GlobeSt.com: Map out your coverage region for us.

Balin: Our strategy today is to invest with operating partners up and down the East Coast. We're as far south as Miami/Dade County and as far north as Springfield, MA, with a concentration in the Mid-Atlantic.

GlobeSt.com: Do you expect that to change?

Balin: It really won't for the near future. We will continue to look for opportunities along the coast. Down the pike, we will be looking across the country. Right now there are plenty of good opportunities here, and it's all easy commuting. To leapfrog the close opportunities for more distant ones is not a good strategic fit for us today, given our resources.

GlobeSt.com: Have the types of properties you go after changed?

Balin: Not so much in the past year and a half. The major shift for us, actually, in the past three years, has been to refine our business strategy. Today, we define our mission not so much around the individual asset as much as around the strategy of the operating partner. We look for relationships where the deals are replicable, where the local partners have identified a unique ability to recognize opportunity or create value. We look at ourselves as creating rather than buying revenues.

GlobeSt.com: The property has to be a key component in that, though, no?

Balin: It's much more difficult to find good transactions to invest in, but we're patient. We would rather not invest in deals that don't fit our objectives. We don't want to place money only to get a poor risk-adjusted return. If someone came to us with a one-off deal that we thought had no hope of being replicated again—even if it was a deal that was going to make us a lot of money, we'd pass. We came to the conclusion that if we are going to scale our business and be efficient in what we do, complex one-off deals aren't the way to do that. You burn too many brain cells.

GlobeSt.com: Do you hold any properties in your portfolio on your own account?

Balin: We have 35 properties, and in the past three years only two of those have been bought on our own. The rest have been done with operating partners. GlobeSt.com: What is your hold period?

Balin: We just sold a couple of properties we owned for almost 10 years. Much of the capital out on the market is short-term. Our capital comes from a high net-worth family. We have a long-term perspective on the marketplace. If you were to interview people who run some of the funds and ask how frustrating it is to sell prematurely and if they would like to own it themselves, they will tell you that, if they could continue to own that property, they would love it. The other question you have to ask yourself is, once you sell a property today, where are you going to reinvest the money?

GlobeSt.com: But it must be frustrating for you. You must get squeezed out of a lot of deals you would actually like to get into.Balin: It is frustrating to see properties trade at numbers that make you ask how are they going to make money. It takes a lot of discipline to pass on those transactions. As long as interest rates stay where they are, those people who are playing that game are going to keep on winning. But it's a risky game—and it's not even a real estate game. It's a capital markets game, and we are not capital market investors. We're real estate investors. The reality is that, as interest rates move, those who have leveraged themselves with short-term debt could find that their profits are significantly different from what they expected.

We're wired differently than a lot of the players out there. We're more conservative and we do our due diligence very thoroughly. The key differentiator with us is that we are not driven to invest that money. I do not want any pressure to put that money out.