Podcast Episode Summary

Capital Allocators: Inside the Institutional Investment Industry

Episode 475: Robert Boucai & James Broyer – Tax-Efficient Multifamily Real Estate at Newbrook
Host: Ted Seides
Guests: Robert Boucai (Newbrook Capital Advisors, Newbrook Capital Properties), James Broyer (Newbrook Capital Properties)
Date: December 4, 2025

Episode Overview

This episode centers on how Robert Boucai and James Broyer built Newbrook Capital Properties, a platform for tax-efficient, long-duration multifamily real estate investing. Drawing from decades in hedge funds and institutional real estate, Boucai and Broyer share why they structured Newbrook to provide stable, tax-advantaged retirement income for taxable investors—contrasting with short-horizon, floating-rate, institutional models. Their discussion spans their professional backgrounds, strategy rationale, market selection, asset improvement, risk management, portfolio scaling, and the nuances of aligning incentives in real estate investing.

Key Discussion Points and Insights

1. Robert Boucai’s Investing Journey

Background and Motivations

• Growing up as a math- and story-loving son of Lebanese immigrants in Boston, Boucai’s interest in business started early.
• "When I saw Wharton in the summer of 1992, I said, this is really where I want to go to school. I applied early. I got in. I was thrilled...I majored in real estate [and] finance." (03:01)
• Garnered early experience at Blackstone in real estate private equity, then brief exposure to venture capital before moving to hedge funds.
• Founded Newbrook Capital Advisors in 2006, applying best practices from both public and private investing.
• Key takeaway: Stay alert to cycles and opportunities across markets, and learn from each asset class' characteristics.
  • “It's always to keep your eyes open for opportunity, to be aware of what's changing in the equation where we are in a cycle...” (06:43)

2. Evolution from Hedge Funds Back to Private Real Estate

Personal Returns & Structural Frustrations

• Boucai’s best after-tax returns were from his passive investments in real estate, due to depreciation and tax sheltering, rather than liquid strategies.
• Existing general partnerships (GPs) didn't match his requirements: lack of long-term holds, fixed-rate financing, and strong GP capital alignment.
• “If you care about taxes, the advantage of investing in real estate is that you’re getting this tax sheltered income stream. The only way to benefit from that is if you hold it for a long term... You can only finance it with fixed rate debt if you’re going to value that.” (10:05)

3. Strategy Rationale and Partnership Formation

Meeting James Broyer & Strategic Alignment

• Boucai searched for a like-minded partner, ultimately connecting with Broyer, whose approach at JRK aligned on targeting fixed-rate, long-term holds, and value investing in multifamily real estate.
• Majority of the industry preferred floating-rate debt for flexibility, but this did not optimize for tax-advantaged, durable returns.
• “95% of the people I met wanted to use floating rate financing…almost all opportunity funds in real estate will use floating rate financing...but we care about taxes.” (10:05)

4. James Broyer’s Background and Market Observations

Career Path & Market Evolution

• Broyer came up through pension consulting and investment banking before shifting to multifamily via Boston Capital, then JRK Property Holdings (rising to division president).
• Described the 2021–2022 multifamily landscape as overheated, with compressed cap rates, floating-rate debt prevalence, and non-traded REITs driving up prices.
• “We look to have about two thirds of our return come from cash flow. That is the best risk adjusted way for us…” (20:37)

5. Multifamily Sector Focus and Geographic Strategy

Why Multifamily?

• Most defensive/least controversial real estate segment—necessity-driven demand and consistent access to agency lending (Fannie/Freddie).
• “Multifamily, there’s no debate. People need a place to live. That’s the most important thing.” (17:32) — Boucai

Market Selection Process

• Focus on landlord-friendly (Midwest/Sunbelt) states; avoid states like California and New York due to regulation and tax risk.
• Detailed, data-driven deal flow—underwrite 100 deals/month, selecting only those that fit narrow risk and yield criteria.
• Seek low-supply markets for rent growth vs. chasing only headline population growth markets.

6. Acquisition, Renovation, and Value Creation

Deal Example: Suburban Charlotte, NC

• Acquired a 96.5% occupied property, 8% rent growth, no nearby new supply, at a 6% cap rate with 4% fixed-rate debt.
• “Today, we’ve had 13% rent growth in the past 16 months on that asset. And we’ve only renovated 20% of the community.” (24:17)

Renovation Approach

• Upfront capex: $12k–$20k per unit, targeting interiors (70%), and amenities (fitness, pools, landscaping) to drive leasing and retention.
• Aim: "We’re doing things to improve the quality of the tenant’s life…It’s important for us to provide a good experience for the residents because it pays for itself.” – Boucai (27:30)

7. Portfolio & Business Design

Diversification and Duration

• Emphasize geographic diversity within landlord-friendly jurisdictions and asset-level risk controls.

