Building Commercial Real Estate Success Through Strategic Partnerships with Nick Jones

In this episode of the DealQuest Podcast, I'm excited to welcome Nick Jones, CEO of Alakai Capital, a commercial real estate firm with an impressive track record. Nick has underwritten and acquired over 70 commercial investments and developments representing more than $250 million in value, currently overseeing 800,000+ square feet of industrial, retail, office, and medical assets across multiple states.

What makes Nick's story particularly compelling is his journey from professional wakeboarder to successful real estate investor. After earning a podium finish at the World Championships in 2011 while graduating summa cum laude from the University of Central Florida, he transitioned into commercial real estate. Today, he manages a portfolio of properties with approximately 100 investors who have made about 500 investments with his company. From raising his first round of outside capital to building lasting broker relationships that generate consistent deal flow, this conversation offers valuable insights for anyone looking to scale their real estate business or understand how strategic partnerships drive deal success.

FROM PROFESSIONAL ATHLETE TO REAL ESTATE CEO

Nick's path into commercial real estate wasn't linear. Growing up in Redmond, Washington near Microsoft and Nintendo, he witnessed his father and grandfather working in real estate but found it "incredibly boring" at the time. A story about Microsoft filming video game sequences at one of their warehouse buildings planted a seed, showing him how real estate connected to fascinating industries.

When his father and grandfather both passed away during his senior year of high school, Nick made a dramatic pivot. He moved to Florida to pursue a professional wakeboarding career with no place to stay and no class schedule. He ended up living for a few weeks in a frat house at UCF because a friend of a friend knew someone there. After reaching the professional level and competing at the World Championships, the dean of UCF's real estate program took interest in him because his own son was a pro surfer. That connection reignited Nick's interest in commercial real estate, particularly in the investment and development side where creativity meets financial opportunity.

THE FIRST DEAL THAT SET THE FOUNDATION

Nick's entry into real estate investing came through a vacant Taco Bell property that a broker friend identified. Working with his partner, they put the building under contract, signed a 10-year lease with a new tenant, and only had to replace the HVAC and roof. The timing proved incredibly fortunate. In 2011-2012, during the aftermath of the financial crisis when Florida real estate was still recovering, Nick secured 80% loan to value at 2% interest on an interest-only basis.

That first deal taught him valuable lessons about protecting downside risk and building relationships with tenants. The property delivered one of his strongest returns ever, providing both capital and confidence to pursue larger deals. From there, he rolled capital into a second deal and began building the track record that would eventually allow him to raise outside capital from a growing investor base.

MAKING THE LEAP TO RAISING OUTSIDE CAPITAL

The decision to raise outside capital came naturally but carried weight. Unlike his grandfather and father who never raised outside capital and grew slowly through traditional methods, Nick learned about syndication in school. He recognized that while losing your own capital is painful, losing someone else's capital carries an entirely different level of responsibility.

For his first capital raise, Nick bought an old bank branch all cash, planning to tear it down and build a quick service restaurant. To protect his downside risk as a new sponsor, he structured it with no debt and built in two years of interest and tax reserves. The deal came together through persistence. He approached friends' parents, fellow brokers, and anyone who would listen, putting together a detailed investment memorandum covering every possible detail. Shortly after closing, a tenant approached wanting to lease the existing building as is with a 10-year lease. Nick refinanced at 50% loan to value, pulled equity out, and used those proceeds at 50% to buy a second deal. That snowball effect of building a track record with initial investors experiencing success across multiple deals has grown to approximately 100 investors making about 500 investments with his company.

WHY SYNDICATION WORKS BETTER THAN FUNDS

While many real estate operators raise funds, Nick has continued syndicating every individual deal. The model works because his deals follow similar patterns with consistent return theses, just varying by property type and geographic location. This approach gives investors the freedom to select which markets and property types align with their preferences.

The key advantage is speed. As long as Nick can raise capital within the timeframe needed to close deals, syndication provides flexibility without the complexity of fund administration. There have been stressful moments on larger deals when waiting for investor commitments, but the model has consistently delivered. His investors appreciate seeing exactly what they're investing in and having the choice to participate based on their specific interests and availability.

THE WEIGHT OF INVESTOR CAPITAL

Managing investor capital creates a heightened level of responsibility that sharpens every aspect of deal execution. Nick approaches it similarly to personally guaranteeing loans. While losing your own capital would be unfortunate, losing someone else's capital carries profound implications for relationships and reputation.

