacts, built over decades, maintained through dinners and conferences. The knowledge about what those investors want lives in that person’s head. When they leave, the Rolodex leaves with them.

I spent my first two years doing exactly this: flying to conferences; hosting dinners; and getting introduced to one LP at a time. And it struck me that the bottleneck wasn’t the quality of our deals or the caliber of the operators we worked with. The bottleneck was that I could only build relationships at the speed of one human being’s calendar.

The assumption I should have started with: capital raising is a trust business, and relationships are just one way to build trust. Content is another.

That realization led us to start using Thesis Driven—a media company my partner Brad Hargreaves had already built into one of the most-read real estate publications in the country—as a capital markets tool.

We started writing about the asset classes and themes our operators were building in.

We published deep dives on niche sectors, interviewed operators on camera.

We hosted virtual events where investors could hear directly from founders.

The investors came to us. Not because we pitched them, but because they’d been reading us for months and already trusted the perspective. Media turned out to be the best investor acquisition channel in real estate—and almost nobody is using it that way.

“Data is a back-office function.”

When we started taking investor meetings—dozens, then hundreds—I kept a spreadsheet:

• what asset classes each investor liked…

• check sizes…

• preferred structures…

• geographic focus…

• notes from every call.

It was useful but messy. And I realized pretty quickly that the intelligence we were collecting was more valuable than I’d understood. Every investor conversation was a data point: what’s getting allocated to, what’s out of favor, where the capital is flowing. Individually, each call is just a call. In aggregate, it’s a live map of private real estate capital markets.

So we built a platform to capture and structure all of it. Every investor conversation gets logged. Mandates, preferences, deal history, and relationship maps are all tracked. We now have structured intelligence on thousands of institutional investors, family offices, and RIAs — not scraped from the internet, but gathered from real conversations over years.

What I got wrong was thinking of this as an internal tool. The data layer turned out to be the connective tissue of the entire business—the thing that makes every other piece work better. It powers our advisory engagements, informs our media coverage, and increasingly, it’s a product in its own right for operators who want to understand the investor landscape before they start raising in CapitalStack.

“AI will just make outreach faster.”

When AI tools started getting good enough to draft real prose, the obvious application was email. Build a list, generate personalized outreach, send at scale. And that’s what most people in capital raising are doing with AI right now — producing faster, more efficient spam.

I almost made this mistake.

The instinct is to take the most tedious part of the job (writing 200 investor emails) and automate it. But automating a bad process just produces bad output faster.

The real unlock wasn’t speed; it was matching.

We’ve now brought in a machine learning engineer to build workflows that sit on top of our investor dataset. The system doesn’t just draft emails—it starts upstream.

• Which investors in our universe have a mandate that fits this deal?

• Which ones have done something similar in the last 18 months?

• Who in our network has a warm path to the decision-maker?

• How should the pitch be framed differently for a pension fund allocator versus a family office principal?

By the time a message gets written, the AI has already done the work that used to take a senior person days: prospect research, relationship mapping, pitch calibration.

The senior leader stays in control of the message and the relationship, but the grunt work (the thing that made in-house investor outreach impractical for most operators) disappears.

Done right, AI doesn’t make outreach faster. It makes outreach smarter—and keeps the senior leader in the driver’s seat. Done wrong, it’s just a more efficient way to erode the trust you spent years building. The difference is whether you start with data and judgment or start with a template and a send button.

“You can do all of this from behind a screen.”

This is the one I keep relearning.

Media scales… data compounds… AI workflows collapse manual labor…. but, none of it replaces what happens when you put an operator and an investor in the same room.

So we’re building out a live events program—starting with a Capital Markets Summit this summer—designed to do exactly that. Not a generic industry conference with 2,000 people and a trade show floor, but a curated room where the operators we work with meet the investors we’ve identified as genuine fits, with enough shared context that the conversations skip the preamble and get to substance.

The events are the part of the business that doesn’t scale. But they’re where trust gets built in a way that no email, article, or dataset can replicate. And they’re the reason the rest of the stack exists — everything else is designed to make that room as productive as possible.

The stack

When I zoom out, what we’ve built is four layers that feed each other:

Media creates the top of the funnel—operators and investors find us through the writing, the events, and the research. It builds trust at scale in a way that cold outreach never will.

Data captures the intelligence from every conversation and structures it into a living map of who’s investing in what, at what size, and through what structures.

AI workflows sit on top of the data and collapse the manual work of investor discovery, matching, and outreach.

Live events bring it all together in a room, with context, where real relationships start.

Each layer makes the others more valuable.

• The media drives the conversations that feed the data →

• The data powers the AI workflows →

• The AI workflows make the events more targeted →

• The events generate the relationships that become the next round of intelligence.

I certainly didn’t plan this. Five years ago, I thought I was building an advisory business with a Rolodex.

What we’re actually building is an ecosystem designed to connect the operators innovating across the built world with the capital to do it—using tools that didn’t exist when we started.

What’s next

We’re still early. The AI workflows are in pilot; the events program is just getting started; and the data platform is good but not where it needs to be. I share all of this not because we’ve figured it out, but because I think the model is right—and I want to build it in the open.

If you’re an operator raising capital in a niche or innovative corner of real estate, or an investor trying to find them, this is what we’re working on.

We’re grateful to everyone who’s been part of the journey so far—the operators who trusted us early, the investors who took our calls, and the readers who’ve been following along. You’ve shaped every part of this more than you know.

More to come,

I just got back from a surf trip to Nicaragua. The trip starts the way most of these trips start: landing somewhere that doesn’t feel like a vacation destination (in this case, Managua Airport); navigating what feels like an illegal rental car experience; and driving through farms where dogs and cows wander onto the highway. I sat stalled for thirty minutes behind a funeral, a casket in the bed of a pickup truck, with a village walking behind it.

By the time the coast appears, the airport feels like another country. There are no resorts, just beaches and cliffs, locals surfing the same breaks they’ve surfed for generations, beachfront bars with dollar beers, and bonfires at night. Each morning I took a boat in the dark to a break nobody’s named on a map, with a few people nobody knew the day before, and surfed for five hours. Came back, ate lunch, surfed again. In bed by 8 PM with a tuna burger, four Toña beers, and the deep, animal exhaustion of a body that did something all day.

The next morning, it happens again.

These trips - whether hunting, fishing, surfing, backcountry skiing - share a set of ingredients that no luxury hotel can replicate:

• Shared physical pursuit that’s adventurous and sometimes (slightly) dangerous,

• Remote location that takes real effort to reach,

• Forced disconnection by geography rather than virtue,

• Immersion in a local economy that is set in nature, and

• A small, self-selected group of people who become close (because the format forces it).

