Someday, when the single-family home is like a barrel of oil — standardized, tradeable online, priced in real time — you’ll have Brad Greiwe to thank (or curse) for it.
In 2011, a 20-something Greiwe and seven others founded Invitation Homes, an investment firm focused on single-family rentals. The entrepreneurs persuaded Blackstone to back them to the tune of $1 billion and went on a home-buying spree for the ages, at one point buying up to $150 million in properties a week. Today, Invitation Homes is the country’s largest single-family rental landlord, and is at the center of the debate about whether Wall Street is crowding out individual homebuyers.
The lessons Greiwe took from building the technology platform and gaining the institutional buy-in on which Invitation Homes depended are now being applied to his latest pursuit: Fifth Wall, the country’s largest real estate-focused venture capital firm. With over $3 billion in assets under management, Fifth Wall is a central character in proptech and the emerging field of built-world climate tech, backing startups such as Opendoor, Doma, Hippo, Industrious, VTS and Turntide Technologies.
Though proptech is now facing extreme turbulence — some of the startups that went public have seen their share prices fall by as much as 90 percent — Greiwe believes those that can weather the current capital-markets storm will be in a position to reap massive rewards because the industry’s need for technology isn’t going away.
“There was so much fervor in our ecosystem because the TAMs were so big that a lot of inexperienced VCs who hadn’t owned or operated real estate made some misguided assumptions,” Greiwe said. The Real Deal caught up with him where it all started, his childhood home in Cincinnati, to chat about his career, his marriage to a star ballerina and rolling with the punches — both literally and figuratively.
This interview has been edited and condensed for clarity.
Born: November 24, 1982
Hometown: Cincinnati, Ohio
Lives: Incline Valley, Nevada
Family: Married, two children
You were a wide receiver at Harvard. But I gather you never saw yourself going pro.
I went to high school in Ohio, where football is the be-all, end-all. My intention with football was always to use it to get me into the best academic school possible.
I toured Harvard, and I’m like, “I’m coming here no matter what.” And I just spent the next two years figuring out how to get in.
Did you ever have a complex being from the Midwest among all the Boston blue bloods?
A hundred percent. I wouldn’t call it a chip on my shoulder. It was more a want to prove myself. There’s always this impression that you don’t belong. Not that anybody explicitly said it — it’s just that you don’t come from a certain pedigree that’s very visible at a school like that. They come from Choate, or Andover, and coming from Ohio wasn’t a typical path. When put in the right environment, you elevate yourself to a level that I don’t think I would’ve done organically.
What’s the preppiest thing you picked up there?
The double-popped collar was a thing back then. I ignored that, thank God.
You did then take a conventional path, into investment banking.
One of my regrets from college was assuming that the paths that were laid out were the right ones. If you weren’t going into investment banking or consulting, you weren’t winning. That was when Mark [Zuckerberg] was there creating Facebook. My friends were employees two, three and five, and now they don’t work and live on boats.
I do owe a lot to my year of investment banking. It was like being recruited for football, because it was about who could take the most pain, who could outlast the other guys.
When you got into real estate, you were in the orbit of guys like Barry Sternlicht and Jerry Speyer. What’d you pick up from them?
Just being in close proximity and watching how they operate, watching how they think about risk and how they take advantage of opportunity. All those things were incredibly valuable at an early age, in a tumultuous economic environment. We [at Tishman Speyer] had just bought [REIT] Archstone-Smith and Stuy Town. To be able to understand how you work out deals like that and understand the flip side of investing, when everything goes wrong, how do you navigate risk and position yourself for future success?
And when Starwood raised a fund, I jumped at the chance to actually put money to work. To be able to watch Barry navigate one of the biggest financial crises and take advantage of a lot of real estate dislocation, to structure and capitalize deals and just think about them more creatively than the competition, all that stuff was wildly valuable.
The turmoil in CRE then calls to what we’re seeing in proptech now. A lot of the companies Fifth Wall has invested in, among them Doma, Hippo, Opendoor, are down 70, 80, even 90 percent. There have been huge layoffs. How do you as an investor navigate that?