This awareness drives meticulous attention to detail in underwriting, properly funded reserve accounts, and conservative projections. Nick would rather under-promise and over-deliver than create optimistic forecasts that fail to materialize. The transparency extends to sharing both upsides and downsides of every deal. When investors understand all aspects of a transaction, trust builds naturally. That trust, combined with consistent communication and results, has created fluid relationships where investors feel confident participating in new opportunities.

LEARNING FROM DEALS THAT DON'T GO AS PLANNED

Nick hasn't experienced the Great Financial Crisis that taught many real estate investors hard lessons about market cycles. That gap in his experience creates ongoing concern because those who lived through major downturns learned lessons that textbooks can't teach. He constantly analyzes mixed economic data and opinions, trying to prepare for scenarios he hasn't personally witnessed.

The challenges Nick has faced primarily involve tenants bailing on leases or properties not leasing as quickly as projected. These experiences taught him that contracts matter, but people matter just as much. When tenants respond unusually quickly to lease documents without any redlines for 10 or 15-year commitments, it raises red flags about how thoroughly they're evaluating the commitment. Nick now tries to connect with decision-makers as high up in organizations as possible, especially with non-credit tenants. While credit tenants like Dutch Brothers or Chipotle have strong track records, local or regional tenants require deeper investigation into their business models and the individuals behind them. If a tenant leaves in the middle of the night, the legal process benefits no one. During that time, the building still has debt payments, creating challenges even if the underlying real estate is good quality. The lesson reinforces buying good real estate first, then structuring good deals on that foundation.

DUE DILIGENCE ON HIGH-CREDIT TENANTS

Working with credit tenants presents its own challenges around due diligence access. Some larger public tenants simply direct you to look at public information online. Larger private tenants sometimes provide financials under non-disclosure agreements. Nick has encountered situations where large private tenants believing they have market leverage refuse to share information, requiring phone conversations with CFOs that provide only verbal assurances.

When facing limited financial transparency, Nick adjusts his underwriting to account for the added risk. He evaluates how much tenant improvement allowance he's providing, whether the tenant's success determines the project's viability, and if they're at or below market rents. If it's a strip center where one tenant's failure doesn't sink the entire project, the risk calculation changes. During Covid, an interesting dynamic emerged. High-credit tenants had attorneys advising them to stop paying rent because the world's future was uncertain, while Nick still had to pay his mortgage. Meanwhile, his small bay industrial tenants in 3,000 to 10,000 square foot spaces called to reassure him they were still working and rent was coming. These mom and pop operators maintained perfect payment records throughout the pandemic, while some blue chip tenants created challenges. The experience reinforced that the relationships and people behind the business matter as much as the credit profile.

BUILDING BROKER RELATIONSHIPS THAT GENERATE DEAL FLOW

The majority of Nick's deals come through brokers he's built long-term relationships with over years. These relationships prove valuable because brokers trust that Nick will maintain confidentiality on sensitive information, move quickly and decisively through underwriting and closing, and that they understand how he evaluates opportunities. After years of exchanging deals and feedback, brokers know which sites and opportunities match Nick's investment thesis.

Brokers earn commissions while Nick makes money, creating natural alignment. Since Alakai handles management, asset management, property management, accounting, acquisitions, capital markets, and development in house while underwriting deals, brokers' market knowledge becomes invaluable. They spend every day understanding market dynamics, tenant movements, and emerging opportunities. That specialized knowledge helps Nick's team move quickly on transactions that fit their criteria. The relationships have enabled geographic expansion from Florida into Texas, California, and Seattle, bringing local market expertise to each new market.

THE REALITY OF OFF-MARKET DEALS

The concept of off-market deals has become somewhat misleading in commercial real estate. Some "off-market" deals Nick sees get sent by a dozen different brokers, while some listed deals come with information not widely known to other potential buyers. Technology has created unprecedented transparency, making it easier for people to find deals and contact property owners directly.

Success depends less on whether a deal is officially listed and more on seeing all aspects of an opportunity and formulating an investment thesis quickly and efficiently. Nick's competitive advantage comes from tight relationships with vendors across environmental studies, construction, renovation, and all upfront due diligence work. This efficiency allows his team to pencil deals that others can't make work financially. When negotiating leases with tenants, understanding what truly matters to them versus what matters to Alakai creates win-win structures. Sometimes tenants prioritize higher tenant improvement allowances while Nick can increase lease terms or annual bumps, then negotiate longer interest-only periods with lenders to make the economics work. Being the only party seeing all the levers across tenant relationships, construction costs, and financing creates opportunities to structure advantageous deals regardless of whether they're officially on or off market.

