Aaron Greeno and Kev Zoryan recently launched Arselle Investments, a private real estate investment platform, to partner with firms, providing both capital and advisory services to address challenges facing the real estate landscape such as market dislocation and succession issues.
Prior to this venture, the two had overlapped at Morgan Stanley Real Estate Investing, where Zoryan served in a number of roles including head of the West Coast, co-head of acquisitions and head of U.S. asset management. Meanwhile, Greeno operated as co-head of U.S. investments at the firm until 2020 before joining Dune Real Estate Partners as head of the West Coast.
“We’re targeting situations where there are strong operating platforms that we feel we can enhance in some way, who have the cultural alignment and investment approach that aligns with our thinking… to access high quality real estate deals and deliver strong performance,” Greeno said, adding that Arselle, which is headquartered in Sawtelle, will primarily focus on the western U.S.
One issue Arselle wants to help firms navigate is addressing succession turmoil caused by the impact previous declines in transaction volumes have had on current workforce availability. For example, Zoryan pointed to the early 1990s when real estate transaction activity significantly slowed, connecting this slump to a decline in people wanting to enter the real estate business at that time.
Thus, 30 years later, there is a professional gap of seasoned real estate executives who now would be ready to lead firms following the retirement of current executives, he said.
“One of the observations that we had … in the last several years has been that there are these many great real estate organizations with great principals that are running them, but because of those professional gaps, there are succession issues that ultimately are embedded in these organizations,” Zoryan said.
Zoryan and Greeno plan to help the firms they partner with navigate these next stages of growth and planning.
The pair will also work with firms to address changes in the real estate landscape as they relate to products concerning evolving demands for space, power, and ingress and egress.
“Real estate is changing faster now than it probably ever has in our careers,” Zoryan said. “…How do we change to build the right built environment for what is going to be demanded in the future? Because it’s not only about what’s there today, but it’s also about what’s changing very quickly in front of us.”
Targeting firms to invest in will come from looking into the fundamentals behind making proper asset and market selection.
“Our strategy is really to build verticals across a few asset classes that we feel have the right dynamics to perform well through the mid and long term because we want to be in these businesses for a long time and also have near term attractive pricing and dynamics where we can do well with investments that we would make in short order,” Greeno said.
Within those asset classes, Greeno said that Arselle will tailor its approach based on location, risk profiles, cash orientation and leverage taking cues from data to find risk-adjusted returns.
Greeno and Zoryan named the firm Arselle because it combines the names of the highest peaks in each of their family’s home countries: Mount Aragats in Armenia, where Zoryan’s family is from, and Pic la Selle in Haiti, where Greeno’s family is from.
“We wanted to look up at (Arselle) and remember where we came from and ultimately maintain a level of gratitude for the opportunity we’ve been given here to be able to build a business and be able to build it together,” Greeno said.