They also share something else. They’re almost impossible to find online. The best spots have minimal internet presence with sparse lodging and a local service infrastructure - where nothing is branded. Most of them get booked through a friend who heard about them from someone they met on a previous trip.

They cost a fraction of what most “luxury” travel costs. And the wealthier my friends get, the more they prefer them to anything a Four Seasons could offer.

The Missing Brand

A few operators have tried to institutionalize this.

• Eleven Experience, founded by former Blackstone real estate executive Chad Pike, runs roughly a dozen properties globally focused on heli-skiing, surfing, fishing, and other adventure pursuits, with week-long programs north of $10K per night

• Venator is positioning itself as a high-end branded experience for affluent hunters

• Explora pioneered the luxury adventure lodge model in Patagonia more than two decades ago

• Singita built one of the most respected luxury brands in the world by mastering the African safari

Each is a niche within a niche, and the aggregate market remains fragmented. The dominant adventure travel brand, the “Aman” or “Six Senses” of extreme outdoor experiences, doesn’t exist.

It should, in theory.

The adventure travel industry is worth over $700 billion globally. HNW and UHNW populations are growing faster than at any point in modern history. And the most thoughtful wealthy travelers are quietly bored of the conventional luxury product; the six-star resort has become a commodity. The Maldives overwater bungalow is fungible across thirty different brands. A truly memorable experience requires something more than a butler and a tasting menu.

The demand is there, and so is the capital. What’s missing is the brand.

What the Right Brand Might Look Like

A small portfolio of owned or partner properties in the world’s best spots for specific sports:

• Experiences built around the experience infrastructure: surf breaks in Indonesia, Nicaragua, and the Mentawais; heli-ski terrain in British Columbia, Alaska, and Japan; fishing in Argentina, Iceland, and Kamchatka

• A guide network hired locally and paid well, because the people who make these trips great are local operators, not corporate transplants

• A community model rather than a hotel model, built around repeat guests and a shared culture of seriousness about the sport

• Lodging that’s elevated but not sterile: a beautifully built hunting lodge or surf camp, not a Four Seasons dropped onto a remote coastline

• A digital experience that’s intentionally minimal, because the value of the brand is what happens once the phone goes away.

The economics could work: ultra-low-volume, high-margin, deeply differentiated. The brand becomes a status object… not because it’s expensive but because it’s hard to access and the experience is genuine.

The Counterargument

But there’s a real argument that this whole thesis is wrong.

The thing that makes these trips great is precisely the absence of brand: the lack of polish, the local guide who isn’t on a corporate org chart, the dollar beer at the unmarked bar, the fact that nobody is monetizing the experience beyond a fair price for honest labor. The moment a luxury brand wraps itself around all of this, something essential gets lost. The community of serious surfers gets replaced by people who heard the brand was cool, the local guides get squeezed out, and the bonfire becomes a “fireside experience” for Instagram.

Maybe these trips are great precisely because they refuse to scale. The scarcity, the cheapness, and the lack of monetization are core the amenity. They keep the people who don’t really want to be there from showing up and preserve the culture that makes the trip worth taking.

If someone does build the great adventure travel brand, the hardest part won’t be raising capital or finding properties. It will be designing a business that grows just enough to sustain itself, and then refuses to grow any more.

That’s probably not a venture-backable business. But it might be the only version of this category worth building.

Elon Musk wants to put a million data centers in space.

Three months ago, SpaceX filed with the FCC for permission to launch up to one million satellites into orbit. Not for internet access (Starlink handles that)—for computing. These are solar-powered orbital data centers that process AI workloads in space, where energy is unlimited and cooling is free.

Around the same time, Musk proposed merging SpaceX with xAI in a deal valuing the combined entity at roughly $1.25 trillion. Then he outlined plans to build a a factory on the Moon to manufacture AI satellites and launch them into orbit using an electromagnetic catapult, leveraging the Moon’s one-sixth gravity and zero atmosphere to fling hardware into space at a fraction of the cost of a rocket.

He calls the vision a “sentient sun.”

I read all of this and realized I didn’t actually understand data centers well enough to know whether it was genius or insane. So I went down the rabbit hole.

What a data center actually is

Every text you send, show you stream, and question you ask Claude happens inside a building somewhere. A data center is essentially a warehouse full of servers that store, process, and transmit data. It’s to the internet what a power plant is to your light switch.

There are more than 10,000 data centers in the United States, ranging from edge facilities the size of a shipping container to hyperscale campuses covering millions of square feet at $1B+ per build. The tenants: Microsoft, Google, Amazon, Meta, Apple, Oracle, plus enterprise customers like banks, hospitals, and AI startups that lease smaller blocks from colocation providers.

The real estate model

At their core, data centers are a real estate business. Developers acquire land, build a facility, and lease to tenants on 10-to-20 year triple-net contracts. The economics look more like industrial net lease than office or retail.

The critical variable is power, not necessarily location. A hyperscale facility needs 100 to 300 MW, enough to run a small city. Securing that power from the local utility, often years in advance, is the single most important step. This is why data centers cluster in Northern Virginia (the data center capital of the world), Dallas, Phoenix, and Chicago, and increasingly in smaller markets where cheap power remains available.

The cocktail party insight: training vs. inference

AI models need to be trained, feeding trillions of data points into GPU clusters in a massively energy-intensive process. That’s what the current buildout is primarily serving.

Then there’s inference—every time you or I actually use the model. Every AI response, image generated, and voice assistant answer uses less power per query, but the volume is astronomical and growing exponentially.

Training is building the factory, and inference is running it 24/7. Some believe advances in model efficiency and chip design will dramatically reduce inference energy costs over time—which would reshape the infrastructure buildout. Others argue the sheer volume of queries will outpace any efficiency gains. Either way, the long-term investment thesis is focused on inference because that’s where the recurring, always-on demand lives.

How to invest

Four access points:

• Public REITs: Equinix and Digital Realty are the dominant publicly traded data center REITs. Equinix operates 260+ facilities across 70+ metros globally. The challenge: they’ve already priced in a lot of the AI tailwind.

• Private infrastructure funds: Brookfield, KKR, and Blackstone have raised massive funds to build and acquire data centers. Institutional scale, long time horizons, large minimums.

• Niche operators: This is where it gets interesting for the Buy Box audience. Companies like Karis — featured at our recent Niche Industrial Pitch Night — acquire powered land and data center sites with 500+ MW of committed capacity across 2,800 entitled acres. The play: source the land and the power before the hyperscalers arrive.

• Adjacencies: Power generation (especially renewables), cooling technology, fiber networks, and the construction firms building these facilities.

Why does Musk want to put data centers in orbit? Two words: power and cooling.

On Earth, data centers are hitting a hard wall; they consume more electricity than many countries, utilities can’t keep up with demand, and new power generation takes a decade to permit and build. Water for cooling is increasingly scarce. Every new hyperscale facility is a fight with local utilities, regulators, and communities.