Exit Strategy

• “In a perfect world, selling during a compressed period...We underwrite [as if we’re] selling them in an environment similar to today, which is largely a buyer’s market.” (28:37)

Competitive Landscape

• Current environment less crowded due to others sidelined by floating-rate/fund structure stress or capital constraints.
• Advantages: Internal capital to close, rapid due diligence, outsized deposits, nimble approach to off-market and brokered deals.

8. Business Model and Investor Alignment

Deal-by-Deal vs. Fund Structures

• Chose deal-by-deal initially for investor flexibility, especially on tax elections (bonus depreciation, 1031 exchanges).
• “If you want to do [tax-advantaged real estate], you can’t just show up at 65 and do that. It takes years of planning… That’s how it became a business.” (33:29)

Communication

• Transparency and proactive reporting/communication are central for investor confidence and satisfaction.

9. Risks and Mitigants

Macro Risks

• Interest rates, replacement costs, population stagnation, and employment downturns.
• “If you have higher unemployment, it likely comes with lower interest rates, means the capitalization rates are lower and the value of the income stream is higher. There are offsets…” (40:01)

Micro Risks

• Insurance risk (catastrophic events, cost inflation), especially in areas like FL, TX.
• "Insurance is a big risk that we think about a lot." – Broyer (40:58)

10. Synergies with Public Markets

• Real estate and public equity teams share research, e.g., using sector wage increases to inform rent growth projections.
• "We spent some time trying to understand the outlook for the Norfolk, Virginia market… We realized the real estate market was not aware that the company was putting in place a 12% wage increase… It gave us more conviction in our projections for 3% rent growth." – Boucai (42:48)

Notable Quotes & Memorable Moments

• On Tax-Advantaged Income:
  “Assume you had $5 million in real estate paying 8% and you’re not paying tax on that… does that solve part of your problem for retirement that you’re trying to get some income stream…? The feedback… was, you’re totally right, I need to do that.” (33:29)

• On Contrarian Market Selection:
  "It’s not the Austins, the Dallas’s, the Tampas… performing the best if you look at the data. We care less about population growth…we’re solving for rent growth, which is totally different…” – Broyer (22:08)

• Metaphor for Competing Platforms:
  “The analogy I like to give is they’re selling seats on a 777 or Airbus 350. We’re selling seats on a Gulf stream. Our market is not as big...but more customized.” – Boucai (33:29)

• On Human Nature in Investing:
  “I wish I were more optimistic and believed in human ingenuity and the ability to persevere and solve problems.” (47:10)

Timestamps: Important Segments

• Robert’s Investing Background: 02:32–06:24
• Cycles and Opportunity Recognition: 06:24–07:39
• Hedge Fund Evolution & Real Estate Shift: 07:39–10:02
• Fixed-Rate Financing Rationale: 10:05–13:31
• James Broyer’s Career Path: 13:31–14:52
• Market Analysis & Purchase Approach: 20:29–24:17
• Sample Deal & Value-Creation: 24:17–27:45
• Diversification/Exit Strategies: 27:45–29:19
• Competitive Edge & Execution: 29:43–32:03
• Deal-by-Deal vs Fund Structures: 36:49–38:07
• 1031 Exchange Handling: 38:07–39:15
• Risk Assessment: 39:57–42:30
• Public-Private Investing Synergies: 42:48–44:32
• Vision for the Future: 44:32–45:03
• Rapid-Fire/Closing Questions: 45:34–47:21

Closing Quick-Fire Highlights

• First Paid Job?
  • "In sixth grade…I convinced my father to buy a John Deere lawnmower…Started a landscaping business…" – Broyer (45:42)
• Best Advice Received?
  • "Hire the best people you can afford…make a decision at the last possible moment to preserve optionality." – Boucai (46:01)
• Investment Pet Peeve?
  • "The groupthink…looking at only a handful of markets, these high population markets… We focus on low supply markets" – Broyer (46:16)
• Greatest Joy?
  • "I love winning…in investing in stocks and real estate. I love to be competitive and win." – Boucai (46:50)
• Life Lesson Wished Learned Earlier?
  • "I wish I were more optimistic and believed in human ingenuity and the ability to persevere and solve problems." – Boucai (47:10)

Summary

This episode provides a deeply practical guide to designing a tax-efficient, income-focused, multifamily real estate business attuned to the needs of high-earning taxable investors—distinct from most institutional offerings. Through candid discussion, Robert Boucai and James Broyer outline why fixed-rate debt, long-term holds, geographic discipline, and intensive property improvement offer both risk mitigation and attractive returns, while preserving valuable investor tax advantages. Both their backgrounds and their business reflect a contrarian, research-driven philosophy—one informed by personal investing needs that resonate with many affluent professionals seeking durable, tax-efficient portfolios for the era beyond peak career earnings.