#288 Why Now Could Be the Best Time in Years to Invest in Real Estate ft. Jonathan Spitz of Lightstone Direct

Jonathan Spitz’s Journey into Real Estate

Jonathan Spitz shares how he built his career in real estate. He began after the Great Recession in 2012, working at Marcus & Millichap, where he learned the basics of commercial real estate. Later, he moved to Chicago and entered real estate finance, funding projects like multifamily and condo developments. While earning his MBA at DePaul University, he met the co-founder of Origin Investments, which introduced him to private equity real estate. He joined Origin in 2020 and spent five years raising capital and working with investors, including physicians and family offices, during both boom and downturn periods in the market.

After that, he was approached by Greg Fink from Lightstone, who shared the company’s vision for creating better investment opportunities. Lightstone is one of the largest privately held real estate firms in the United States, active since 1986. The company invests in several sectors, including multifamily, industrial, hospitality, and life sciences. What makes Lightstone unique is that it has historically used its own capital for most investments, with less than ten percent coming from outside investors. Spitz joined Lightstone Direct to help expand its platform and offer individual investors access to institutional-quality deals with stronger alignment of incentives.

The Current State of the Real Estate Market

When Peter asks about the market, Jonathan explains that the industry is still adjusting to higher interest rates that surged after 2022. He describes a common trend called “extend and pretend,” where lenders extend loans instead of foreclosing on properties that are still generating income, even though values have dropped. This approach has kept the market stable and prevented widespread distress.

Hotels, however, have been a bright spot. With very little new construction, hotel room rates have climbed in places like New York, Miami, and Los Angeles. Lightstone’s hotel portfolio has benefited from this strong demand and limited supply. Across other sectors, the company is being very selective about what it buys, focusing on high-quality assets rather than volume.

Jonathan says Lightstone is optimistic about the next three to five years. He believes property values have already adjusted downward by 20 to 30 percent in many areas, creating room for long-term recovery. Interest rates are no longer unpredictable, and fewer new projects are being built. Even with record apartment construction, most new units are being leased quickly, which is a good sign. He expects slower but steady growth ahead, especially in multifamily and industrial properties.

Long-Term Investing Mindset and Industrial Real Estate

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How Investors Can Participate in Industrial Real Estate

Peter asks how people can invest in industrial properties. Jonathan explains that there are three main ways: buying property directly, investing through syndications, or joining real estate funds. The large warehouses used by companies like Amazon or Target are usually owned through funds or REITs. However, smaller properties known as “shallow bay” industrial buildings can sometimes be bought directly.

Lightstone specializes in these smaller, multi-tenant warehouses that typically range from 20,000 to 100,000 square feet. The tenants are often local service providers such as HVAC companies or small suppliers that support nearby manufacturers. Because there is limited space available in these markets, these tenants usually stay long term, creating stable cash flow.

Jonathan explains that Lightstone’s strategy involves clustering multiple properties in the same region, which makes operations and leasing more efficient. He warns that individual investors who buy industrial properties without experience can face challenges if tenants leave or if they misjudge the local market. Lightstone’s integrated model, which includes in-house management, construction, and leasing, allows the company to manage risks and maintain strong performance.

Common Mistakes and What Makes Lightstone Unique

Peter ends by asking about common mistakes physicians make when investing in real estate. Jonathan says the most common issue is “chasing yield,” or focusing only on high returns without understanding the risks behind them. High yields often mean higher risk, such as properties in weaker markets or projects with too much debt. For example, Class A apartment buildings may produce lower returns but are considered safer, while older Class C buildings may promise more cash flow but come with expensive maintenance challenges.

Lightstone focuses on the middle ground, investing mainly in Class B properties that can generate steady income while still offering room for improvement. Because the company manages its own construction and property operations, it can control costs better and execute value-add strategies efficiently.

Jonathan also shares that Lightstone is currently buying a six-tenant shallow bay property in Greenville, South Carolina. The building has strong tenants and room to increase rents after upgrades. What sets Lightstone apart, he explains, is that they always invest at least 20 percent of their own money in every deal, showing confidence and alignment with investors.

Peter closes by thanking Jonathan for helping listeners better understand industrial real estate, market trends, and smart investing principles. Jonathan invites anyone interested to visit Lightstone Direct for more information. The episode ends with Peter encouraging physicians to continue learning how to build multiple streams of income and financial freedom.