A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.Fernando de Leon, founder of Leon Capital Group, started a small lot development company in 2004 with $100,000 and turned it into a $10 billion business, focused mainly on commercial real estate. He did that, he says, by predicting distress, watching the source of capital and leaning on his Harvard degree in evolutionary biology. While others lost their shirts in the great financial crisis, De Leon began to make his fortune. He left a job at Goldman Sachs to start his own business and was doing some deals in residential lot development. A year in, he said, he saw some of the early indications from subprime mortgages and overbuilding that this was going to be, “a difficult cycle change.””We basically said, look, we see things here that are fundamentally unsound. We’re going to take these property positions and sell them, and then kind of wait and see what happens,” De Leon told Property Play.”We divested, we brought back some liquidity, and then we sort of waited, and then in 2008 to 2012 we became fixers. We became people that were able to talk to banks, to life insurance companies, to businesses that had loan exposure, and we were able to solve problems for them,” he said. De Leon said he turned around projects that had stalled and become problematic for lenders, experience he now says informed his thinking in the early years of the pandemic. “In 2021, we sold a great deal, several billion dollars of real estate because prices were high, and that was a function of low interest rates and euphoria and bad incentives in the market,” he said. “Part of it is u …
