#334.- Chris Powers & Jason Baxter - Fort Capital's 2023 Year in Review
Feb 1, 2024
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Chris Powers and Jason Baxter reflect on Fort Capital's 2023 achievements, fundraising goals, custom AI development, deal pipelines, profitability, team growth, and the outlook for 2024. They discuss the successful implementation of document AI in improving the invoice process, the renewal rockstar initiative to boost tenant renewals, and the adoption of company-wide AI challenge. They also cover their acquisition pipeline in 2023, expansion of the team and opening new offices, and the challenges in finding affordable land and meeting construction costs.
The importance of attracting new investors and building a strong network for efficient growth in the ongoing fundraise.
The value of leveraging AI to improve operational efficiency, automate processes, and increase productivity.
The significance of structured meeting processes integrated with AI technology for consistency, alignment, and better decision-making.
Deep dives
Fundraising and investor partnerships
The podcast episode discusses the company's ongoing fundraise and the importance of attracting new investors who can write larger checks. They highlight the value of building a strong network of partners and how it has been a defining part of the company's growth. Additionally, they emphasize the need to shift from a one-off syndication model to a fund type structure, allowing for pre-committed capital and more efficient growth.
Improving operational processes with AI
The podcast highlights the company's focus on leveraging AI to improve operational efficiency. They discuss specific examples, such as using AI to automate invoice processing, reducing manual data entry and streamlining the workflow. They also mention the use of AI in areas like lease abstracts, legal document processing, and tracking progress on acquisitions. Overall, the implementation of AI is seen as a valuable tool for increasing productivity and effectiveness.
Structured meeting processes and AI integration
The podcast delves into the importance of having structured meeting processes within the company. They explain how their specific meeting structure not only fosters consistency and alignment, but also integrates AI technology. The AI captures meeting notes, tracks progress on projects and objectives, and provides valuable summaries and insights. This integration allows for increased efficiency, better decision-making, and easier tracking of goals and outcomes.
Strategic approach to slow market conditions
The podcast highlights the company's strategic decision to slow down deal activity in response to market conditions. They discuss the benefits of focusing on improving operational processes instead of pursuing numerous deals during a slow year. This pause allowed them to enhance their operations, refine their systems, and prepare for future growth. The approach showcases a long-term vision and a commitment to maintaining high standards.
Identifying Real Estate Opportunities
The podcast discusses the process of identifying real estate opportunities that align with the investment thesis and return requirements. By analyzing portfolios and using mapping technology, the team identifies groupings of buildings that may have common ownership and are potential investment targets. This approach allows them to find opportunities that others may not see, targeting deals in the range of 15 to 50 million dollars.
Dynamic Interest Rate Stress Testing
The podcast explores the concept of dynamic interest rate stress testing and its application in forecasting and underwriting real estate investments. By updating forecasting models in real-time and considering factors such as the Ford yield curve, lease impacts, and debt service, the team can proactively plan for potential interest rate fluctuations and ensure the performance of assets. This dynamic approach allows them to make informed decisions based on the changing market conditions.
In this conversation, I sit down with my partner and Fort Capital CEO Jason Baxter to talk about our current fundraise, company wins, building out Fort’s custom AI, deal pipelines, profitability, how the team has grown, and an outlook for 2024.
