Branko Kuzmanovic is the Director of Acquisitions for Next Realty. In that role he is responsible for underwriting new acquisition opportunities and conducting due diligence. He joined the firm in October 2017.
Before he joined Next Realty, Branko worked at Home Partners of America, a privately-held real estate investment trust. While there he worked on raising both private equity capital and public and private debt. Earlier in his career, Branko worked in Ernst & Young’s Transaction Real Estate practice where he specialized in transaction-based advisory services including: real estate valuation, market and feasibility studies, and transaction due diligence. In this role, Branko provided advisory services for over $2 billion of commercial and residential real estate globally.
Branko earned a Finance degree from Purdue University.
We asked Branko a series of questions on the topic of the Next Value-Keep® investment strategy. Read on for his responses.
Q. What are the greatest opportunities and advantages of the Next Value-Keep® investment strategy?
A. One of the greatest opportunities of our value-keep strategy is that the assets in most cases experience less fluctuation in vacancy rates and rents in a declining economy due to the numerous demand drivers and dense population in the surrounding area.
Q. What are the greatest challenges of the Next Value-Keep® investment strategy?
A. One of the greatest challenges of our value-keep strategy is assessing the credit of tenants. With technology changing the way we live, work and play, and simultaneously the way we use real estate, traditional “credit tenants” are experiencing rapidly changing business environments. Given this, assessing the likelihood that a tenant will pay rent and do well in the given location is more difficult which can make it more challenging to effectively assess the risk-reward opportunity.
Q. In today’s investment climate, how easy is it to find properties that fit the Next Value-Keep® profile?
A. Finding value-keep investments is a challenging task for all real estate investors. The entire real estate environment is in a period of change. Office leases are becoming shorter and more flexible, while retail is being forced to transition (e.g. traditional malls becoming experiential centers) and industrial buildings continue to require advancements in technology and robotics. Finding assets with long-term stabilized cash flow, limited rollover exposure and market appreciation potential is becoming harder than ever.
Q. Are Next Value-Keep® properties any more or less intensive to manage, aside from any capital improvement programs that need to be completed?
A. Value-keep properties are becoming more and more intensive to manage. With ever changing trends in technology and consumer preferences, real estate owners must continuously evolve and focus on the operational side of real estate by providing a unique experience every time someone visits their property whether it be retail, industrial or office and make sure tenants are satisfied and renew their leases.