In space, the sun never stops shining, solar panels generate energy 24 hours a day with no weather interruptions and the vacuum of space provides natural cooling without water or chillers.

Is it feasible? SpaceX itself warned investors last week that the plan “may never become commercially viable.” The technical hurdles — latency, maintenance, data transmission, and the physics of putting a million objects in orbit — are enormous.

But here’s what I take away as an investor: even if orbital data centers are a decade away or never arrive, the fact that the most ambitious company on the planet is trying to solve this problem from space tells you everything about how severe the terrestrial constraints have become.

I get 10+ emails a week from college students asking for an internship. They all start with a paragraph about how much they admire our company (a company they clearly know nothing about, see above), followed by a PDF resume with a polite request to “learn from the best.”

Every one was written by ChatGPT (I can tell because they all use “moreover”)

As far as I can tell, the goal is to get an internship that pads a resume that gets them a soul-sucking real estate IB analyst seat that they’ll leave in two years. It’s the most expensive, least efficient path to a real estate career I can imagine. And I know, because I basically did a version of it.

Here’s how I got into real estate.

I was dating someone in college whose dad was a developer. I watched him build things and get paid a lot of money for it. That was the spark.

So what did I do with that spark? Absolutely nothing strategic.

I didn’t study real estate or learn to model. I didn’t read a zoning code. I basically just told people “I want to work in real estate” and waited for nepotism to run its course.

My friend’s dad got me a summer internship in brokerage and I got a full-time job off the back of it. I hated it. So I went to law school. I hated that too. Then I finally realized what I should have figured out on day one: I just needed to start putting small deals together myself.

It took me seven years and about $200k in law school debt to arrive at a conclusion I could have reached at 20 with a laptop and some initiative.

If I were 20 years old today—with access to Claude, the internet, and social media—here’s what I’d do instead of blasting cold emails or relying on nepotism.

Step 1: Build a curriculum with AI

Open Claude and design an independent study covering four things:

1. which real estate asset classes are most likely to be impacted by AI over the next decade;

2. the core development skills (financial modeling, zoning analysis, lease structuring, construction budgeting) and how to learn each one using AI-enabled tools;

3. how real estate capital markets actually work—who the LPs are, how funds are structured, how deals get financed; and

4. hands-on case studies where I underwrite real local projects, build business plans, and pressure-test assumptions.

I wouldn’t wait for a professor to assign this. I’d build it myself, then walk it into the office of the most entrepreneurial professor in my business school and say: “I built this. Will you sponsor it as an independent study and help me find a local developer to apprentice with?”

Step 2: Find a 4-plex

While doing the independent study, I’d find a small multifamily property… probably a 4-plex, a duplex, something achievable… and underwrite it. Then run the model, walk the property, talk to the city about zoning, get a broker’s opinion of value, and build a real business plan—not a classroom exercise.

The goal wouldn’t be to “get an A”… but actually do the deal.

Step 3: Document everything on social media

From day one, I’d post about what I’m learning… not necessarily polished thought leadership… just honest, raw documentation of a 20-year-old trying to figure out real estate in real time. Every week I’d share what I read, modeled, got wrong and what surprised me.

This would do two things.

First, it would build an audience of people who are rooting for me—from other students to real estate executives (I’d watch this all day long) to investors who find my curiosity and transparency compelling.

Second, it would create a founder-led brand before I’d even done my first deal. By the time I’m ready to buy that 4-plex, people already know me.

Step 4: Crowdfund the 4-plex

(This is the part that would have been impossible in 2007 and is entirely possible in 2026) I’d have spent months building an audience; documenting my learning publicly; and have built a real business plan on a real property. Now I would go to that audience and raise the few hundred thousand dollars to close the deal.

Step 5: Decide what’s next

By the end of 24 months, I’d have something that almost no 22-year-old in real estate has: a real deal, a real track record (even if it’s small), a public body of work that demonstrates how I think, and an audience that’s been following my journey from the beginning.

I could join an existing platform with credibility, or keep doing small deals and build my own portfolio.

Personally, I’d probably go try to take down a mobile home park.

There’s a simple test for whether a real estate investment will make you money: try describing it at a dinner party. If people’s eyes glaze over, you’re probably onto something. If they lean in and ask follow-up questions, you’re probably overpaying.

If I were building a real estate portfolio from scratch today, I’d have one goal: maximum risk-adjusted return with minimum downside. The result would be the most boring portfolio you’ve ever seen. Not a single trophy tower, luxury condo, or boutique hotel—just five unglamorous asset classes that everybody should own.

Here’s the ranking, from 5 to 1.

#5: Express Car Washes

Nobody has ever walked into a cocktail party and said “let me tell you about my car wash portfolio,” which is why the economics are so good.

Express car washes run on a subscription model—$25–$40/month for unlimited washes—creating recurring revenue that looks more like SaaS than real estate. Labor is minimal, throughput is high (150+ cars per hour), and gross margins regularly exceed 80%.

Private equity has been consolidating this sector aggressively (Mister Car Wash, Driven Brands, Whistle Express), while the fragmented independent landscape is enormous.

Best markets are Sun Belt suburbs with high car ownership and weather that doesn’t shut you down five months a year.

#4: RV Parks & Campgrounds

The budget end of outdoor hospitality (not glamping) has the economics of self-storage with the demand tailwinds of the experiential economy, and almost nobody is underwriting it.

There are roughly 27,000 campgrounds in the U.S., and the vast majority are family-owned and operationally unsophisticated. That’s exactly what self-storage looked like before Public Storage and Extra Space rolled up the market.

You own the land, tenants bring their own assets, capex is minimal, and occupancy in well-located parks runs 85–95%. Mom-and-pop parks trade at 7-9 caps and can be repositioned to 5-6 caps through professional management.

Outdoor recreation demand is structural, supply is constrained (try permitting a new RV park near a national park), and the consolidation runway is massive.

#3: Manufactured Housing Communities

Say “trailer park” among your friends and watch the room recoil. Say “manufactured housing community” to an institutional investor and watch them write a check.

That disconnect = opportunity.

You own the land, residents own their homes. Capex for the landlord is nearly zero. Residents pay $300-$700/month in lot rent and almost never leave because relocating a manufactured home costs $5,000 to $10,000.

Turnover is under 5% annually, compared to 50%+ in conventional apartments.

Manufactured housing is the largest source of unsubsidized affordable housing in America, serving a growing demographic that has nowhere else to go. And supply is permanently constrained: most municipalities have made it effectively impossible to permit a new community.

Sam Zell figured this out decades ago. The private market is still catching up.

#2: Small-Bay Industrial / Flex

This is the asset class I’m most excited about right now.