BALANCING REAL ESTATE WITH ANGEL INVESTING

Nick's angel investing began early in his career when attending startup meetups and pitch presentations around Orlando. A fintech startup investment by a friend that became Orlando's first unicorn provided a taste of significant returns from early-stage technology investments. That experience highlighted a key difference from commercial real estate investing. Real estate generates consistent singles and doubles all the way to the hall of fame, while angel investing offers potential for home runs and grand slams.

The differentiation makes strategic sense. Nick continues focusing on consistent real estate returns while selectively swinging for fences on technology investments that could deliver 10x to 100x returns. Access to quality deal flow poses the biggest challenge in angel investing. The companies that become household names require early exposure to their deals, and getting that exposure proves difficult with many investors competing for opportunities. Nick relies somewhat on friends who focus more heavily on startup investing, treating them similarly to how his investors treat him as their commercial real estate allocation. Those friends provide deeper due diligence on companies and identify variables differently than Nick's real estate-focused analysis. While valuations look promising across several portfolio companies, real returns require exits. The exposure to different business models provides constant learning that applies somewhere down the road, even if the specific application isn't immediately clear.

NAVIGATING MARKET TRENDS AND ECONOMIC SIGNALS

Interest rate movements create near-term positivity in the investment world, helping with liquidity and exits on current deals while locking in better rates on new acquisitions. Another 25 or 50 basis point decrease would benefit ongoing operations. However, the longer-term question about appropriate median interest rates and whether previous stimulus created conditions requiring economic pain remains complex and outside the scope of individual deal underwriting.

Inflation continues playing a significant role, hitting different industry sectors unevenly. That bulkiness creates inefficiencies and opportunities where Nick focuses his investment thesis. The retail apocalypse predictions following Covid haven't fully materialized because people still crave experiences and getting out. Restaurants, nail salons, and service-oriented retail that can't move online continue thriving in pedestrian-friendly areas. Drive-throughs represent another clear trend as efficiency becomes paramount in American life. Almost every concept has figured out how to use drive-throughs successfully, including Chipotle proving the model works even for food types that seemed ill-suited initially. Americans continue demanding more efficiency in their daily routines, creating opportunities across Nick's four or five core investment verticals.

THE VALUE OF FREEDOM ACROSS MULTIPLE DIMENSIONS

Freedom means having physical ability to do what you want, mental option to choose your thoughts, and being surrounded by people you love. Many people sacrifice freedom trying to gain freedom, creating a challenging balancing act especially in American society. Nick acknowledges he hasn't achieved the complete freedom he aspires to because he remains in heads-down growth mode, but freedom remains a goal for himself, his team, and his investors.

The concept extends beyond financial freedom, which represents just one small aspect of true freedom. Gaining financial freedom while losing physical health or isolating yourself from loved ones creates a hollow victory. Nick's ideal life now philosophy resonates because it questions why anyone would wait to retire or sell their business to start living ideally. Building a life worth living right now while pursuing business growth creates more sustainable success than sacrificing everything for a future payoff that may never feel sufficient.

Listen to the full episode to hear Nick share his complete journey from professional wakeboarder to managing over $250 million in commercial real estate investments. From his approach to tenant relationships and broker partnerships to the lessons learned from deals that didn't go exactly as planned, this conversation offers valuable insights for anyone building investment businesses or seeking to understand how successful operators structure deals and raise capital.

FOR MORE ON THIS EPISODE: https://www.coreykupfer.com/blog/nickjones

FOR MORE ON NICK JONES:
https://www.alakai-capital.com
https://www.linkedin.com/company/alakaicapital/
https://www.linkedin.com/in/nickjonesrealestate/
https://www.instagram.com/alakaicapital/

FOR MORE ON COREY KUPFER
https://www.linkedin.com/in/coreykupfer/
https://www.coreykupfer.com/

Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

Get deal-ready with the DealQuest Podcast with Corey Kupfer, where like-minded entrepreneurs and business leaders converge, share insights and challenges, and success stories. Equip yourself with the tools, resources, and support necessary to navigate the complex yet rewarding world of dealmaking. Dive into the world of deal-driven growth today!