We recently spoke with Troy Marcus, Founder of Evergen Equity, to learn how their unique approach to investing and raising capital helped them become one of our Top Fundraisers of 2022.
Austin-based Evergen Equity is focused on managing multigenerational private real estate investments for family offices across the southern United States. As one of our 2022 Top Fundraisers, Evergen Equity and similarly sized firms used Juniper Square’s Digital Subscriptions to raise 127% more capital than their peers. We sat down with CEO and Founder Troy Marcus to talk about how the firm came to be and how it got to where it is today.
Q: How did you get your start in real estate?
A: I bought my first real estate deal, a $230,000 building, out of my freshman-year dorm room with three buddies. Then the Great Recession hit, so we dealt with that while still in college. It was an incredible learning opportunity, and we made it out strong—the partnership is still active 17 years later.
Q: How did those early lessons contribute to Evergen’s long-term success?
A: First and foremost—what we preach at Evergen daily—is that we capitalize conservatively and operate aggressively. We use a responsible amount of leverage that is always fixed-rate and relatively long-term. We were fortunate during the recession; we never had an asset that we had to give back to the bank because we always had some room to run with our fixed-rate loans.
But the more significant part is to operate aggressively. Buying real estate is easy—anyone with some capital can do it. What you do with it once you own it is what differentiates you. We think about how to be the best landlord to our tenants, the best owner to our communities, and the best neighbor to local property owners or constituents. And then, from an expense standpoint, we say, how can we optimize? Those were all lessons ingrained in me from 2008.
Q: What is Evergen’s investing philosophy?
A: We serve ultra-high-net-worth family offices as their third-party real estate team. They’re looking to invest in real estate for an extended period—decades or even generations. These families appreciate the long-term nature of real estate ownership, both for the ability to compound their investment and support the communities in which they invest. So, we're a little bit different of a real estate owner in that way.
Where most landlords might simply try just to appease their neighbors, we collaborate with them. We’re very thoughtful in identifying the neighborhoods, submarkets, or cities that we want to be in, and then we try to help elevate them. As for property type, we buy apartment complexes, office buildings, retail assets, land, and industrial properties.
Q: What are some of the markets you’re investing in?
A: We love Salt Lake City, for instance. It’s an exciting market for several reasons. It’s very pro-business—there have been significant migrations there by companies from the West Coast. The employee base is exceptional—Salt Lake City contains the state capitol and the state’s flagship university. And it’s a very thoughtful city in terms of how the urban planners laid out the streets, built the new airport, etc. Markets like that get me really excited. Our hometown of Austin is pretty special too!
Q: Why do you think 2022 was such a successful capital-raising year for Evergen?
A: We were very fortunate to come out with a value proposition that wasn’t available in the southern United States. Even we didn't realize how deep the addressable market was, so we were in the right place at the right time. And from there, it was all about leaning on friends of the firm to help elevate us and put us in front of groups. We have never made an outbound call for capital—it's all been word of mouth. That’s been really special and we don’t it take lightly; we know we’re delivering value when the families we serve introduce us to new families.
Q: What is Evergen’s biggest priority for 2023?
A: Our motto for this year is, “Protect first, grow second.” Last year, we invested in real estate; this year, we will continue to invest in our team. I’m excited to add more team members, but supporting our existing ones is even more important than that. Particularly now, as people are still getting their bearings after the shake-up of COVID and have a lot of angst around another potential recession, employees need to know that their jobs are safe and that we're supporting them mentally, physically, and emotionally—as humans first.
Q: What is your approach to capital-raising this year?
A: I think I’m a bit more bearish than many in this industry, and in my opinion, this recession will be deeper and longer than what the market seems to believe. At the end of the day, we are maniacally focused on operations. If there's an opportunity in which that focus can lead to enough value, we don't worry about our ability to raise the capital for a good deal.
We’re focused on optimizing our existing portfolio, but if exciting opportunities arise, we'll give it our best like always. The way our business is built, we don't have to do a deal this year or next, so we will remain patient and wait for the right pitch.
Q: How has Juniper Square helped Evergen succeed?
A: Transparency is huge for us. When we have an offering to share with a family we serve, we don’t say, “Here’s a 10-page deck; let us know by Friday if you’re in or out.” With Juniper Square, we can send a link to the data room where potential investors can see absolutely everything we have in our possession about the offering—Excel models, surveys, loan terms sheets, contracts; you name it. We couldn’t put that much information in front of our partners without Juniper Square. And it also serves as an incredible data trove going forward. They can go back into the portal a year later for a holistic view of their account and compare performance, models, documentation, etc. It gives us a competitive advantage.
Q: What advice would you give to aspiring real estate entrepreneurs?
A: I've never heard an entrepreneur say, “I wish I would've waited longer before jumping out to do my own thing.” Do it now or do it yesterday, but don't do it tomorrow. You'll be pleasantly surprised at what a supportive entrepreneurial community you can find. And lastly, more important than any investment you can make in a building or a piece of land is your investment in yourself and your investment in your partners, whether they’re above you, below you, or equal to you. To me, nothing else matters if you get that part wrong.