Small-bay industrial is the 1,500-5,000 square foot flex/warehouse unit leased to contractors, tradespeople, and small businesses: The HVAC company that needs a bay for trucks and parts, or the electrician who needs a shop with a roll-up door.

These tenants are the backbone of every local economy, and nobody is building for them.

New industrial development has overwhelmingly focused on big-box logistics: 200,000+ SF distribution centers. Small-bay has been ignored, which means supply is frozen while demand grows.

Rents are climbing 8-12% annually with virtually no new competition. Vacancy in well-located facilities is often below 3%. And the operational complexity is a real moat: you’re managing 30-50 tenants instead of one, which keeps institutional capital out and prices low for operators who can handle it.

#1: Self-Storage

The king of boring.

Self-storage has quietly outperformed every major real estate asset class over the past 25 years, and the opportunity is still enormous.

Stabilized facilities run at 90%+ occupancy with 70-80% operating margins, minimal capex, and recession-resistant demand. Customers stay an average of 14 months despite intending to stay for three: once your stuff is in a unit, inertia takes over.

There are roughly 60,000 facilities in the U.S. and the top six operators control only about 20% of the market. The remaining 80% is independently owned, often by families running a facility without a website, dynamic pricing, or professional management.

This is the single largest consolidation opportunity in commercial real estate. The operators we work with are proving that niche positioning within self-storage generates outsized returns. Many deliver a +30% revenue increase in year one by simply professionalizing operations that hadn’t been touched in decades.

Self-storage is the best boring real estate investment and may also be the best risk-adjusted investment in all of real estate.

So if you’re looking at this list and thinking “none of these are exciting,” that’s the point.

My friend Nadine Choe—who writes brilliantly about luxury hospitality in her newsletter The Stanza—said recently: 'Aspirational luxury will be the hardest hit segment in the cycle ahead.'

She wasn’t talking about Aman. Or Motel 6.

She was talking about the middle—the hotels, restaurants, and experiences that are too expensive for the masses and not exclusive enough for the people who don’t care about price. The $300-a-night hotel room at The W or a Thompson hotel. The $35 entrée at the "elevated" restaurant with Edison bulbs. These are in the kill zone.

The more I sat with it, the more I realized she wasn’t just describing hospitality. She was describing a structural shift that’s reshaping the entire built world.

The K-shaped economy (which we’ve written about before in the context of land, lifestyle towns, and who’s buying what) isn’t just an income distribution chart anymore… it’s an investment framework. And the framework says this: the middle is hollowing out across every real estate asset class. If you’re building, buying, or operating anything that targets the aspirational middle, you’re standing on the thinnest ice in the market.

Let me walk through what this looks like sector by sector.

Hospitality: The luxury end is booming. Aman can’t build resorts fast enough. Billionaires are paying Jeff Klein $1M a year for membership to San Vicente. At the other end, budget-flagged hotels—your Tru by Hiltons, your extended stays—are posting strong occupancy because they serve a need, not an aspiration. In between? The upper-midscale and “lifestyle” segments are the ones sweating. RevPAR growth is stalling. New supply is getting harder to finance. Soho House, which built its entire brand in the aspirational middle, is fighting for survival.

Residential: Build-to-rent communities targeting the broad middle class—workforce housing, suburban rentals, affordable senior living — are seeing record institutional capital inflows because the demand is structural and enormous. Ultra-luxury residential in supply-constrained markets (Aspen, Nantucket, Jackson Hole) is trading at record prices because the buyer pool is expanding faster than anyone expected. But the aspirational middle—the $600K-$900K new construction single-family home in a mid-tier suburb—is where builders are getting crushed. Rates have priced out the move-up buyer. The product sits.

Retail: Dollar General opens 1,000+ stores a year. Hermès makes you spend $10,000 on scarves and jewelry just to get a 'leather appointment' (which is just a chance to be offered a handbag). Both are thriving. The retailers dying? The mid-tier department stores, like J. Crew and Pottery Barn, who sell “affordable luxury” and rely on a consumer who is stretching to afford something slightly above their station. That consumer is gone—squeezed by inflation, debt, and a labor market that rewards the top and automates the middle.

Office: Trophy towers in top CBDs are leasing. Companies want to bring people back, and they’re willing to pay for the best space to do it. At the other end, flex and coworking operators serving small businesses and freelancers are growing. Class B and C office—the “good enough” middle—is where vacancy rates are catastrophic and conversions (oftentimes to industrial, which no one would have believed 15 years ago) are the only viable path.

F&B: The $12 lunch and the $500 tasting menu are both working. The $45 entrée at the “elevated” restaurant with the reclaimed wood and the Edison bulbs? That’s the concept closing every month in every city I visit.

The pattern is the same everywhere:

• The top is thriving because the ultra-wealthy are wealthier than ever and price-insensitive.

• The bottom is thriving because necessity-driven demand doesn’t disappear.

• The middle is collapsing because the consumer it was built for—the aspirational upper-middle class that stretched for nice things—is being economically squeezed out of existence.

For real estate investors and operators, the implication is uncomfortable but clear: you need to pick a side.

If you’re building for the masses, build for the masses… efficiency; cost per unit; and scale all matter. Don’t add the rooftop pool and the concierge package to a workforce housing project and call it “attainable luxury.” Just build good housing that people can afford.

If you’re building for the 1%, build for the 1%… create scarcity, experience and brand… these are the skills that will matter in these categories. The Harlan Estate model—tiny production, extreme quality, generational time horizon—works at the top because it refuses to dilute.

Nadine was spot on about hospitality. But the observation applies to every corner of the built world. The K-shaped economy isn’t a temporary dislocation but a new structure… and a framework for investing. And the built environment is going to conform to it whether we like it or not.

Build for the masses or build for the 1%. The $300 hotel room is a warning, not a strategy.

In the fall of 2007—about three weeks into my first grown-up job in New York City real estate—I decided I was done. I wanted to become a “wine farmer” in California.

Three weeks. I hadn’t even figured out the printer.

To understand this decision, you need to understand who I was at 22. I had a new million-dollar business idea every week and zero working knowledge of any of them.

• A burger “dealer” concept (upscale burgers, drug-kingpin branding);

• A man cave design firm;

• A running app for mapping public restrooms on your route;

I was basically a walking ADHD startup incubator sitting in a Midtown cubicle with a Jos. A. Bank suit and no actual skills.

But the vineyard idea felt different. I could see myself in it… driving around Napa in a pickup truck, inspecting grapes, talking about “terroir”, drinking lots of great wine and knowing how to talk about it, and calling it work.

So I bought The House of Mondavi, read it cover to cover, and networked my way to the dean of UC Davis—the best oenology and viticulture program in the country. He was generous and kind and opened every door.

I remember walking down Park Avenue in my Brooks Brothers blue button-down, calling my dad to tell him I was leaving New York and moving to California to study winemaking.

