Los Angeles-based TruAmerica Multifamily, which specializes in the workforce housing market across the US, earlier this month hired Rob Kukulka as a capital markets adviser, Middle East, with the mandate of expanding its investor relations presence in the region as well as its capital markets activities.
Kukulka, who spent more than a decade as the global head of capital markets and deputy chief operating office of the real estate and infrastructure division of the Abu Dhabi Investment Authority, is based in Chicago.
When he returned to the US, Kukulka knew he wanted to leverage his experiences in the Gulf region and maintain his relationships and contacts there. “I got into discussions with various firms about how I could help them access investors in the region because of my broad network,” Kukulka told Real Estate Capital USA.
Ultimately, TruAmerica ended up being the best fit given their focus on workforce housing and the supply-demand imbalance in the sector.
“The multifamily asset class has very strong underlying fundamentals, even though we are in a turbulent time in the capital markets,” Kukulka said. “I think housing imbalances in the US are such that there is a long runway for folks with strong capabilities in multifamily. I also really liked the fact that their focus is workforce housing because this is a broader and deeper market. The combination of the asset class, their execution capabilities and their entrepreneurial environment was a good fit.”
The firm ultimately may evolve its strategy to include single-family rentals, which Kukulka believes is another complementary asset class in residential. “The capabilities TruAmerica have developed in the multifamily sector will translate well there,” he added. “SFR started to emerge as a new asset class on the heels of the global financial crisis and, since then, folks figured out how to get around some of the impediments of the past and how to scale portfolios for operating efficiencies.”
He continued: “It is not just about buying existing product. It is about working hand in glove with homebuilders to develop new product.”
Kukulka described his role at TruAmerica as two-fold, given his experience in the Gulf region and the relationships he has built there as well as similarly strong contacts with large commercial banks and life insurance companies. “TruAmerica has done a great job with their existing relationships, but it I can bring new ones that would be a value add as well,” he noted.
Commercial real estate capital and finance flows continue to be global and a company like TruAmerica needs to have these kinds of sources on both the debt and equity side. “It is important to expand your investor and lending base because at different times, different institutions run into constraints,” he added.
Looking ahead, Kukulta believes TruAmerica will see substantial opportunities over the next 18-24 months.
“Transaction volumes have been much slower so there has been a big focus on operational efficiencies,” Kukulka added. “TruAmerica has a great deal of information on about 60,000 units, which is a real wealth of data. As we move ahead, we want to be a good, patient steward of capital and be patient.”
Kukulka believes avenues will start to emerge for investment as owners need to sell or need short-term equity or debt investments. “There is also the potential for distressed note sales and recapitalization opportunities for sponsors who can’t meet the requirements of their new loans,” he added. “Those opportunities will be there. The question is how fast they will emerge and how it will be important to be disciplined. Ten years from now, we will look at 2023 and 2024 and think, those were good times to invest.”