It’s all about the partnerships

Could you tell our readers something about Kadens Capital?

Matthias Cordier, founding partner of Kadens Capital: Derek and I set up Kadens at the end of last year. We are a global real estate investment manager, even though we have mainly been active in Germany so far. We both came from Madison International, where I was for ten years and Derek for 17. At Kadens we’ve already invested around EUR 200 mln of equity capital in various markets. And this is a unique time to invest, given the stressed situation and dislocation in the market.

What is your strategy now? Has it changed recently due to the economic conditions and geo-political situation?

Derek Jacobson, founding partner of Kadens Capital: Our strategy hasn’t changed. We have always been looking to find interesting demographics and quality assets, and to invest with as well as in partners and management platforms. We provide the lion’s share of the funds for the investment and partner with teams with local expertise, the “sharp-shooters”, as we see them. We can help them to institutionalise, to achieve best-practice levels, and with debt and equity issues.

Do you have a particular approach for dealing with such disruption to the market?

MC: With the current “bumpiness” the market is going through, the alignment of interests with our partners should serve us both well. We invest in real estate but in many cases also in the platforms themselves that are active in the fields we are involved in. And we are very creative when it comes to aligning our interests with them. You need to be able to react nimbly and to have the capital to do this, as long as you are selective and conscientious when responding to changes in the market.

DJ: At the moment these include inflationary pressures and global instability, but despite this you can continue to find opportunities. And unlike other players, we are unburdened by any long-term legacy. Through no fault of their own, such players often have to look backwards at their portfolios and how to optimise them. Traditional deals, however, are now more difficult to do, which gives us an edge.

How active have you been in our region? What scale of activity do you expect to have here compared with Germany?

DJ: We have nothing imminent in Poland, but under Kadens’ flag we’ve been back to Warsaw half a dozen times already. It’s just a matter of finding the right micro-situation, the real estate opportunities that arise. So, it’s certainly not the market itself that has kept us away so far. But at Maddison, Matthias and I were involved several years ago in investing in Warsaw Spire with Ghelamco, as well as with a number of Capital Park’s Warsaw projects. We were also the lead team investing in Panattoni’s logistics platform.

MC: Our definitive first stop in the CEE region is always likely to be Poland. Maybe we are a bit more cautious about elsewhere in the region, in markets we are less familiar with. But the demographics in Poland in both the short and long terms remain interesting to us. There may have been the view that the conflict in Ukraine would affect not just the globe but particularly its neighbours. This put Poland in a challenging situation, but so far it has coped with it very well, confirming that it is a stable market.

What are your target classes and where do you see the main opportunities?

MC: There are a lot of opportunities in a lot of asset classes. Residential continues to be interesting in various markets, as well as speciality space – such as data centres. There continue to be opportunities in logistics and the speciality space in this sector – cold storage, last-mile. And these are the sectors we are mostly looking at these days.

How did you get into real estate investment?

DJ: I grew up in New York City and this is a place where people often talk about real estate of different kinds. I started out as an intern in various industries, but was always drawn back to the property sector. Working for German clients investing in real estate taught me the ropes and eventually I joined Madison. Being both American and German gave me the opportunity to travel the world and mix with a unique crowd, a very interesting group of people. Real estate is a people business – if you can deal with that and embrace it, you can forge a career in this sector.

MC: Growing up in an entrepreneurial family with my parents running a retail business across Germany, the operations side of things had always fascinated me. I started my career on the banking side in commercial real estate, lending across Europe and building my network early. Understanding your tenant and operator demands with a PropCo & OpCo strategy is critical in our business and we both just enjoy being with our JV partners, operators, tenants and advisors. Hence our motto: it’s all about the partnerships.

Will you be able to take a decent break this Christmas/New Year?

MC: Of course, this has been a very busy time for us as we work on growing the business. We are keen to get everything going, but we both also have young families. It’s important for us and the team to have a healthy balance in our personal lives and to spend a good amount of time with our families. It helps at both the personal and business level in the long run to have time for our families – and you can absolutely expect us to be taking time off to do that, maybe even all seven of us together.

Interview: Nathan North