He paused. And then destroyed my dreams in forty-five seconds.

The gist: I had absolutely no idea what this career path looked like… “go make a lot of money doing something else, and then go buy a vineyard.”

Always ruining everything with his good advice…

I’m not there yet. But I was back in Napa last week, and the pull hit me all over again.

Walking into Yountville every morning for coffee felt like walking through a movie set:

• Fifty degrees, sun pouring in, mist rising off the valley floor

• Hot air balloons getting filled up behind the post office

• A $25 cappuccino that feels worth it

• The best English muffin in America from Mini Model Bakery (I’m calling a NYC English muffin trend for Fall of ‘26)

Then I visited Promontory—one of Bill Harlan’s estates on Pritchard Hill—and learned the story of his 200-year business plan.

In 1984, Harlan, a real estate developer and professional poker player, bought 40 acres of forested hillside in Oakville that had never grown a single grape. His goal: build an American first growth to rival Château Lafite. Since then he’s built:

• Harlan Estate - $1,000+ a bottle, ~1,800 cases/year, a waitlist to buy

• BOND - five wines from five vineyards, the “grands crus of California”

• Napa Valley Reserve - ~500 members, $140K+ initiation fee, members make their own wine on-site

• Promontory - land he first spotted in the 1980s but couldn’t acquire until 2008. He waited twenty years.

In 2021, he handed the keys to his son Will (when your plan is 200 years, succession is the backbone of the strategy).

Sitting there, tasting the wine, hearing the history, I kept thinking about how calming this business approach felt compared to the current frenzy—where every other Twitter/X post is about vibe coding an AI app this weekend and exiting by Q4.

Harlan’s model refuses to rush; and it works because of that refusal.

It also happens to be an extraordinary business.

A premium Napa estate like Promontory is a vertically integrated hospitality company that grows grapes. The wine is the product, but the economic engine is bigger:

• Tasting rooms: $75-$250/person, 50-150 visitors/day at top estates

• DTC wine clubs: $500-$5,000+/year, auto-shipped, recurring

• Private events and dinners: $10K-$50K per booking

• Full retail wine sales: no distributor margin, 70%+ gross margins

Underneath all of that sits appreciating land in one of the most supply-constrained markets in the country—the agricultural preserve prevents new development across most of the Napa Valley floor.

But here’s the thing my dad was right about, even if he didn’t frame it this way: you don’t have to buy 240 acres in Oakville to invest in the California wine ecosystem. There are layers. And some of the best opportunities sit below the trophy level.

Five ways in — from most to least capital-intensive:

1. Buy an existing estate ($10M-$200M+). The Harlan play.. own the land, vines, brand, tasting room, DTC operation—the whole vertical stack. It’s a generational bet, with steep entry, but requires literal decades to build the brand.

2. Buy raw vineyard land and sell grapes ($500K-$5M+). Premium Napa Cab grapes sell for $8,000–$40,000+ per ton on long-term contracts. If you plant the right varietals on the right slopes, you’ve got recurring revenue with agricultural tax benefits and land appreciation. Downside: vines take 3–5 years to produce.

3. Build or acquire a tasting room ($1M-$10M). Some of the best returns in wine country come from the hospitality wrapper. License production to a custom crush facility and focus on the guest experience, events, and wine club.

4. Invest in vineyard-adjacent real estate ($2M-$20M). Restaurants, boutique hotels, event venues in Yountville, St. Helena, Healdsburg. Same demand drivers as the estates, with none of the agricultural complexity. The French Laundry didn’t need to grow grapes to become the most valuable restaurant brand in America.

5. Join a wine fund or fractional platform ($50K-$500K). Fractional vineyard ownership, barrel programs, or wine brand incubation. You get modest returns but it’s accessible entry and the tax benefits (ag exemptions, conservation easements, vine depreciation, etc.) still apply.

Whatever your entry point, the thesis is the same: supply-constrained land, a hospitality engine on top, and a tax wrapper that makes your accountant smile.

Tax credit investing scares many real estate investors. And rightfully so: programs like Low-Income Housing Tax Credits (LIHTC) and New Market Tax Credits involve competitive allocation processes, layers of regulatory compliance, and deal structures that can take years to close.

But as a private investor, I’ve fallen in love with historic tax credits. The program is non-competitive. The universe of eligible buildings — about 95,000 on the National Register of Historic Places — is large enough to offer a steady pipeline of opportunities but fragmented enough that institutional capital ignores it entirely.

I’ve invested in several HTC deals as an LP over the past few years, and the category has become one of my favorite corners of real estate precisely because the checks are small, the buildings are old, and every deal is completely different from the last.

How the Math Works

To see how HTCs work in practice, consider The Foundry in Newburgh, New York, a small city about 90 minutes north of Manhattan. Developer Jake Chai and his partners at Mana Tree Properties acquired the 160,000-square-foot former factory complex out of bankruptcy in 2020. The building is where early ice machines and cold storage equipment were manufactured starting in the 1880s, and it had cycled through several failed residential conversion attempts before Chai’s group picked it up and converted it into 59 residential units.

Chai wrote a detailed case study of The Foundry for Thesis Driven that’s worth reading in full, but the key takeaway is that the deal simply wouldn’t have worked without historic tax credits.

That’s a common story. Rehabilitating a historic building is almost always more expensive than building new — in a market like the Hudson Valley, ground-up Type III construction might run $125–175 per square foot, while a historic rehab can cost $200–300+ per square foot once you account for century-old structural systems, code compliance challenges, and the requirement to preserve the building’s historic character. Without a subsidy, most of these projects simply don’t pencil.

The federal HTC covers 20% of Qualified Rehabilitation Expenditures (QREs), which include most hard and soft costs tied to the renovation — construction, architectural and engineering fees, construction period interest — but exclude land acquisition and new construction. Many states layer on additional credits. New York, for instance, offers a 20% state credit, bumped to 30% for projects under $2.5 million in QREs. Stack a 20% federal credit with a 20–30% state credit, and you’re looking at credits covering 40–50% of a project’s rehab costs.

Here’s what the math looks like on a typical deal:

• Total project costs (excluding land): $28 million

• Qualified Rehabilitation Expenditures: ~90% of project costs, or about $25 million

• Federal credit (20%): $5 million

• State credit (20%): $5 million

• Total credits generated: $10 million

The developer then sells those credits to a tax credit investor — typically a large bank or insurance company looking to offset its own tax liability. Credits sell at a discount, and after structuring and financing costs the developer typically loses about a third of the face value. But the net result is still roughly $6.5 million in effectively free equity injected into the capital stack.

