Yale ICF Advisory Board Member Spotlight: Francis Lively '15

In this blog series, the Yale ICF will highlight ICF Advisory Board Members who are practitioners from various finance fields and alumni of the Yale School of Management and/or Yale University. Our board members enjoy giving back to the Yale community by participating in panels, guest lecturing, and taking part in Q&A sessions with students. Their generous financial support allows the Yale ICF to host events, sponsor academic initiatives, provide research support to faculty, and much more. The Yale ICF is grateful for their continued support!

1. What is your current role and industry?

I am the President and Chief Executive Officer of The LCP Group, LP, a New York- based real estate investment management firm. 

Over the years, we have developed a thematic investment approach with a specific focus on debt and equity investments in hotels, and single tenant net leased properties, particularly in the net leased daycare sector. This targeted mindset has allowed us to capitalize on opportunities and specialize in specific niches.

2. How did you get into this field?

I began my career as a commercial real estate lawyer at Shearman & Sterling, LLP.  The experience I gained at the firm provided me with a strong foundation in legal matters related to real estate transactions, which undoubtedly continues to be an asset in my current role.

But I was drawn to complexities and intricacies of real estate investments which led me to leaving my career as a lawyer and enrolling in the Yale School of Management (SOM) to gain the necessary skill set, and a comprehensive business education to make this career shift.

Connecting with Robert Roskind, Founder of the LCP Group and a seasoned real estate investor and entrepreneur, was a pivotal step in my journey. His mentorship combined with the opportunity to assume a leadership position at LCP helped me in achieving my career goals.

Today, my partnership with Robert, spanning nine years and counting, has been marked by significant milestones and accomplishments as we continue the journey to take the company to new heights.

3. What are the biggest challenges and opportunities that professionals in your industry face today?

The recent global pandemic and the economic repercussions resulting from inflation have had a profound impact on various sectors, including commercial real estate and, more specifically, hotel investments.

The rapid rise in interest rates and the concurrent fall in market values have created significant challenges for investors and hotel owners alike. This complex investment landscape, marked by uncertainty, has deterred many from engaging in M&A activity within the industry. Additionally, hotel owners are finding it increasingly difficult to execute their planned exit strategies, whether that involves selling properties at expected prices or refinancing them on favorable terms, especially when initial underwriting was done during a low-interest-rate environment.

Indeed, in times of volatility and distress, opportunities often arise for those who can adapt and capitalize on the changing market dynamics.

With traditional lenders pulling back, the resulting financing gap has created an opportunity for private lenders such as us to step in and provide creative financing solutions at attractive yields.

Additionally, as property values reset in response to market conditions, we can strategically identify undervalued or distressed assets that have the potential for long-term value appreciation through implementing value-add strategies.

4. Where do you see the industry going in the future?

While the real estate industry is dynamic and responsive to changing trends, it remains a valuable and resilient asset class.

The repurposing of underutilized office space and adaptation of artificial intelligence (AI) in real estate underwriting and operations, especially in operationally intensive areas like hotels, are just a few examples of how this sector is continually adapting to evolving consumer preferences and technologies to remain attractive to investors. However, at the end of the day, land remains scarce and real estate is here to stay.

5. What advice do you have for someone new to the industry?

Entering this field can be both an exciting and a challenging endeavor so my advice to you is simple:

• Continuous learning is key so always seek opportunities to expand your skills and knowledge. Proactively engage in various projects to gain exposure and experience in different facets of the industry.
• Equally important is to cultivate and nurture relationships within the industry as these connections can be instrumental in sourcing deals, establishing partnerships, and ultimately closing successful transactions.
• And lastly, master the art of storytelling – a compelling narrative can make a significant difference in convincing others to invest with you.