BLDUP Spotlight: Brad Cangiamila, Founder & Principal Crest City Capital 05/29/22
The BLDUP Spotlight is a weekly feature where readers get insights on developments around the city and get to know local industry experts. For this week’s Spotlight, we are featuring a trailblazing developer whose company is approaching an inflection point of substantial growth and who is on the verge of quickly becoming a major player in the real estate industry: Crest City Capital Founder & Principal Brad Cangiamila.
Crest City Capital is a boutique private equity and real estate development firm headquartered in Boston, with local presence throughout the East Coast and in the Carolinas. Since launching in 2016, Crest City Capital has experienced tremendous growth under Brad’s leadership, from one project acquired at $1.8MM to more than 110 projects and over $136MM in acquisitions. Brad sat down with us to fill us in on his strategy, growth, and ultimate goal of exceeding investor expectations.
BLDUP: What is the latest book you’ve read that you would recommend as a "must-read" to the RE community? Why did you find this book so important?
Brad Cangiamila: Multifamily Millions by David Lindahl. When I launched the company in 2016, it specialized in residential projects, mostly single-family homes and condos in the Boston suburbs and surrounding areas like East Boston, Dorchester, Brookline, Back Bay, Jamaica Plain, South Boston and Somerville. After reading the book and attending some of David’s related seminars, I knew even more that I was on the right path and was inspired to evolve even further and to explore various asset classes, driving my aspirations into action.
The book highlights a strategy that resonated with me: focus on 100+ unit multifamily buildings with an opportunity to pursue a value-add strategy.
Now a team of 6, we apply this approach to our entire portfolio, seizing the opportunity to update multifamily properties with valuable amenities and reimagined and refreshed the common areas. This positions our properties to command market level rents. Property values increase alongside rental value, offering significant returns to our investors.
BLDUP: What’s your routine and how does it contribute to your success?
Brad Cangiamila: Time is the most valuable thing in the world and there are many things you can do in a day. While balancing work and the joys of making time for family and friends, everything can seem urgent.
My approach to managing it all is to compartmentalize my work into two major buckets: core and growth.
I typically start my days focusing on the core of the business: acquisitions/what needs to happen to get deals done/to deliver and communicate to our valued tenants and investors. During the second half of the day, I tend to shift my focus into growing the business and marketing: refining our CRM tools, expanding our network, building relationships, company culture, and key learnings to apply going forward.
I’m a firm believer that the road to success also involves striving for constant personal growth, and incorporating time for fitness, overall wellness, and enjoyment is a huge part of that.
BLDUP: What was the biggest challenge you faced when you went full-time with the firm in 2017?
Brad Cangiamila: Taking a leap of faith and leaving my career to start what is now Crest City Capital. I forfeited my salary, and all the perks and benefits that come with working for an established company. I made the decision during an exciting time in my life and quit my job to build this just one week after my first son was born. Success was my only option.
I had dabbled in real estate for about two years prior to going full time in September 2017 while working at a medical device company and was at a point where I had nurtured key relationships to make this my full-time endeavor. I had strong relationships with investors, builders, attorneys, accountants, agents, banks, and others that all helped me make this firm successful. Finding and growing the right team of partners to work with has been key to our exponential growth at what is now Crest City Capital. We look at all relationships with a long-term view.
BLDUP: The COVID-19 pandemic brought on a unique set of challenges -- how has that affected your business. Do you expect to see long-term effects on your projects?
Brad Cangiamila: As construction came to a halt during the pandemic, we were quick to adapt and employ the right protocols so we could safely resume construction. While we remedied that, we also recognized opportunities that arose during the pandemic and were able to acquire projects that were underway where the developer needed to liquidate. We remained financially conservative with our cash reserves while focusing on the long term, taking on additional projects and exceeding our growth plans.
In early 2020, we identified the trend of increased market demand in the suburbs and vacation homes; we successfully pivoted to accommodate that. While projects within the city have historically gone well for us, a core area of our business now is also the suburbs, areas including Newton and Wellesley. We were also fortunate to capitalize on a development opportunity in Nantucket. We believe this trend will continue for the foreseeable future as we are in the midst of a serious housing shortage, not just in the Boston area but across the nation.