That changes everything about the deal:

• Without HTCs: a construction lender might finance 70% of project costs, leaving roughly $8.4 million in equity needed. On a deal that stabilizes at a modest spread over basis, you might see a levered IRR in the low-to-mid teens — if the deal pencils at all given rehab costs.

• With HTCs: that $6.5 million in credit equity covers most of the gap, reducing the true out-of-pocket equity to under $2 million. The same stabilized asset now throws off levered IRRs in the mid-20s or higher, with a multiple on invested capital that’s dramatically improved.

For a developer, HTCs can turn a project that flat-out doesn’t work into one with compelling risk-adjusted returns. For a passive investor alongside that developer, it means getting into a deal at a meaningfully lower basis than the building’s stabilized value.

Why Institutions Can’t Compete Here

The structural barriers to institutional HTC investing aren’t going away, and they’re worth understanding because they’re the source of the private investor’s advantage.

Every deal is bespoke: there’s no standardized product. Each building has its own history, its own NPS approval requirements, and its own construction surprises: a penthouse floor with trusses poured at the wrong clearance height, a roof that needs full replacement with historically appropriate materials, or a facade restoration that requires sourcing discontinued brick. You can’t model these variables on a spreadsheet and deploy capital programmatically.

The deal sizes compound the problem. Nearly half of all HTC projects in 2021 were under $1 million in total cost, and 18% were under $250,000. A fund manager writing $50–100 million checks has no mechanism to participate in a $3 million rehab of a 19th-century factory, and the diligence overhead doesn’t justify trying. Thirty percent of certified projects in 2021 were in communities fewer than 50,000 people. These are the kind of markets that institutional capital has never figured out how to reach efficiently.

The pipeline is also finite and fragmented. Of the roughly 95,000 buildings on the National Register, about 47,000 have already been developed using HTCs. The remaining 48,000 are scattered across the country, and the most accessible and viable projects were developed earliest. Finding the next good deal requires local knowledge, relationships with municipal governments, and patience — none of which scale.

All of this means the competitive set for any given HTC deal is remarkably small. You’re not bidding against Blackstone or competing with a REIT. You’re working with a local developer who has done two or three of these deals and knows exactly which buildings in their market are viable candidates. For a private investor, that lack of competition is the whole game.

How to Actually Invest in HTC Deals

For passive investors interested in the category, the path starts with finding the right operators.

HTC deals live and die on the team. You want a developer who has completed at least one HTC project, has established relationships with tax credit investors and bridge lenders, and knows their local market’s historic building stock inside and out. Many of the best HTC developers are based in secondary and tertiary markets — places like Newburgh, NY, or small cities across the Hudson Valley, the Rust Belt, and the Southeast where historic buildings are plentiful and acquisition costs remain low.

The credit structure is the next thing to understand. The key question on any HTC deal is whether the developer plans to retain the credits directly or sell them to a tax credit investor. Larger projects generating over $5 million in credits typically sell to institutional buyers — big banks like U.S. Bank that have dedicated teams purchasing credits at a discount to offset their own tax bills. Smaller projects often have the developer retain credits, which is simpler and more cost-efficient but requires the developer to carry sufficient tax liability to use them.

It’s also important to understand how the capital stack works in practice. Tax credit proceeds don’t flow until the building is placed in service and the National Park Service signs off on its Part 3 inspection, which means developers need bridge financing to access the credit value during construction. That bridge loan gets repaid once the building receives its certificate of occupancy and the credits are formally earned. Make sure the capital stack accounts for this timing gap, and that the bridge lender has real HTC experience.

Finally, the best HTC developers know how to layer credits with other incentive programs — LIHTC, Brownfield credits, New Market Tax Credits, PILOTs, and TIF financing — to further reduce the equity basis and improve returns. Stacking programs adds complexity, but it can also make marginal deals highly attractive.

The Investor’s Edge

What I find most compelling about HTC deals as an investment category is that the returns are driven by a structural inefficiency rather than a market bet. You’re not underwriting rent growth or cap rate compression. You’re benefiting from a federal program that effectively subsidizes your equity basis, combined with a competitive landscape that keeps institutional capital on the sidelines.

The underlying assets — historic buildings in communities that need investment — also come with a built-in story that tenants and local governments want to support. These deals often carry goodwill, tax abatements, and community backing that conventional developments simply don’t get.

There are real risks, of course. Construction on old buildings always produces surprises, and the NPS compliance process adds time and complexity to every project. The five-year recapture period means you can’t sell more than a third of your ownership without triggering a clawback of credits, so these are long-duration, illiquid investments that require genuine trust in your operating partner.

But the feature that matters most to me is that the category doesn’t scale. You can’t build a $500 million HTC portfolio without an army of local developers and a high tolerance for complexity, which is exactly why institutional capital stays away. For a private investor writing smaller checks and willing to get into the details of individual deals, it’s one of the few remaining corners of real estate where they hold a genuine, structural advantage over institutions.

-Brad Hargreaves

A 2,150-square-foot glass box is producing some of the best unit economics in real estate.

I played padel for the first time a few years ago. I’m not a racquet sports “purist” (i.e., I don’t scoff at people who play pickleball). But I never really got pickleball. It felt like life-size ping pong… and it was loud.

Padel I got immediately. It has the footwork and feel of tennis, but the glass walls add a layer of angles and strategy that makes every rally feel like a chess match at full sprint.

And it prints money.

For the uninitiated—padel is a glass-enclosed court sport, about a third the size of tennis. Solid paddles instead of racquets. Walls are in play, like squash. Always doubles. It’s the fastest-growing sport in the world: 25 million players globally, number one participation sport in Spain and Argentina, 60+ countries in the international federation, and over 300 courts now open in the U.S.—with hundreds more breaking ground.

The “always doubles” detail is everything. You can’t play alone. Every session requires four people—which means four memberships, four drink orders at the bar after, and four referrals to friends. The viral loop is built into the rules of the game.

The real estate math

This is where it gets interesting. A standard padel court is roughly 2,150 square feet. With buffer space and common areas, figure 3,000–3,500 square feet per court. A typical facility runs 4–8 courts—total footprint of 15,000–30,000 square feet. That’s a dead Bed Bath & Beyond. Or a half-empty suburban strip center; or a warehouse nobody wants.

The conversion economics:

• Build-out cost: ~$150K–$250K per court (glass enclosure, turf, lighting, HVAC, F&B)

• Six-court facility total build-out: $1–$1.5M ($75/sqft), excluding lease

• Compare to: boutique fitness at $300–$500/sqft, restaurants at $400+/sqft

Padel is meaningfully more capital-efficient than almost any comparable use, with minimal operating expenses thanks to a highly efficient staffing model compared to full gyms

The revenue model:

• Court rentals: $60–$120/hour for four players, i.e., $15–$30/person (cheaper than SoulCycle)

• Single court at 10 hrs/day, $80/hr average: ~$290K/year

• Six courts: ~$1.7M in court revenue alone

• Layer in memberships ($150–$300/month), coaching ($80–$150/hr), leagues, F&B, retail, events

• Well-operated six-court facility: $2.5-$4M in annual revenue (with 35% EBITDA margins) on a $1.5M build-out

Those are SaaS-level returns on physical infrastructure.

