Season 7 of the No Cap podcast continues with Kip Sowden, Chairman & CEO of RREAF Holdings, and Doug McKnight, President of RREAF Holdings.
RREAF has quietly become one of the more active vertically integrated real estate platforms across the South and Southeast. The firm operates across multifamily, beachfront hospitality, master-planned communities, extended stay hotels, and outdoor communities, with roughly $4.8B in assets and around 600 employees across 16 states.
Jack Stone and Alex Gornik sit down with Kip and Doug to discuss how the company was built, why they focus on “all things residential,” how they approach today’s distressed opportunities, and why they believe flexibility matters more than scale in this market cycle.
Conversation Highlights
Alex: Tell us how you guys met. How did RREAF come together?
Kip Sowder: We met at my wife’s grandmother’s 100th birthday celebration in Memphis, Tennessee. We got to know each other over several years before Doug started investing in some of my real estate deals. At the time, I was building my brokerage and investment business in Texas while Doug was in fixed income and capital markets.
Doug McKnight: I really enjoyed his business model and obviously Texas was a great place to put capital even back then.
Jack: What made you want to become a principal instead of staying on the brokerage side?
Kip: I’m putting together the entire capital stack. Construction loans, permanent debt, LP equity, preferred equity. I’m getting paid nice fees, but once those fees are paid, I’m out of the deal until the next deal. I realized I wanted to be on the ownership side of commercial real estate instead of only advising other people on transactions.
There is not any part of commercial real estate I haven’t touched.
Kip: I thought we might see RTC 2, so I set up RREAF Holdings to be 100% principal. We originally thought we would spend most of our time buying distressed notes, but we shifted toward buying hard real estate assets throughout the South and Southeast.
Doug: We wanted to figure out what asset classes and locations would be the most recession resilient. For us, it was all things residential in the South Southeast and drive-to leisure hospitality. That thesis still defines what we do today.
The conversation later shifted to how RREAF structured the company differently from institutional real estate platforms.
Doug: We never wanted institutional capital at the holding company level directing our decisions. We also avoided the traditional fund model of raising discretionary capital before identifying deals.
Kip: We have our own capex team, construction team, legal department, title company, insurance agency. We are vertically integrated and move very, very quickly. About 75% of the time we end up buying the asset if it’s in markets that we like. A lot of the recent deals are coming directly from bridge lenders who need experienced operators to stabilize properties.
Doug: We’re buying at 65% to 70% of what the previous buyer paid in 2021 and 2022.
Alex: Is there a market right now that’s untouchable?
Kip: Houston is actually a big buy market for us. There were so many units delivered over the last few years that occupancy dropped and concessions came back into the market, but a lot of that supply has now been absorbed. When you have a vacuum in a good market, you eventually reset the market.
We never wanted institutional capital at the holding company level sitting in our committees telling us what to do.
The discussion then moved into build-to-rent and large-scale master-planned communities, which have become another major focus for the company.
Kip: RREAF Communities is literally building cities. We bought 3,300 acres south of Dallas and designed a project with 8,500 single-family lots, multifamily, build-to-rent, commercial development, and infrastructure. We’ll sell finished lots to homebuilders while developing the rental components ourselves. For us, BTR really starts with the school district. It has to be in a blue ribbon school district with infrastructure and services already in place. There’s a large part of the population that wants a home in a good school district but can’t afford to buy today.
Doug: It’s a horizontal multifamily project. It’s not the same as scattered-site single-family rentals.
Later in the episode, the conversation shifted again toward hospitality and why RREAF likes extended stay projects in the current market.
Doug: It’s kind of a hybrid space between multifamily and hospitality. You have traveling nurses, infrastructure workers, universities, corporate training, and people in transition who need flexibility for longer stays.
Kip: We’re focused entirely on Hilton LivSmart, Hyatt Studios, and Marriott StudioRes. We think institutional capital is going to overpay for those brands because of the names behind them and because the product performs so well.
Toward the end of the episode, Jack and Alex asked about liquidity, transaction activity, and what RREAF is seeing across the market today.
Doug: For the first time in four or five years, we’re seeing a lot of institutional joint venture equity coming back into the market. There is a tremendous amount of liquidity sitting on the sidelines right now.
Kip: There is so much liquidity in the market. We expected more pullback from tariffs and geopolitical noise, but capital keeps coming back into real estate.
The episode closed with a discussion about affordability, migration trends, and concessions across Sunbelt multifamily markets. Kip and Doug also explained why RREAF remains focused on high-growth, pro-business states across the South and Southeast.
Watch the full episode on our YouTube Channel or your favorite podcast app.
Tune in weekly for new episodes of No Cap by CRE Daily!