It’s the blessing and the curse of venture capital. There’s a lot that you want to do, but in some instances, because you’re a minority, non-controlling investor, especially when they go public, there’s not much you can do besides just hopefully give sage advice as a partner and sometimes as a friend. The ebbs and flows in the public markets tend to be severe in the sense of when it’s bad, it’s really bad, when it’s good, it can be really good.
It can sometimes be extremely frustrating because it doesn’t seem logical. So in these scenarios, it’s more about weathering the storm than it is doing anything dramatic.
Do you regret having championed some of these companies to grow so quickly and then when the market turned, they couldn’t sustain that?
You’re always trying to position and encourage your companies for growth. But because [Fifth Wall] is rooted in private equity and real estate, our advice is always rooted in the consequences of growth for growth’s sake.
We think there’s a very clear delineation between a real estate company, a tech-enabled real estate company and a software business. All require different skills, different management and different growth trajectories. I don’t think we regret anything, because a lot of the decisions that a lot of our portfolio companies made were the right ones for the time.
Tech in general has taken a hit, but proptech has taken an even bigger one. A lot of these startups were carrying heavy losses but were able to go public because the markets were receptive. Now they might have to throw out the old playbook in a way that’s harmful because the stock keeps getting hammered.
The takeaway from the last handful of years is that there’s an element of evolution that needs to take place. The opportunity was so massive that people invested without the context of industry experience to understand what they were investing in. So it isn’t to say that the companies that were formed shouldn’t have been formed, but some of them should have been capitalized differently.
The most fascinating part of your career was Invitation Homes. It’s the pioneer of this trend that I’m obsessed with, the home as a commodity. How’d you get Blackstone to back you?
We were in our late 20s at the time. I didn’t own my own home, let alone ever bought one for investment. There was no information on the industry at the time. Nobody knew who was buying these homes and managing them. So we kind of organically ran into [now Invitation Homes CEO] Dallas Tanner, who ran Treehouse. And we said, “Hey, if we can go raise you a bunch of money, you let us have a piece of this business.” They said sure.
Then we went to the multifamily property managers and tried to convince them that this is a massive business. Greystar said no. Riverstone was the second-largest. Their founders were two guys from Europe and actually had owned SFR properties in the U.K. They loved the idea.
Armed with that, we had the local on-the-ground experience. We had two ex-bankers who could put the pitch decks together and institutionalize the business. And then two gray guys, who had managed and run billion-dollar businesses before. So that was a better story.
That’s when we started pitching everybody under the sun. We got a lot of guys saying, “This is crazy, how am I going to put billions of dollars to work? How are you going to manage these over large geographic regions?” All the reasons a lot of folks tend to dismiss innovation.
Blackstone got it. For them there was no downside. You buy a bunch of homes. If you can’t build the platform and make it a going concern, you’ve just bought a bunch of stuff at below replacement cost.
Plan A is moonshot returns, but even Plan B, you make money.
You still make a return. That seems super simple when you think about it with hindsight, but at the time they were the only ones that evaluated it that way. We didn’t have the tech on day one, but being able to engage and build that stuff in real time was probably the greatest business school I could have ever attended. What does it mean to evaluate, identify and integrate technology across a scaled and growing organization, especially one tied to hard assets? A lot of the core thesis behind Fifth Wall emanated from building the tech to execute on that strategy.
Your co-founder, Brendan Wallace, is much more of an in-the-spotlight guy. What’s your dynamic like?
That’s what makes us great partners. We have two very different skill sets and two very different approaches to business. I’m married and have a bunch of kids, and he’s single and globetrotting. The persona that he pitches is extremely genuine in the sense that he is adventurous, he is intellectually curious and a social butterfly. And I think that bodes really well for the front-end marketing of our firm.