Why this isn’t pickleball 2.0

The natural comparison is pickleball—but there are real structural differences. Pickleball retrofits onto existing tennis courts, which means it often competes with (and annoys) existing tennis infrastructure. Padel requires purpose-built glass courts, which means dedicated facilities, which means real development—not just painted lines on a public park.

More importantly, padel doesn’t need a star instructor. Unlike SoulCycle or Barry’s, the product is the game itself. No charismatic coach or “experience” to manufacture. The moat is the court, the community, and the location.

The operators moving fastest are Padel Haus (Brooklyn, Miami, Austin) and Hello Padel (multiple markets)—and raising capital faster. And then there are groups like Ballers who are bringing padel in alongside other small court/field concepts tied to F&B and social experiences.

The sleeper angle: residential padel

Every wealthy person who plays once asks the same question: “Can I build one at my house?”

Private courts are already popping up across the Hamptons, Palm Beach, Aspen, and Malibu. An outdoor court runs $75K–$150K fully installed—a rounding error on a $20M property and instantly the centerpiece of every weekend.

Developers are taking note too. Padel courts are showing up in luxury condo amenity packages, replacing tennis courts that sit empty all day with padel courts that run 12 hours on a Saturday… smaller footprint; lower build cost; and dramatically higher usage.

The bottom line

The U.S. padel market is roughly where European padel was in 2015: early, fragmented, and about to go vertical. The operators who lock up the right locations and build real communities will create valuable portfolios ripe for institutional acquisition. And the investors who see a vacant 20,000-square-foot retail box and think “six padel courts and a bar” should be moving now.

Last fall I drove three and a half hours west from New York to visit a friend’s property in the middle of nowhere, Pennsylvania (Washington County, to be exact). If you haven’t been to Washington County, picture: rolling hills, no cell service, a Dollar General every 11 miles, and the kind of quiet that makes you realize how loud your life actually is.

My friend bought 60 wooded acres out there for $150,000. One-five-zero. For that he got a three-bedroom house, a barn, a stocked trout stream, and more land than he can see from any single point on the grounds. His monthly cost to maintain the property? About $100. The taxes are almost a rounding error.

That weekend we rode ATVs, fished the stream, shot guns off the back porch, rebuilt a woodshop in the barn, cleared some trails, drank a lot of Natty Light by a fire, and watched Batman (the Michael Keaton one) on VHS in the living room. It was, without exaggeration, the best weekend of my year.

And somewhere between the trout stream and the sixth Natty Light, a thought formed that I hadn’t been able to shake since: I want to be a prepper.

I realize “prepper” conjures a certain image—bunkers, canned beans, a guy with a manifesto and too many guns. But I’m starting to see the appeal of owning a large piece of land far away from everything. The tinfoil hat crowd might be early, but early isn’t the same as wrong.

Let me explain.

The AI revolution is not coming. It’s here.

And the second-order effects are going to reshape the physical world in ways most people aren’t pricing in.

The K-shaped economy is already accelerating. The top decile is accumulating wealth at a pace we haven’t seen since the Gilded Age, while the middle class is getting hollowed out by automation and AI-driven productivity gains. McKinsey estimates that up to 30% of U.S. working hours could be automated by 2030. Goldman Sachs puts the number of global jobs at risk at 300 million. These aren’t fringe predictions—they’re coming from the same banks underwriting your deals.

What happens when a meaningful percentage of the workforce is displaced in a compressed timeframe? History offers some clues, and none of them are reassuring: social unrest, political instability, and density becoming a liability rather than an asset.

Add to that the rise of humanoid robotics—Tesla’s Optimus, Figure AI, Boston Dynamics—and you start to see a future where cities look and feel fundamentally different: more automated,ess human, and less livable in the ways that matter.

Now ask yourself: where do you want to be?

The ultra-wealthy are already answering that question. And the answer, increasingly, is land.

The land market in the United States is one of the most interesting and misunderstood asset classes in real estate. Here’s what most people don’t realize:

Supply is fixed and shrinking. The U.S. has roughly 1.9 billion acres of land, but only about 40% of that is privately held. The rest is federal, state, or tribal. And the amount of privately held rural land entering the market each year has been declining for decades as institutional holders, timber companies, and conservation trusts absorb the supply.

Meanwhile, the USDA reports that roughly 11 million acres of farmland and ranchland changed hands annually over the past five years—but the buyer pool is shifting dramatically toward institutional capital and ultra-high-net-worth individuals.

Demand is spiking from a new buyer class. The “retreat property” market—rural land purchased for recreational, prepper, or lifestyle purposes—has exploded since 2020. The Land Report, which tracks large-acreage transactions, has documented a surge in family office and HNWI land acquisitions (particularly in the Mountain West, Appalachian corridor, and rural South):

• John Malone is the largest private landowner in the US with over 2.2 million acres

• Ted Turner holds roughly 2 million

• Jeff Bezos owns over 400,000 acres

Meanwhile, Bill Gates is the largest private farmland owner at roughly 270,000 acres.

The tax benefits are extraordinary.

Land ownership unlocks some of the most powerful tax strategies in the real estate playbook.

• Conservation easements allow landowners to permanently restrict development on their property in exchange for a tax deduction often valued at 40–60% of the land’s fair market value.

• Agricultural exemptions can reduce property tax assessments by 80–90% if you run even a modest farming or timber operation.

• 1031 exchanges allow tax-deferred rollovers from other real estate holdings.

• Opportunity Zone designations, where applicable, offer capital gains deferral and potential elimination.

• Timberland, in particular, offers a unique advantage: timber revenue is taxed at long-term capital gains rates rather than ordinary income, and the cost of the timber itself can be depreciated over the cutting cycle.

For a family office looking to park capital in a hard asset with a favorable tax wrapper, rural land is arguably the single best vehicle available.

Now the fun part: what a modern doomsday property actually looks like.

Forget the Cold War bunker aesthetic. The “luxury prepper market” has evolved into something that looks more like a five-star resort buried underground.

Hardened Structures, a Virginia-based firm, builds custom subterranean residences for clients spending $1 million to $10 million+ on their shelters. Vivos xPoint in South Dakota has converted 575 former Army munitions bunkers into the world’s largest private survival community.

