Summary

• Thomas Mueller-Borja manages $25 billion in value-add real estate assets at BlackRock, which manages approximately $13.5 trillion in total assets.
• The BlackRock real estate investment committee utilizes anonymous voting and assigns a specific "challenger" role to play devil's advocate to prevent groupthink and bias.
• Real estate cap rates are correlated to real rates and term premiums, meaning they are sensitive to the back end of the yield curve rather than just central bank policy rates.
• High levels of sovereign debt in developed nations may cause the yield curve to steepen even if central banks cut rates, preventing cap rates from compressing.
• From a relative value perspective, the team favors real estate markets in countries with lower debt-to-GDP ratios, specifically highlighting Sweden and Germany.
• The fund expresses caution regarding real estate in jurisdictions with high fiscal deficits, such as France and the UK, due to the potential for higher term premiums.
• Successful capital raising involves a structured funnel approach, requiring contact with approximately 200 prospects to secure 40 investors.
• The discussion contrasts the culture of the Berkshire Hathaway annual meeting, which focuses on values and long-term alignment, with other industry conferences focused primarily on deal-making.
• Mueller-Borja emphasizes that temperament, emotional intelligence (EQ), and the ability to self-regulate are as critical as IQ for investment success.