We’re introducing a new series to highlight some of the amazing team members that make Yieldstreet possible. Up first is Mitch Rosen, Managing Director, Head of Real Estate. He discusses how his career has shaped how he views investments, and where he hopes Yieldstreet ends up in the next few years.
What do you do at Yieldstreet?
I head the Real Estate division at Yieldstreet, meaning that I lead the team looking into originations and doing the proper due diligence on all of the opportunities offered on Yieldstreet in the real estate space. I also do webinars from time to time to help explain what I love about certain investment opportunities.
How did you get started in the commercial real estate space?
I got started in 2001 in the real estate space at a publicly-traded mortgage REIT called Capital Trust. The company specifically focused on subordinate debt on CRE assets of all types. I learned how to critically look at CRE and more importantly, how to think creatively about ways to structure these investments to insulate our position from problems arising. The company was co-founded by Sam Zell, who also served as the chairman of the company. I did not have much contact with him but it was always an interesting day in the office when he would come in.
I worked at Capital Trust from October 2001 through May 2004. I then joined an alternative asset management firm called Marathon Asset Management. I spent close to nine years there. The first five of them were focused on the underwriting of the bridge loan space. I had two great mentors who ran the group. I learned a great deal from both of them and we still keep in touch to this day. After the GFC in 2008, I began to spend more of my time on the securities side, mostly CMBS, CRE CDO’s, and subordinate debt opportunities. I left Marathon in February 2013 and joined another alternative asset management firm called Brigade Capital. Brigade, which at the time had around $15B of AUM, is best known as a high-yield corporate credit and distressed shop. I was hired to be the lead credit analyst and trader for the CMBS and CRE debt business. I thoroughly enjoyed my time at Brigade and they have a great team of people over there. I spent 5.5 years there and left in the summer 2018.
I met Milind and Michael in July 2018, and they brought me on to run the Real Estate Business. I was the first dedicated investment head to join the company. Having spent close to 20 years on the traditional buy-side, I was certainly cautious about joining a financial technology company that was looking to change the way retail investors allocate capital. I accepted my offer and started in October 2018.
What was your biggest learning experience, and has it shaped how you approach investing?
Going through the 2008 crash early in my career gave me tremendous insight into when things go bad, what does it look like and how do you solve the problems. We had a fairly large portfolio, over $2 billion of real estate loans and securities, that all had distress. That meant we had to work through them, take our lumps, pivot where we could, and take back anything that we couldn’t work out of. The problem was that our borrowers weren’t just getting hit on what they had with us, but every property they owed in some capacity was impacted. Having gone through that dislocation and then coming out on the back of that and making a lot of money by buying distressed bonds and other assets that were attractively priced was frankly invaluable.
What’s the future of real estate investing? How does real estate investing evolve from your seat specifically, not just tied to Yieldstreet but in market terms?
The future is tied to Yieldstreet though, to be frank. I think that the ongoing acceptance of retail crowd raising capital for real estate is going to only continue to flourish. Certainly there are going to be investors who pick the wrong deal or the wrong partner, but the key is diversification. As I see it, crowd platform investing for CRE is going to be the most accepted and earliest adopted retail segment for investing, and I’m of the opinion that even institutional companies and managers, who historically shied away from it, will start to embrace and partake in it. And my guess is that we’re in the third inning of that — there’s a whole runway for the field to evolve.
What happens with the disruption to the incumbents? When the big players are reduced in size, what impact does that have?
It sounds cliche, but that disruption is providing access to investors that historically would not have access to these types of opportunities. Typically, these managers had friends and family capital they would crowdfund with: They found a deal, put it under contract, and would call their 100 buddies to say, ‘I’m doing this deal, I’m looking to raise $5 million.’ And they’d come and collect $20K-$25K checks, they’d raise the money, close, and the deal is off to the races. It’s the same process. Technology has just made it far more efficient, quicker, and through a better interface. And so when we talk about “crowdraising” … it’s been done for 40 years but what Yieldstreet has done is formulated a more efficient and transparent process.
How is Yieldstreet unique in that crowdfunding space?
We’re providing multi asset class access which no one else really has and we’ve historically focused on debt — though we are starting to ramp up the equity business. That was partly why we were more known within the Commercial Real Estate space in particular — we’re trying to offer not just access, but good access. We spend a lot of time thinking about who we play with, invest with, how we think, and are looking to ensure added protection is what Yieldstreet brings to the crowdfunding space.
Where do you find yourself at 7pm on a Friday?
Usually I’m at home with my family having Friday dinner! I love being together after a long week, just sitting down and connecting with them. I’m getting to bed pretty early on Fridays as I’m just exhausted from a long week.
And then do you have fun weekend activities planned?
My kids are in sports — so my little guy plays soccer, my daughter plays lacrosse. My oldest daughter just turned 13 so that is a whole different story there. She is with her friends a lot and I try to give her the space she desires. I will definitely go for a run and likely BBQ.
Where do you see yourself when you are able to retire and generate passive income for yourself?
I’d like to be my own owner of real estate, of assets that can generate passive income and enable me to do other things that I don’t have the free time for currently. That’s the dream for a lot of people, and it’s one that we should all be thinking about — we’re living longer, thank god — but there are implications of what that means. It’s about setting small goals and putting a little bit aside every day…I saved up for many years before having a downpayment for my house.
Yieldstreet provides access to alternative investments previously reserved only for institutions and the ultra-wealthy. Our mission is to help millions of people generate $3 billion of income outside the traditional public markets by 2025. We are committed to making financial products more inclusive by creating a modern investment portfolio.