A high-end doomsday compound in 2026 typically includes:

• A fortified primary residence—often earth-sheltered or partially underground—with blast-rated doors and ballistic-grade walls

• Below that, a bunker rated to withstand nuclear, biological, and chemical threats, with independent HVAC and NBC air filtration

• Power from a hybrid system—solar array, wind turbines, and a buried diesel or propane generator with 12+ months of fuel storage

• Water sourced from a private well with UV purification, reverse osmosis filtration, and a rainwater collection cistern

• Food production handled through a combination of hydroponic grow rooms, greenhouse structures, root cellars, and long-term freeze-dried storage rated for 25 years

• Communications run on Starlink for internet, with ham radio and satellite phone as backups

Above ground, the best compounds include arable land for farming, timber for building and fuel, a freshwater source (stream, spring, or pond), and enough acreage to create a defensible perimeter—typically 50+ acres minimum.

These properties include shooting ranges, hunting grounds, off-grid workshops, and ATV trail systems. And if you really want to spend some money, you can add medical suites with telemedicine capability, safe rooms with biometric access, faraday cages to protect electronics from EMP, etc.

The total cost? For a turnkey doomsday compound on 50–100 acres in a favorable state—Wyoming, Montana, West Virginia, rural Pennsylvania, the Ozarks—you’re looking at $2 million to $15 million all-in, depending on spec.

That’s a rounding error for the family office crowd.

And unlike a penthouse in Miami or a house in the Hamptons, it’s an asset that appreciates in value precisely when everything else doesn’t.

So who’s building a doomsday real estate investment platform for luxury preppers?

There is a place on East 10th Street where time doesn’t exist.

You walk through a door that hasn’t been renovated since the Clinton administration; descend a staircase that smells like eucalyptus and dryer sheets; and suddenly you’re a 19th-century immigrant getting schvitzed by a 260-degree Russian steam room and a guy named Boris holding oak leaf branches. The Russian & Turkish Baths have been open since 1892. The WiFi doesn’t work. It’s perfect.

I’ve been going for a decade.

Not in a “I discovered cold plunge before Huberman” way—more in a “my friend dragged me there hungover in 2014 and I became a person who goes to a bathhouse” way. Once a month, sometimes more, I’d pay my $45, stuff my phone in a locker that doesn’t lock, and cycle through steam, sauna, cold plunge, repeat. No app. No branded robe. No “intention-setting breathwork session.” Just hot, cold, and the most democratic cross-section of humanity you’ll find in Manhattan: old Russian men, finance bros in mid-existential crisis, downtown artists, supermodels, and the occasional tourist who wandered in looking for a speakeasy.

I love it. And I love it more every year, because every year the world gets louder, more online, more optimized. The bathhouse is none of those things. It’s a millennia-old practice—Romans, Ottomans, Japanese, Scandinavians, Russians—all figured out the same truth: sweating in a room with other people is good for you.

The science backs it up now, too. Regular sauna use is linked to reduced cardiovascular mortality, improved circulation, and lower rates of dementia. Dr. Rhonda Patrick has made a career of explaining why heat stress is basically a free longevity hack. But I didn’t need a podcast to tell me that. I needed Boris.

Wall Street Bath, better known as Spa 88, runs the same playbook downtown. No frills. Russian and Turkish rooms. A cold plunge that makes you question your life choices. Maybe $50. The crowd skews Financial District—traders unwinding, older regulars who’ve been coming since before the building next door was a condo. These places operate on thin margins, modest build-outs, and decades of community loyalty. They’re not businesses you’d pitch to a VC. They’re businesses that just... exist. Stubbornly, beautifully.

So when I tell you that venture-backed bathhouses are now raising money at eye-watering valuations, you’ll understand my complicated feelings.

Enter the New School

Bathhouse, in Williamsburg, opened in a restored 1930s warehouse and immediately became the kind of place that fills your Instagram Explore page.

Bathhouse in Williamsburg

The design is stunning—think Japanese minimalism meets Brooklyn industrial, with hot and cold pools, multiple sauna rooms, a restaurant, and a generally gorgeous vibe. They’ve reportedly raised north of $40 million.

Othership, which started in Toronto, combines sauna sessions with guided breathwork, live DJs, and what they call “transformational experiences.” They’ve raised significant venture capital and have aggressive expansion ambitions across North America.

Lore Bathing Club is the latest entrant, positioning itself as a members-only social wellness club—bathhouse meets Soho House, but without trying to be exclusive (I’m actually most bullish about both this business model & concept).

I get the thesis. I genuinely do. As someone who invests in niche real estate concepts for a living, the demand signals are screaming.

• The sober-curious movement is real—more people want intense, physically engaging social activities that don’t revolve around a bar.

• The loneliness epidemic is real—people want third places that aren’t a coffee shop or a gym.

• The longevity trend is real—sauna, cold plunge, and heat therapy are no longer fringe. And phone-free spaces? In 2026? That’s not a feature, it’s a luxury good.

The business model is attractive—these new concepts are essentially premium experiential fitness meets hospitality.

• Memberships range from $100 to $200+ per month, with day passes running $60-$100.

• Revenue stacks include retail (branded towels, supplements, skincare), F&B, events, and private bookings.

• The build-out costs are significant at $500–$800+ per square foot—plumbing for multiple temperature-controlled water features, commercial-grade HVAC, and high-end finishes,

The unit economics are very compelling at scale, with high throughput and strong membership retention.

But compare that to the old guard. The 10th Street Baths operate on what I’d generously call a “legacy cost structure.” They’ve been in the same space for over a century. The rent, whatever it is, is from another era. The build-out is paid for many times over. They don’t need 2,000 members at $150/month to make the model work. They need regulars who show up, pay at the door, and maybe buy a Platza treatment for an extra $40.

The Question I Keep Circling

Can the new school replicate the thing that actually makes bathhouses special?

Not the sauna. Not the cold plunge. Anyone can install those. It’s the communal authenticity—the randomness of who’s in the room, the lack of curation, the fact that nobody is performing wellness, they’re just... doing it. The 10th Street Baths are not an experience. They’re a place. There’s a difference.

The new bathhouses are undeniably experiences. They’re designed to be. And that’s both their strength and their vulnerability.

The comps that get thrown around in pitch decks are Barry’s, Equinox, SoulCycle.

Those are exercise concepts with clear, repeatable, high-frequency use cases. You go to Barry’s three times a week because the workout changes. A bathhouse session is more or less the same every time. That’s the beauty of it, but it’s a retention challenge when you’re charging a premium. The ancient bathhouse model solved this by being cheap, local, and habitual. The new model needs to solve it with programming, community events, and brand loyalty.

I’m not betting against the category. The macro trends are too strong, the consumer appetite is too real, and some of these operators are incredibly thoughtful about what they’re building. The ones that will survive are the ones that figure out they’re not really in the sauna business—they’re in the community business. And community, as the old-timers on 10th Street could tell you, can’t be fundraised into existence.

It has to be sweated out.