Category : Additional Articles

From the Desk of Dr. Sangani

From the Desk of Dr. Sangani

Dr. Bharat SanganiAs I reflect on the past year, I’m struck by how even the smallest decisions can profoundly shape our future. The forces driving change today—AI, elections, geopolitics, medical advancements, inflation, and even wildfires—affect how we work, lead, and live our daily lives. For a CEO, every big decision is built on countless micro-decisions, each one laying the foundation for what comes next. In my roles as a business owner, physician, real estate developer, and mentor, I’ve seen how these choices come together—often in surprising ways.

What I want to share isn’t a polished success story. It’s a candid look at the realities of staying adaptable and seizing opportunities in a world where the goalposts are always shifting. Whether you’re an investor, entrepreneur, or simply curious about how big decisions take shape, this is a glimpse into the mindset it takes to keep moving forward.

Let me tell you—it’s a mix of opportunity, risk, and a constant flow of decisions, from tactical to transformational. Here are the weightiest topics that have been on my mind these past few months, in no particular order:

How Rising Rates are Shaping Commercial Real Estate
The commercial real estate sector has been pressed on multiple fronts. Interest rates remain elevated, limiting both the availability and affordability of credit. As a result, transaction volume has slowed across the board, with buyers and sellers often struggling to see eye-to-eye on asset valuations. Despite the reduced deal flow, underlying property values have held relatively steady—which speaks to the continued long-term appeal of quality assets. Still, these values are undermined by an increasingly illiquid market. Simply put, fewer transactions are taking place, and the ones that do make it over the finish line are often characterized by lengthy negotiations and conservative financing terms.

As a commercial real estate developer, navigating these conditions requires deliberate choices—choices about which assets to hold, how to structure financing, and where to direct resources. This year has served as a powerful reminder that when the waters get rough, your balance sheet becomes your lifeboat, and cash flow is your guiding compass. We may not be able to control whether interest rates rise or fall, but we can control our internal financial posture and the way we direct resources.

Cash Flow: Our Financial North Star
In an environment where credit is constrained and operating costs are on the rise, having healthy cash flow is more than just a financial metric—it’s the bedrock of adaptability and choice. One of the lessons I’ve learned through the last 25 years of navigating market cycles is that it’s not enough to simply track what comes in and goes out. I need to think strategically about vendor relationships, negotiate when possible, and maintain the right mix of debt so as not to hamper long-term growth.

I’m reminded of Warren Buffett’s insight: “Only when the tide goes out do you discover who’s been swimming naked.” In other words, when credit becomes expensive, those without a careful grip on their cash flow can find themselves exposed. I have no intention of being caught off-guard.

Building a Defensive Balance Sheet
If cash flow is the compass, then a defensive balance sheet is the sturdy hull of the ship. At my firm, Encore, we’ve spent years cultivating a stable foundation—one built on prudent leverage ratios, diversified revenue streams, and a careful eye on maturities. While we pride ourselves on making bold moves when opportunities arise, we do so with an eye toward defending what we’ve already built.

In practical terms in 2024 and through 2025, this means reevaluating debt maturities and ensuring we’re not caught by surprise if financing options tighten further. It’s no secret that rising rates translate into higher interest expenses for those with floating-rate debt, so we’ve been exploring opportunities to lock in fixed rates or refinance on favorable terms. The objective is simple: to stay several steps ahead of any potential storm, and to preserve the flexibility to act quickly if (and when) those strategic opportunities present themselves.

A Word on Healthcare Costs
Resilience doesn’t just apply to balance sheet; it applies to the well-being of employees, too. As a leader, one of my most pressing concerns is the rise in healthcare costs—a challenge that extends well beyond our own industry. Providing quality healthcare to my companies isn’t just an ethical imperative; it’s integral to sustaining a motivated, productive workforce, and deeply personal to me as a physician.

