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REA
May 20, 2020  

Barachs' Real Estate Shop Seeking Partners

Vista Investment is looking for equity partners to help purchase up to $1 billion of properties in the Western U.S.

The Santa Monica, Calif., firm, founded in 2008 by Philip Barach and his son, Jonathan Barach, currently has about $1 billion under management, including partner money. Vista wants to buy another $500 million to $1 billion of properties in the next 24 months, with the goal of reaching roughly $5 billion of assets by 2025.

The push comes as Philip Barach is stepping up his duties as chief executive following his retirement last month as president of debt-focused fund shop DoubleLine Capital, which he co-founded in 2009 with Jeffrey Gundlach. DoubleLine, which had $148 billion under management at yearend, occupied much of Barach’s time during the past decade.

Vista’s portfolio currently encompasses about 2,000 apartments and nearly 2 million square feet of commercial space. Going forward, the firm will continue to focus on the multi-family sector, while also investing in office buildings and niche real estate such as data centers and life-science properties.

For years, Vista’s sweet spot was properties on the West Coast valued at up to $50 million. But its average deal size has risen to about $100 million in the past few years. And it now plans to broaden its geographic focus to markets throughout the Western U.S.

Vista expects to increase its investments in value-added, opportunistic and distressed deals amid the economic carnage caused by the pandemic.

“We formed Vista in the middle of the last recession knowing there would be opportunities as the economy recovered,” said Jonathan Barach, Vista’s president, who oversees acquisitions, asset management and capital markets. “We believe similar opportunities lie ahead, and it’s important that we prepare before a market correction — not after.”

The elder Barach will focus on raising capital for joint ventures with institutional investors. To date, Vista has made acquisitions in partnership with Acre Valley Real Estate of Chicago, Goldman Sachs Asset Management, Pimco and Japanese investor Tokyu Land U.S. The Barachs also are open to talking to equity partners about investing in the firm.

“We’ve reached the critical stage,” Philip Barach said. ‘We have a long enough track record and good enough record that we can start buying more institutional assets.”

Vista’s expansion plans predate the pandemic, but the Barachs see even more opportunity now. Philip Barach noted that he’s invested in every cycle from 1987’s “Black Monday” to the 2007-2008 market crash. The key, he said, is “liquidity and patience.”

“I’ve always kept enough liquidity around to a.) not be margined out of business, and b.) take advantage,” he said. “I’ve found it’s not that hard to find the capital. Finding the properties is generally the most difficult thing.”

Before co-founding DoubleLine, Philip Barach was co-founder and group managing director at TCW Mortgage Group of Los Angeles, where he spent about 23 years. He had prior stints at Sun Life and Calpers. Jonathan Barach previously worked in Barclays’ commercial-mortgage division, and earlier had a stint as an associate at FTI Consulting of Washington.