One of my favorite investment themes is about investing like you don’t need the money. Because THE MARKET doesn’t care about your NEEDS. Time and time again it’s the investor who doesn’t need the market who ends up being as RICH AS CROESUS. I want you to think about your investments as lifetime positions that you don’t need to maintain solvency. Learn, like I do, from the rich and you’ll discover what TRUE investment success feels like.
Konrad Putzier discusses Charles Koch and his company’s real estate business, writing in The Wall Street Journal:
Koch Industries Inc. is emerging as a major real-estate investor during the pandemic, using its robust cash reserves to buy properties at beaten-down prices and betting on a longer-term recovery.
The company’s Dallas-based property arm, Koch Real Estate Investments, is among a growing number of investors looking to take advantage of the depressed market. But few others have been as ambitious in their acquisitions.
Real estate is a relatively new focus for Koch Industries, the sprawling Wichita, Kan.-based conglomerate headed by billionaire Charles Koch with interests ranging from chemicals to manufacturing and oil refining, among many other industries. Mr. Koch and his brothers are also known for contributing to Republican candidates and conservatives causes.
The property arm is only four years old and until last year kept a low profile, quietly buying stakes in a number of properties but mostly hiding behind developers and other investors.
That changed during the pandemic. Koch last month made a splash in taking over an unfinished multibillion-dollar hotel-and-casino development on the Las Vegas Strip after the previous owner defaulted on his mortgage.
The company last spring backed Ladder Capital with a $206.4 million credit facility when the mortgage lender was coming under financial pressure from the pandemic. Koch invested in Amherst Holdings LLC’s single-family-rental business and in a Nashville, Tenn., office development. Before the pandemic, the company bought a stake in life-sciences real-estate developer IQHQ Inc.
In some ways, Koch’s property arm more closely resembles sovereign-wealth funds than other U.S. real-estate investors. It has access to plenty of money, thanks to its corporate backer. And unlike private-equity companies such as Blackstone Group Inc., it doesn’t raise funds from others that it has to repay after a fixed time span. So it can take a longer view, allowing Koch to jump on projects that might be too expensive or complicated for others.
Action Line: Plan to invest like you don’t NEED the market to save you from yourself.