The question, then, is how to keep premiums and out-of-pocket expenses in check during a period of inflation. This challenge required a series of deliberate decisions. First, we focused on negotiating better terms with insurance providers wherever possible. Next, we accepted that, in some cases, the company would need to absorb a portion of the costs to shield employees from the full impact. Finally, we encouraged the use of generic medications, which offer the same efficacy as brand-name drugs but at a fraction of the price. Each of these choices played a role in managing rising expenses while maintaining a commitment to robust, accessible healthcare for our team.

Emerging Healthcare Solutions: GLP-1
The healthcare landscape is also on the cusp of significant transformation. One particularly exciting development is the rise of GLP-1 medications—drugs that have shown remarkable promise in treating diabetes, assisting with weight loss, and potentially reducing various metabolic risk factors. I believe we’re just beginning to grasp the broader implications these treatments may have across the healthcare ecosystem. From lowering long-term costs associated with chronic conditions to improving overall employee wellness, the opportunities are vast. It’s too early to predict all the downstream benefits, but I see a future where GLP-1s could revolutionize how we treat (and even prevent) some of the most common health challenges we face. The individual and business decisions that stem for this potential overhaul remain to be seen. But I am open, curious, and closely watching this space.

Looking Ahead
As I look toward 2025, I see a world that still holds a fair share of unpredictability—capital can suddenly become scarce and market sentiment can flip on a dime. No one can promise a smooth ride in this business, but I’ve also been at this for more than 25 years, so I know the key is carefully considered incremental decisions. For my business that means focusing on maintaining a strong cash position, a defensive balance sheet, and healthy happy employees.

The thoughts I’ve shared here aren’t about perfection or a guaranteed path to success. It’s about embracing adaptability, remaining open to innovation, and recognizing that progress often comes one decision at a time. Thank you for joining me in this reflection—and for being part of a shared pursuit of progress, resilience, and success.

Wishing you and your families a prosperous new year.
With gratitude,
Dr. Bharat Sangani

Capital Calls Make Everyone Sick

Capital Calls Make Everyone Sick

Dr. Bharat Sangani-img

As a physician and real estate investor, I’ve found that the problem-solving strategies of medicine—diagnosis, treatment planning, and patient care—translate well to commercial real estate. Both fields demand a deep understanding of complex systems, careful risk assessment, and a focus on long-term outcomes over short-term gains. Given the current turbulence in the market, I believe it’s only fitting to take a clinical approach. So, what’s my diagnosis of the market, and what’s the treatment plan for navigating these challenges?

What’s my Diagnosis on Capital Calls: Lifeline or Liability?
As someone who’s been in the trenches of the commercial real estate sector for decades, I’ve seen firsthand how quickly market sentiment can shift. But the current environment has been particularly challenging, with a perfect storm of historically high interest rates and loan maturities—aftereffects of the pandemic’s easy money.

From a global standpoint, $1.5 trillion in commercial real estate loans will need refinancing within the next 18 months. Within the United States, the Federal Reserve has finally begun the long-anticipated rate cuts this September. However, it’s worth keeping in mind that rates are still three times higher than the average between 2009 and 2019.[1]

What’s striking—and deeply concerning—is how many firms are responding to these pressures by passing the buck onto their investors. The buzz among industry professionals paints a picture that you won’t find in many headlines: investors are being squeezed and it’s bringing morale down.

This isn’t just an anecdotal observation. While publicly available data might be thin—these are, after all, privately held funds—the reality is that many firms are struggling to maintain their footing. Defaults are rising, and to shore up their balance sheets, many real estate sponsors are resorting to unplanned capital calls.

Overall, this may not be a significant hurdle for institutional capital, whose participants are more likely to have reserves in place to handle these requests. However, these demands are placing significant stress on high-net-worth investors, who are already navigating a complex economic environment themselves.

Stop the Bleeding
As chairman of Encore Enterprises, a private equity firm and commercial real estate sponsor, our Board has made the strategic decision to avoid issuing capital calls. We’re not immune to the pressures facing the industry, but we believe that placing additional financial burdens on our investors should be undertaken only as a last resort. One which we carefully avoided for more than 25 years by focusing on disciplined management of our corporate balance sheet and maintaining a diversified portfolio at the corporate level.

