The FORT Podcast: Matt Lasky

Matt Lasky serves as Managing Partner and Senior Vice President of Equity Velocity Funds. He has advised clients nationally on over 1.3 million square feet of retail, mixed-use, and medical property since 2011. At Equity, he leads a team whose focus is on providing customized analytics and financial solutions to market strategy and capital markets clients nationally. The team brings deep experience in both multi-unit rollouts and acquisition/disposition work. In today’s episode, he and Chris discuss lender attitudes during the COVID-19 pandemic, Matt’s perspective on working as a principal owner in the medical real estate world, and much more.

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01:18 — Matt’s Background and His Career Up to This Point
04:41 — What was it about healthcare that intrigued you and brought you to Equity?
05:32 — What is it like focusing on both the service side and principal owner side of the business?
10:34 — How does a deal in this space come together?
13:10 — Is your fund a generalist fund or does each have its own mandate?
16:20 — What are you seeing on the front lines of Retail that you can share?
19:04 — Are lenders changing their attitudes during this COVID-19 crisis vs. the ’08 crash?
20:24 — Are there any best practices for handling rent relief?
23:55 — What is the difference between borrowing from CMBS vs. borrowing from a bank?
26:05 — Is there anything that’s been permanently damaging for retailers?
28:33 — What worries you going forward after COVID-19?
32:30 — Are insurers paying receivables quicker to close the gap?
33:09 — Did you go into this pandemic with anything under contract? Has anything with these contracts changed due to COVID-19?
36:03 — Is Equity on pause with acquisitions? What’s would your plan be if a deal presented itself right now?
39:27 — Where do you see the rest of 2020 and 2021 going? When do we get back to ‘normal’?
42:17 — Are you seeing any leasing activity or has it halted?
45:12 — Do you see retail rents taking a huge hit w/ social distancing or will a new player come in and take advantage of it?
47:54 — Is there anything interesting you suspect we might see 18 months from now?

Episode Summary

Serving as a part of the Equity family of companies, Lasky’s firm stands out for its comprehensive approach to real estate, spanning across various markets in the United States.

The conversation initiated with Lasky delineating his academic and professional trajectory, originating from his studies in finance and business analytics at Miami of Ohio, and eventually segueing into the real estate sphere. He underscored his preference for an autonomous work environment, a stark contrast to the investment banking route preferred by many of his contemporaries. Lasky’s tenure at Marcus & Millichap, a renowned real estate brokerage firm, was instrumental in honing his skills in sales and fostering relationships, foundational elements for his subsequent ventures.

Lasky’s discourse then transitioned into the intricacies of healthcare real estate, a sector he finds particularly intriguing due to its complexity and the undeniable macro tailwinds propelling the need for more healthcare services across the country. He spotlighted the intellectual challenges and the non-discretionary nature of healthcare real estate as compelling factors for his involvement.

Delving deeper into the operational aspects, Lasky illuminated the dual facets of his role, encompassing both service and ownership. On the service side, his team manages a vast portfolio, aiding healthcare providers in identifying optimal locations for their practices, spanning across 700 locations in 25 states. On the ownership side, Lasky discussed Equity’s strategic pivot to private equity funding, aiming to provide flexible capital for swift market movements and pricing opportunities. This shift addresses the evolving landscape of medical practices, with larger, consolidated spaces becoming more prevalent due to hospital acquisitions and the demand for comprehensive healthcare services under one roof.

The ramifications of the global pandemic on the real estate marketplace were scrutinized, with Lasky highlighting the delayed impact on healthcare real estate due to the lag in insurance reimbursements. He pointed out the potential cash crunch in the coming months as the effects of reduced patient visits start to manifest financially. On the retail front, Lasky provided insights into the challenges and strategic shifts in the sector, noting a pivot away from larger “junior box” retailers towards smaller, service-oriented tenants.

Lasky also touched upon the relationships with lenders, emphasizing a more collaborative approach in the current climate, a notable contrast to the experiences of 2008-2009. He underscored the importance of a thoughtful approach to rent relief, balancing compassion with the necessity for due diligence. Additionally, he shared insights into the internal processes for handling rent relief requests, detailing the use of a questionnaire to assess the financial impact on tenants and their efforts to seek government assistance.

Addressing the future of the industry, Lasky expressed concern for the service-oriented retail sector, particularly restaurants, given their thin margins and high failure rates. He underscored the need for a thoughtful, informed approach to navigate these unprecedented times, highlighting the nuanced impacts of current challenges on different types of real estate.

In the realm of deal-making, Lasky shared specifics about a project in West Texas and the difficulties in securing favorable loan terms, providing a real-world example of the challenges faced in the current market. He also discussed the changes in lender behavior and the impact on hospital systems, noting the increased spreads and the caution exercised by lenders due to the widespread drawdown on credit lines.