BLDUP: What are the biggest challenges facing the RE industry today?
Brad Cangiamila: There are always hurdles but it depends on how you approach them, and we pride ourselves on being adaptable and solving problems efficiently as challenges arise. Reflecting on today’s market, we see two main hurdles that may persist for some time. 1. Material delays are still prevalent and 2. the local regulatory environment has changed. Fortunately, we have navigated through most material delays by dealing in volume, being proactive, and planning. Regulatory processes around permitting in the local market tend to increase the timeframes on certain projects, but we are well positioned to work through this.
Rising interest rates are also affecting the market right now, but we have proactively shifted our investors’ capital into longer-term multifamily properties as we acquire them in emerging markets with much success. We remain focused on growing the multifamily segment of our portfolio while eyeing other opportunities that align with our vision, values, and commitment to the investors we work with and within the communities in which we work. Multifamily investing traditionally works well in a growing economy and drives returns for our investors in a down economy.
BLDUP: What upcoming projects are you most excited about? What does your recent growth look like?
Brad Cangiamila: Our recent acquisition, Pine Ridge, a 60-unit apartment complex in Cary, North Carolina. Cary is under a 20-minute drive from Raleigh, a booming metropolitan area that continues to experience population and job growth, driven by companies like Apple that are moving in.
We surpassed our goals last year and are on track to do it again. Throughout 2021, we added more than 230 units to the multifamily segment of our portfolio, and this year, we are positioned to double that number. The company is hyper-focused on opportunities in areas that exhibit above average job and population growth, and that are home to educational institutions that drive employment in tech, research, and development.
Crest City Capital recently expanded its portfolio in the Carolinas with the acquisition of The Land Bank Lofts, a 113 unit apartment complex, for $17.45MM. This strategic acquisition exemplifies the company’s focus on markets that exhibit population and employment growth.
BLDUP: What other types of projects are you looking for right now?
Brad Cangiamila: We are currently looking for additional multifamily acquisitions in emerging markets, with strong job growth and population growth. We are also open to opportunities in other asset classes beyond residential real estate. We’re not ruling anything out.
BLDUP: Who’s your mentor? What are the most valuable lessons you have learned from that person?
Brad Cangiamila: My father is a great mentor to me - he also started and scaled his own real estate business. He taught me the value of looking at a project through a conservative lens, imagining and preparing for a worst-case scenario, as well as the value of listening and being transparent.
He has always had a plan B for each of his projects in case plans did not shape up as he initially intended and prided himself on straightforward communication. At Crest City Capital, we apply that approach and tend to size up projects conservatively, a process that has contributed to our successful track record and positioned us to exceed our investors’ expectations. These lessons are at the core of everything we do and translate into our company culture at Crest City Capital.
BLDUP: What does the future hold for Crest City Capital in the next 30 years? What legacy do you want to leave?
Brad Cangiamila: Our goal is to continue to grow our portfolio and to create generational wealth for our investors. For many of our investors, these past six years of investing with us has bought them a few steps closer to financial freedom. That has been rewarding for me, and something the team wants to continue to perpetuate. We currently have a portfolio that spans four states -MA, NC, SC, and FL. In 30 years, Crest City Capital will have a broader portfolio of assets across the East Coast and beyond and be a recognized private equity and real estate firm.
BLDUP: What is a quote that you live by?
Brad Cangiamila: As said by sports legend Michael Jordan and true of basketball and business, “Talent wins games, but teamwork and intelligence win championships.”
Crest City Capital is a boutique private equity and real estate development firm headquartered in Boston. Since its inception in the Summer of 2016, the firm has completed 189 transactions with a 99% close rate, yielding over $132 million in real estate transactions. Our loyalty to our customers has always been the driving force behind our business. It’s a personal commitment that has earned us an established reputation for unwavering attention to detail, responsive communication, and a reliable track record of delivering high-quality residential developments, returns, and experiences. We push ourselves to continually stay ahead of market trends and pursue innovative solutions that will best serve the interests of our customers, and our business, for years to come.Crest City Capital >>