I’m the opposite. I love being in front of people, but I like doing it behind the scenes. Like, “You’re going to tell me what’s wrong with your business and I’m going to help you fix it.” I can’t do that in the limelight.
You talk about wanting to build a generational business. What does money mean to you?
Money’s never been the driver. It’s really been competition. There’s nothing more interesting to me than walking into a meeting with an idea and having an investor tell you, “This is dumb,” or “This is crazy; this can’t be done.”
Your wife, Sarah Van Patten, just retired as the principal dancer of the San Francisco Ballet. During Covid, she was in a pretty serious performance bubble, making you the primary caregiver for your two boys.
It’s funny, whenever anybody finds that out, they’re like, “Oh my God, what an amazing husband you are.” And she’s just like…
That’s table stakes for most women.
You’re just taking care of the kids. But at the same time, I’m also humbled by the fact that I’m able to put my wife in a position to do what she loves. Because her shelf life’s limited. So giving her the opportunity to finish out her career on top and do it in a really graceful manner, I’d do that 20 times over. Plus, I like my kids.
Any takeaways from living with an elite athlete?
I thought I was an athlete until I met my wife and I realized what a real athlete looked like. A lot of what I’ve taken away is discipline and time management. Watching somebody perform at the top of their game is extremely motivating, like I got to get my shit together.
Did you ever try getting up on pointe?
Never once. I definitely tried to do some of the lifts that the guys did, but quickly realized that requires a little bit more grace than I’m capable of.
What’s the greatest piece of advice you’ve ever received?
My uncle told me to keep this in mind: How do you go from success to significance?
There’s a growing fear that this institutionalization of single-family rentals has crowded out the American dream of homeownership. What’s your response to that?
It’s a conversation that merits discussion. In this environment, renting is a viable and in some instances a more attractive option. So I think it’s about how to create more options for consumers, do so in a fair and transparent way and spend the appropriate amount of time, energy, effort and capital to help mitigate affordability issues.
Are you worried about regulation putting a damper on the sector?
My hope is that regulators understand and take into account what homeownership really means. And in some instances why homeownership is actually counterintuitive and in some instances why it could be harmful. So really understanding that this is about consumer choice and optionality. It’s a necessary discussion, but not something where we should be painting SFR with this broad brush of corporate greed and “Wall Street versus Main Street.”
You met your wife on a blind date. What struck you about her?
I was working at Starwood at the time and sleeping under my desk. So when the opportunity came up to interact with somebody outside of work, I jumped at it.
I knew she was a dancer, but I didn’t realize she was a child prodigy. I was struck by how humble she was in terms of not really wanting to talk much about herself and her career and wanting to learn more about me. Also, the fact that she ate more than I did — you assume a ballerina is going to be a cheap date — I think she ate her steak and part of mine.
In this industry, you’re often running into these alpha-male guys who try to bully you into submission. How have you dealt with that?
A lot of the best in this business, they’re sharks. They take no prisoners, and the assumption is that time heals all wounds. Unfortunately, the industry reinforces that. But we talked about role models, guys like Jon Gray, who says what he means and does what he says. I always modeled my own career on that, you know, you always play the long game.
One of the things I kept hearing about you is how unruffled you are. And then I was told a now-legendary story…
Oh, geez. Who told you that?
I do my job. So it’s true? Let’s hear it.
I was president of one of the final clubs [at Harvard]. My job was to keep everybody safe. And there was an altercation outside. A gentleman who was inebriated was asked to leave. He was loitering outside the house and causing trouble. So I went outside to politely ask him and his friends to vacate the premises. He politely declined and threatened to punch me in the face. At Harvard, it’s a one-strike rule, so I said, “Listen, I’m not getting into a fight. If you want to punch me, go ahead.” And he proceeded to punch me a few times.
I was a little tougher back then. So I took a few licks and didn’t react. You don’t ever want to be in a fight where the other guy just sits there — that’s never a good sign. So he backed off and left, and the next day he apologized profusely. I told him to write a letter to the entire club and I framed it and put it on the fireplace.