Breneman Blueprint: Real Estate and Entrepreneurship Podcast · Drew Breneman

Build Investor Relationships that Fund Real Estate Deals | Andrew Dunn of VAC Development - E103

·58 min·3 clips

Single-net retail volumes collapsed from $11B to $1B in three years—lowest in 14 years.

This episode features host Drew Breneman and repeat guest Andrew Dunn, a commercial real estate developer and dealmaker at VAC Development. They dissect the challenging current environment for raising equity and securing debt for commercial real estate deals. Dunn explains his firm now focuses on properties with a signed lease in hand to secure bank financing, a shift from buying vacant assets. He emphasizes the critical need for "neutral positive leverage" in year one, meaning the property's net operating income must cover debt payments from the start. Transaction volume has plummeted, with Dunn citing a drop in single-net-lease retail deals from $11 billion to just over $1 billion in three years. He details securing a $26 million loan at only 58% loan-to-cost for a Reno warehouse, a stark contrast to the 70-75% leverage available in 2021. The conversation contrasts today's market with the post-2008 era, where Breneman bought at 9% cap rates while borrowing at 6%. Dunn reveals that equity providers now scrutinize exit cap rates aggressively, often demanding models that forecast further cap rate *expansion*. He argues that so-called "off-market" deals are often the worst today, as they may be overpriced assets brokers refused to list or are being sold by distressed, discreet owners. Dunn attended the IMN Distressed Asset Forum, where a key takeaway was that everyone is chasing "distress" but no one can agree on its definition. He identifies inline shop retail as a current "hottest ticket" for yield-seeking capital. A surprising insight is that even Blackstone's fundraising for distressed real estate fell from $2.5 billion in Q1 2023 to about $230 million in Q1 2024. Dunn states the entire institutional equity raising process is now a "matchmaking game," where operators must reverse-engineer deals to fit specific equity funds' remaining allocations. His strategy involves targeting smaller funds writing $3-10 million checks and operators with teams under ten people for better access. He advocates attending high-end conferences like the IMN Private Equity Family Office Forum, where a $1,000 entry fee acts as a filter for serious players. Dunn shares that active social media posting on LinkedIn and X led to a direct capital inquiry from an investor with $9 million to deploy immediately. He warns that equity brokers are rare compared to debt brokers because raising equity is a complex "dating and marriage process." The tone is a direct, insider conversation between two seasoned operators trading war stories and tactical advice. It's educational but grounded in the gritty realities of today's capital markets, not theoretical concepts. Active commercial real estate operators and developers struggling to fund deals will find this episode packed with actionable intelligence. Passive investors will gain crucial insight into how sponsors are navigating the current capital crunch. Listeners seeking beginner-friendly, motivational content or those uninterested in the technicalities of debt leverage and equity fundraising should skip this deep dive.

As heard by us

A candid look at how real estate capital gets raised when the market tightens.

Andrew Dunn and Drew Brenneman use the episode to map how real estate capital gets raised when conditions are less forgiving. It works best as a mechanics-first discussion, with attention on reserve levels, cash discipline, investor questions, and why the action tends to cluster…

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Why you'd press play

Hear how real estate capital gets raised when investors are getting more selective.

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