After years of watching from the sidelines, many commercial real estate players are finally seeing the distressed-asset window open—and Cannon Hill Capital Partners is leaning in. The Washington, D.C.-to-Boston-focused investment firm sees fresh opportunity emerging across office, multifamily, industrial, and life sciences sectors as refinancing risks and leasing challenges continue to unsettle the market.
“When we’re looking at the landscape and maturing loans, there’s going to be a need,” says Chief Investment Officer and co-founder Eric Rubin. “Given the dynamic going on of refinancing risk and leasing issues on some of these buildings and a need for new equity, that’s where we’re seeing opportunities.”
Cannon Hill manages three funds encompassing 10 million square feet of property, describing its work as “acquiring, developing, and repositioning real estate.” Rubin says the firm’s guiding principle is simple: identify where tenant demand exists and determine the highest and best use for each building. “For deals that are super cheap, it’s any end-user demand,” he tells GlobeSt.com. “What is going to be the highest and best use of the building?”
That question shapes everything from targeting and pricing to redevelopment and repositioning strategies. The “best use” might mean recapitalizing a building around a new anchor tenant, upgrading to compete more effectively in the existing market, converting to an alternate use such as industrial or residential, or even demolishing for land value.
“If you’re building true warehouse industrial, that’s going to be cheaper than building a high-end residential building,” Rubin notes. “Those are two different types of projects.” He adds that suburban offices often create their own opportunities, particularly when existing tenants want to stay or expand. “There are some use cases where a tenant wants to stay or grow, and you can do an expansion transaction.”
Over time, Cannon Hill’s geographic focus has allowed it to refine an intuitive grasp of local market potential. “Because I do it so often, [the right use is] more obvious to me,” Rubin says. “We leverage the team on our side to know how to approach it. It’s pretty obvious the right use based on the neighborhood and attributes it has.”
Armed with extensive information on tenant activity and location trends, Cannon Hill homes in on markets where end users want to be. “That helps form where we want to be focused,” Rubin says. “Then it’s about being really selective on our strategy.” Deals often begin with identifying a property that presents a clear use case and customer base, then layering in capital structure opportunities such as debt maturities or recapitalizations.
“It’s taking advantage of the relationships we have on the brokerage side and across our existing portfolio,” Rubin explains. With its vertically integrated platform—spanning construction, property management, financing, and advisory services—Cannon Hill positions itself to engage across multiple stages of a deal. Typically holding properties for three to five years, the firm blends flexibility with local insight to capture value as the next cycle of distress unfolds.
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