This approach is particularly important in today’s market, where contradictions abound. There’s a record amount of dry powder—capital ready and waiting to be invested. This is money that could, in theory, be used to snap up distressed assets, take advantage of lower property valuations, and capitalize on the eventual market recovery, if only buyers and sellers could close the yawning gap between them. It’s a paradox that’s slowing down the deployment of this capital, creating a kind of gridlock in the market.

Other firms may appear to be stuck in short-term thinking, but this often stems from the need to address immediate financing, or capital expenditure demands due to high interest expenses or unmet debt covenants. An urgency to shore up their assets’ financial futures can lead firms to issue unplanned capital calls or new layers in the capital stack that take priority over existing investments, which risks alienating investors. While it’s easy to label this as shortsighted, for some sponsors, it may be the only option to prevent a total loss of assets. However, long-term trust and relationships remain paramount, and balancing the need for capital with a thoughtful plan is critical to maintaining that trust.

Treatment for Long-term Health
My long-term advice to both investors and sponsors is to remain patient and strategic, especially in times of market uncertainty. This is not a time for short-term fixes or reactive moves. Instead, it’s a time to make calculated decisions that may not pay off immediately but are designed to preserve and grow capital over time.

While admittedly not a financial luxury all sponsors can afford, lengthening hold periods may be a smart strategy to maintain income and preserve investors’ capital while waiting for valuations to recover, even if it feels difficult in the moment. For investors eyeing fresh opportunities, focus on sectors like multifamily housing and grocery-anchored retail, and avoid sectors that are struggling to adapt to the new realities of the market, like office real estate.

The market is in a state of flux, and patience will be essential as investment return timelines shift. At Encore, we believe this patience will pay off. By strategically avoiding capital calls, we’re preserving the trust we’ve built with our investors over the years. In addition, we’re solidifying our financial position and maintaining transparent communication with our investor network, so we’re ready to capitalize on the opportunities that will inevitably emerge as the market stabilizes.

Prescribed Patience
What’s clear is many firms may be in an unsustainable position, the pressure on investors is real, and there’s a deal-flow bottleneck that has so far prevented the market from moving forward. At some point, hopefully soon, the gears will start turning again—the dry powder will be deployed, and capital will flow back into the market. When that happens, you want to be aligned with sponsors who are in a position to act decisively and understand that investors are partners, not just sources of capital.

In the meantime, stay the course. It’s a challenging time, no doubt, but it’s also a time of opportunity to partner with sponsors who are willing to think differently, act responsibly, and stay true to their investors.

[1] Greg Friedman, “The Fed’s Rate Cuts Won’t Save Commercial Real Estate,” Barron’s, Sept. 20, 2024. https://www.barrons.com/articles/fed-rate-cuts-wont-save-commercial-real-estate-3c13babd.

Hospitality Acquisition in Florida

Hampton Inn, Tampa

Hospitality Acquisition in Florida

Hospitality acquisitions have the potential to be a great investment if the locations are managed correctly. Proper marketing outreach for acquisitions is obtained through strategic media placement, and the ability to always improve the location from where it began.

Hospitality Acquisitions in Tampa, Florida

Encore Hospitality highlights the Hampton Inn, located in Tampa, Florida as a great example of this. This hotel acquisition occurred in 2005, located near the Tampa International Airport, and offers many amenities for its guests.

Hospitality Acquisitions in Fort Meyers, Florida

The Best Western in Fort Meyers, Florida was a hospitality property Encore acquired in 1999. This property’s location is what made it an attractive investment choice. Offering easy access to the waterfront and close proximity to downtown Fort Meyers made this hotel acquisition desirable. We brought our leadership team in addressing the strengths and weakness of this hotel and managed the property for 8 years. When we felt the time was right and the value of the business had increased from our management efforts, we sold the location in 2007.

The Encore Hospitality Team

Our Hospitality Management Team is ranked in Hotel Business’s Top 50 hotel Developers and Owners in the nation and the team can quickly recognize the strengths and weakness of a potential acquisition location. When acquiring a hospitality location it is important to consider all of the existing strengths such as current staff, policies and procedures and to eliminate those that pay potentially hinder success.

