Mark Moshayedi

Expanding Capital Sources Gives New Firm the Edge

Carrie Rossenfeld Finance & Capital Markets

Mark Moshayedi and Ryan Gallagher recently joined forces to form Space Investment Partners, an Irvine, California-based, fully integrated commercial real estate investment, development and management firm. The company, which utilizes both private and institutional capital, will look to take advantage of the significant changes that are going to impact commercial real estate over the next five to 10 years.

Moshayedi is a serial entrepreneur who has created hundreds of millions of dollars in enterprise value through companies he has built; Gallagher spent the last eight-and-a-half years as a senior managing director and co-head of the Orange County office at HFF. David Hirsh, a former Blackstone executive, will join them taking on the role of senior advisor.

Ryan Gallagher | Images courtesy Space Investment Partners

SoCal Real Estate caught up with Moshayedi to discuss what it has meant to him to be a serial entrepreneur, how it has informed his perspective on CRE, and the industry shifts he sees happening at this point in the SoCal real estate market.

SoCal Real Estate: What has led you to be a serial entrepreneur?
It’s a mentality, basically. You have to continue evolving and developing both on a personal and financial basis. We continue to come up with a new idea that at the end of the day turns into a business, and you expand it. For many years, I was in the tech sector, and I sold a company in 2013. Since then, I have been in many different types of businesses, from running a classic-car business to real estate to being on the board of a vacation-rental business. I’ve been keeping busy with investments and helping close friends with their businesses as well. When you know how businesses run, you know how to turn someone’s passion into a business. With discussion and guidance, you can help people. You can provide things that take people many years to learn and help them to achieve their goals. If I can be personally involved with a business and invest money or time to help them out, I prefer that. It takes lots of sacrifice to get there — personal sacrifice of time and energy, as well as the financial perspective.

How has your experience as a serial entrepreneur informed your perspective on commercial real estate?
The way that I look at CRE is as a business. I don’t fall in love with a property; I just look at it as a financial transaction and translate it into something that is going to make you money. It’s not like a home that you need to live in. Most people look at transactions foolishly; I look at it as a business. It’s just like running a business, where you try to provide a service or product and try to make those as attractive as you can and sell it for as much as you can. CRE is no different.

What industry shifts do you see happening at this point in the cycle, and how will they manifest themselves in the SoCal market?
Obviously, technology and demographic shifts will influence the market here profoundly. It’s our opinion that these shifts in the market will play through and open up lots of opportunities. They will drive growth in occupancy in all the markets we serve — either residential, office, or retail. All these changes we see tech wise will have a huge effect. We’re focused on STEM talent and demographic shifts, and our strategy takes that into account, so whatever real estate we buy is around STEM talent. There is quite a bit of changes happening in the market because of the people associated with technology.

How is your firm different from others in the industry?
One of the major differences between us and other companies it that we utilize both private and institutional capital as well as our own funding. This way, we have the ability to execute a purchase no matter what we’re looking at. By having both private and institutional capital, we can buy deals at very low and very high prices, and we don’t have to be focused on just the low or high end of the market. Most of our competitors focus on one or the other; they don’t have the freedom to tap into both markets and execute on deals. Ryan’s background is in transacting multiple billions of dollars of deals in the market, and David Hirsh has had a strong management portfolio at Blackstone. We have put together a very good team to take advantage of opportunities that come our way.