I’m having a great time here. As the Chief Investment Officer at PEG Companies, investment strategy is constantly on my mind. I’m continually trying to align market conditions with PEG strengths and determine, with the help of the other executives and management, what PEG should develop and invest in and where. Over time, our small little company has turned into a small big company with lofty goals, ambitions, and many successes. We’re extremely excited with where we are headed.
What is PEG’s current investment strategy?
PEG is an urban-infill and suburban-core multifamily and hospitality developer who will also dabble in opportunistic development and acquisition opportunities that, in some form or fashion, complement our multifamily and hospitality focus. What does that mean? Basically, we like to develop and acquire apartments and hotels the most (specifically in the aforementioned location types–which will be discussed below), but we could also develop or acquire other asset classes, although less focus is given to these. It’s just that we’ve done so many hotel and apartment projects that we can almost do them with our eyes closed (Okay, not really. Nothing we do at PEG is easy.)!
What is “suburban-core,” anyway?
“Suburban-core” is defined by me as a suburban location where energy nodes and activity exist. Think of locations in suburbia where we find people, activity, energy–malls/shopping areas, transit locations, universities, business parks, city centers, hospitals—all these areas are amenitized locations that provide value to any project or property that we don’t have to build! How great is that? Yes, we follow the three rules of real estate: location, location, location. Simple, yet effective.
How has PEG become a leader in urban-infill and suburban-core development?
PEG leadership has extensive experience working with…no…PARTNERING with cities and local municipalities in order to achieve government planning objectives. We never go into a city meeting seeking to push our agenda. We are always looking for win-win solutions to help add value to city images. Because of CEO Cameron Gunter’s hard work, no nonsense, yet humble and compatible company work ethos, coupled with his history of working as a top-level city executive in multiple cities, PEG is able to quickly ascertain city needs and is able to perform accordingly. Oftentimes, our projects will not work unless we have some sort of partnership financing or funding from local municipalities. We love these situations because it allows everyone (city partners and PEG team members) to take responsibility for successful developments and enjoy, more fully, the grand opening ceremonies!
What are the biggest challenges associated with this type of strategy?
Urban-infill and suburban-core (which I sometimes label “suburban urban”) properties are challenging to assemble, entitle, and design. Every square foot of each property is accounted for, analyzed, and maximized. Challenges include setbacks, step-backs, easements, height restrictions, access issues, etc. There is never an easy property or project that PEG deals with, to the chagrin of our internal development managers! That’s why we try to hire the best people we can. Creativity is key. We are always seeking creative, entrepreneurial, smart, humble, and passionate people to join our team at PEG. These types of properties are not for the feeble-minded and weak-hearted. Every development manager at PEG can tell you of times they’ve had to think WAY outside the box to accomplish tasks, but this allows for a massive barrier-to-entry that provides our developments greater surety of success. If you look at practically every project in the PEG pipeline, you will see a project that capital likes—projects that, hopefully, and if developed correctly, can weather the storms of economic challenges.
So, where is PEG developing?
Someone might ask, “Where is PEG looking for projects?” My answer is simple: areas of progress and opportunity—where the energy is. According to a recent Wells Fargo market report, Utah had the strongest year-over-year employment growth rate of all 50 states! Arizona and Idaho were not too far behind. In fact, seven of the top nine states are states in which PEG either has projects or is actively pursuing projects.
I’m having a lot of fun here at PEG. We love our investors and our projects. We try our hardest to please. We’re not perfect, but we’re trying each day to be better than the previous.