Invest in pandemic resistant real estate in the USA

Moneyweb’s Ryk van Niekerk talks to OrbVest CEO Martin Freeman in New York.

 

RYK VAN NIEKERK: OrbVest is a global real estate company based in New York which offers investors from around the world the opportunity to invest directly into US commercial properties, predominantly in the medical sector. I’m now speaking to Martin Freeman, he is the CEO of OrbVest and he is in New York. Martin, thank you so much for joining me. We are currently living in a crazy world which will significantly affect many of our future decisions. You are in New York, which is one of the world’s primary financial centres. How are things in New York at the moment?

MARTIN FREEMAN: Morning Ryk and thanks for having me on your show. I certainly do live in New York and it is crazy times at present. I told my family and friends in South Africa about two weeks ago that I felt that New York would be in some form of lockdown by the end of March. I certainly did not expect that prediction to include South Africa and total lockdown. So I suppose you can sum it up by saying we all know how this started. I suppose everyone has a different view on how it’s going to end.

RYK VAN NIEKERK: OrbVest, it’s an interesting company. It’s an interesting opportunity. Just tell us the history of OrbVest, where did this company come from?

MARTIN FREEMAN: Ryk, that’s a great question and just to take you right back to the beginning, I’m a serial entrepreneur. I love to start and build businesses to very large scales.

When I exited one of these businesses in 2012 I had the opportunity when I was in South Africa to attend an executive management programme at Harvard in Boston, USA. It was an amazing experience and whilst I was there, I really began to appreciate the power and the stability of the US, both for my family’s perspective and my kids. And then also I wanted to invest personally in real estate. So it was over this period that I met my current partners who were embarking on the same journey of helping South Africans, and themselves, [to] invest into real estate in the USA, and specifically the niche that I wanted, which was just stable, good dividends.

So for six years now, my team has been acquiring real estate and in particular medical office buildings. These buildings are multi-tenanted [and] these tenants are stable, with long leases, and they are profitable. And therefore we are able to offer these great-yielding yet low-risk investments to our investors. We then started to raise equity for these projects globally. We have seen amazing year-on-year growth, and we’re now raising equity from over 10 countries.

RYK VAN NIEKERK: There are many segments, niche segments in the property sector. Why did you decide to focus on the medical sector? It seems very, very niche.

MARTIN FREEMAN: So healthcare in the US is a vast and very powerful industry that is in the trillions [of dollars], and as you correctly said, there are many segments to it. It covers hospitals, senior living, assisted living, medical office buildings and so on and so on. And so we chose the healthcare niche just because of its stability.

We chose the US as a country because of its power and might, and we also chose the medical office buildings [niche] because it offers the consistent returns that we believe most investors in the world are seeking. And because of the multi-tenant nature and the profitability of the tenants, it just offers the perfect combination of investors able to receive, for example, 8% cash on cash and also profit when we sell the building. But again, without the associated risk of, for example, retail and commercial buildings and other sectors.

Some of OrbVest’s medical centres in the US

RYK VAN NIEKERK: So what you do is you identify a very suitable property in the medical field. You then buy it and offer individual investors to actually buy a small share of that building. Is that a model?

MARTIN FREEMAN: Correct. So what we do is we’ll find a building in one of the areas that we invest in, generally one of the areas that are growing from a population perspective, like Texas, Atlanta, Georgia or New Jersey. We’ll identify the building, [and] we will then go out and raise the equity globally. Each person invests directly in the building.

So it’s not a portfolio. They are investing directly in the building and becoming owners of real estate in the USA in a very simple manner.

RYK VAN NIEKERK: It’s definitely a property syndication model – now that model doesn’t have a very good name in South Africa due to some spectacular failures such as the Sharemax and Picvest schemes. Why is OrbVest different?

MARTIN FREEMAN: We often get asked that question and the reality is that we offer a transparent, simple solution. Also, you have to look at the team that manages the business, and you have to look at our track record. We’ve been doing this for six years. We’ve been helping thousands of investors from around the world. You’re investing directly in the building. Remember, I was exactly the same as your listeners – I wanted to simply just take my money and put it into some kind of stable asset invested overseas.

The problem was that technology didn’t really allow for it so many years ago and nowadays it allows for us to be able to do this seamlessly.

You go on[line], you’re an investor in that building, and that’s the difference.

It’s not a portfolio. [It’s] like you bought a building in Sandton – you would have tenants, you would have income, you would have expenses. It generates a return. And it’s all transparent. And the people that run each of these buildings and whoever [has the] final say in these buildings are the investors themselves.

And so that’s the reason why people invest with us. They get to understand our model. They want to do it again and again. And it’s extremely simple and transparent and most important, trustworthy.

RYK VAN NIEKERK: Martin, thank you so much for your time. That was Martin Freeman, he is the CEO of OrbVest.

Brought to you by OrbVest.

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