Utilizing these key principles along with our leadership team’s industry knowledge, we continue to strengthen the overall business model for this location including the quality of service, and customer satisfaction.

If you would like to know more about Encore Hospitality, the current investment opportunities we have or general information about our hospitality services you can contact us.

If you are considering putting your hospitality location on the market, please visit our acquisitions page.

Florida Investing | Apartments for Sale

Multi-Family Properties For Sale, Florida Investing

Apartments and Multi-Family Properties for Sale and Investor Demographics

When it comes to investment opportunities in apartments and multi-family properties in the United States, there has been a very high trending pattern of investors which consist of individuals and retirees from the state of Florida. Additionally, there has been an increasing trend of money managers who represent Floridian retirees as they look into apartment projects that are for sale as well as new development projects.

Encore Multi-Family, LLC, a subsidiary of Encore Enterprises, Inc., has always seen a large demographic of clients who are from New York and California. However, the growing trend of investors who are from Florida can be attributed to these three factors: trends, geography, and motivations.

Florida Investing Trends | Apartments for Sale

For years, individuals and money managers have known that investing in apartment and multi-family properties has become a positive trend. Additionally, Encore Multi-Family, LLC and past investors understand that any investment is a risk, with no guarantees and no past projects can reflect the outcome of future projects. To learn more about past and current projects, visit Encore Multi-Family’s portfolio.

Florida Investing Geography | Apartments for Sale

With a warm, tropical climate as well as a strong tourism industry, Florida has always been an attractive state for individuals and retirees to live in. Additionally, a growing number of baby boomers who are nearing retirement are now moving into or spending a good portion of their time in Florida. Increased investor interest coming from the state of Florida isn’t a big surprise; Florida has always been an attractive state to live and retire in.

Florida Investing Motivations | Apartments for Sale

Encore Multi-Family, LLC acquires apartment properties which are sold from all over the United States. Additionally, following rigorous guidelines has enabled Encore Multi-Family to establish a strong and respectable portfolio. Encore Multi-Family is proud to recruit great leaders and establishing an industry-proven management that will foster growth in the multi-family sector for years to come. To learn more, visit Encore Multi-Family’s management team.

Florida Investing Geography | Apartments for Sale

Increased investor interest coming from the state of Florida isn’t a big surprise. Florida has always been an attractive state to live and retire in. We also believe that an increased number of baby boomers are now retiring and moving or spending a good portion of their time in Florida.

Florida Investing Trends | Apartments for Sale

Money Managers and Individuals have collectively know for a number of years now, that investing in apartment / multi family properties has been trending investment. Encore Multi-Family, LLC and our past investors know that any investment is a risk, with no guarantees and no past projects can reflect the outcome of future projects. You can view both past and future projects in our multi-family portfolio here.

Multi-Family Properties For Sale

Multi-Family Properties For Sale

Multi-Family Properties For Sale

Investors may find that multi-family properties are attractive investment opportunities. However, there are many factors to consider when purchasing or investing in multi-family properties which are sold throughout the nation. Here at Encore Enterprises, we can assist the investor in navigating through the sales process and relieve any unpredictable hardships that may come along the way.

Multi-Family Properties For Sale | Deciding Factors

When Encore Enterprise considers purchasing a multi-family property for sale, the property is evaluated by some primary factors such as the age of the property, how well it has been maintained, current managing company, asking price, location, see if any opportunities exist to increase revenue or decrease expenses, and the ability to resale if acquired.
Encore Enterprises brings a depth of experience and knowledge to the private sector when it comes to purchasing investment properties. If all deciding factors meet our standards, we will then submit the property to our investment committee and then to our qualified investors for purchasing the location in question.

Multi-Family Properties For Sale | Making The Purchase

Once Encore Enterprises has finalized the purchase of a multi-family property, they begin the renovation process. Some examples of these renovations may include hiring the best internal employees, resolving any and all past issues with current residents, and reaching out to the local community through strategic marketing. If you or your party is interested in more information on what it takes to become a qualified investor with Encore Enterprises, please contact us.