New Jersey has come under the spotlight recently. With Amazon naming Newark finalist in its HQ2 search and investors hoping to find friendlier alternatives to the often impenetrable New York market, the area is bound to shine for quite a while. Jeff Holzmann, managing director of online investment platform iintoo, discussed with Multi-Housing News about how technology, progressive legislation and the new Opportunity Zone Program is changing the state’s real estate landscape.
iintoo is a fairly new player in the U.S. real estate investing marketplace, having entered the game last year. What is the strategy behind this move?
Holzmann: iintoo is an international investment firm originally founded in Israel in 2015. After achieving success and brand recognition in the local market, it decided to expand to the U.S. and other global markets. Besides a few properties in Western Europe, our real estate portfolio comprises mostly U.S. assets. The company has raised more than $130 million so far and today it includes investors from Israel, the U.S., Argentina and Saudi Arabia, to name a few. Additionally, the global social network platform iintoo includes more than 30,000 members.
What is iintoo’s operating mechanism and how does the company help investors take their projects to the next level?
Holzmann: iintoo is all about access. By employing our real estate investment model, we allow regular people to invest in commercial grade real estate that they otherwise couldn’t access. Finding quality projects is quite difficult, as it’s very expensive and requires skill and experience to vet the sponsors and specific deals. It’s time-consuming to perform the required due diligence process and negotiate a mutually beneficial contract between all parties.
Even if an individual has access to a sponsor, that individual would have to bear the cost of legal, accounting and appraising just to gain a seat at the table. By spreading those costs across multiple investors and using its own expertise and experience, iintoo is able to make these deals accessible and economical to regular investors starting at $25,000. This combination between technology and progressive legislation made it possible for people to actually enjoy the previously unavailable perks of commercial grade real estate.
Your company secured several strategic partnerships with both national and local investors. Any memorable projects you’ve worked on?
Holzmann: Each project is memorable and no two projects are ever the same. iintoo partnered with some of the leading names in commercial real estate, including Meridian Capital, with whom we work on a daily basis. We also had the pleasure of working with multiple sponsors across the country such as Hello Living.
What are the projects you are working on right now in New Jersey? Does this market have any particularities?
Holzmann: We have several projects in the Garden State. We’ve fully funded projects in Guttenberg and Essex County and we are currently wrapping up an investment in Paterson. We love the state and these projects because there is high demand for multifamily assets close to New York City. Additionally, the cap rates and potential returns are better as the intense competition inside Manhattan pushes the yields lower. We plan to continue and invest all across New Jersey, as one of our projects is already in final stages.
How do you think the recently approved Opportunity Zone Program will influence New Jersey’s development direction?
Holzmann: The new program is very interesting, as it marries funds that are looking for a tax break with areas that are underserved in terms of investments. Red tape can kill a good idea and while the initiative is great, we need to see that the execution meets the intent. If we can take advantage of this program and still invest in a submarket, we would be inclined to participate in it.
Newark was recently named finalist for Amazon HQ2. What are your views on the matter?
Holzmann: Newark is an interesting idea. Amazon is more likely to choose an area where they can make an impact and secure better financial terms. I don’t see them going vertically in New York City, becoming just another firm, while subjecting their workforce to the gridlock traffic of the city. Newark is being gentrified. It’s a different place than it was in the ’90s. With Whole Foods and other stores moving into the area, the neighborhood is being transformed. The place is changing and you are witnessing the future in progress.
Image courtesy of iintoo