Eye on Sun Valley: New firm targets commercial investments

Courtesy of Eye on Sun Valley

By Karen Bossick, August 10. 2016

A Wood River Valley real estate investor and developer has launched a new private equity firm designed to help investors take advantage of an underserved part of the market to make safe but valuable investments.

Co-Founder and CEO Robert Kantor announced today the launch of Headwater Capital, Inc., a private equity firm specializing in long-term, secure cash flow from commercial real estate, and its flagship property investment Olio Pavilion, LLC. 

The firm secured $1,725,000 from investors and arranged financing from A 10 Capital for the balance of the Olio purchase price.

Kantor said he created Headwater Capital to share his years of commercial real estate investing success with an expanded pool of investing clients seeking preservation of capital and predictable cash flow.

“I’ve been involved in real estate investment and development for 43 years—since the early- to mid-1970s. And I’ve learned a fair amount about the use of real estate as part of an investment strategy to provide cash flow,” he said. “I’ve learned about the risk involved in various aspects of real estate and what I would invest in or recommend people invest in to reduce risk while still providing a stable cash flow.”

Kantor said the Olio property exemplifies the attributes of an ideal Headwater Capital investment—it’s projected to offer an average annual cash yield of more than 7.0 percent per annum over a 10-year period with “a very low risk profile.”

Commercial real estate acts as an alternative to volatile U.S. and global equity markets, Kantor said. Well-positioned real estate can also offer certain tax benefits and act as a primary hedge against inflation.

More than $1.1 trillion of global capital is targeting real estate investment in 2016. The global total of actual commercial property investment in 2015 was $876 billion, according to Global Investor Intentions Survey in February 2016.

“I found a segment of the market that was generally underserved and I knew that there was a way to buy excellent quality commercial real estate that would intrinsically valuable and then apply a very modest leverage or lending to that asset,” Kantor said.

“I have lived through cycles—good cycles and bad cycles. And one of the biggest enemies of a bad cycle is having borrowed too much money. So I put these elements together for some friends with the idea of helping them invest safely and securely in assets that are going to be valuable for a really long time while generating enough cash flow to make a difference in people’s lives. And it has grown into a business.”

Kantor and his team have acquired and managed investments in excess of $500 million over the past four decades. The team plans to monitor and manage each asset involved with Headwater Capital to ensure preservation of value and maximum return on investment.