Ward Capital Management

D'Wayne Prieto, Managing Principal, Ward Capital Management, LLC Interview

By Mile Modic, Eric Harris

11/03/2016

 

D'Wayne Prieto, Managing Principal, WARD Capital Management, LLC Interview

Exclusive: D’Wayne Prieto believes the best way to help others is to do your job exceptionally well and without compromise. A young man who leads by example has become a role model.

It is exactly 11:00 p.m. on a seasonably warm October night. The setting is a former bank building located in Dobbs Ferry, New York that has recently been converted into the delightfully decorated home of D’Wayne and his wife, Jewelle Prieto.

As you enter the loft space, the festive scene unfolds and it is filled with A-List attendees wearing diverse and elaborate Halloween costumes. You cannot help but notice that the crowd is multifarious and best described as: a room full of people having a blast while relishing to the tunes of world famous DJ Enuff.

As the host (D’Wayne) moves throughout the crowd you immediately recognize that he commands both love and admiration. Mr. Prieto’s life has had many unforeseen obstacles; but you would never know based on his ear to ear grin and killer dance moves. Make no mistake, this young man is bound to create extraordinary brand value for WARD Capital Management  and in the real estate industry. 

WARD Capital Management, LLC is an acquisition and investment firm focused on mid-market real estate assets in the New York Metropolitan area and is owned and managed by D’Wayne Prieto. It was started in 2005. WARD, and its affiliated entities, seek opportunities that require a value-added approach to unlocking the untapped upside in the assets acquired.

It’s an operation run to the last detail by Mr. Prieto and focused on finding real estate value  in areas many others do not see or understand. Among the operations, WARD Capital Management has several developments in progress.

The first are the homes located at Beckwith Point in New Rochelle, NY. In 2013, D’Wayne began the development of a proprietary and architecturally unique line of luxury homes with famed Architect, William Alicea. The property at Beckwith Point was acquired vacant & sub-divided into 2 lots with 3,500 SF luxury single-family waterfront homes built on each; these unique homes are now in their 4th generation of development. Second is The Maple Avenue Residences in New Rochelle, NY, a 6-unit 15,000 SF residential condominium project that is under construction. The property was rezoned from single-family use to multifamily. Third, The Castaway Marina in New Rochelle, NY. A 38-unit luxury condominium development with 360-degree views of the Long Island Sound and the New Rochelle Harbor. This project is under contract. And lastly, the acquisition of The Tides Motors Inn in Locust Valley, NY. This property is currently a motel on the North Shore of The Town of Oyster Bay and will be converted to a luxury hotel. This project is under contract.

D’Wayne determines each project, he manages it, and, yes, he owns – or at least is an investor in - each completed real estate transaction. He feels dignified of his Puerto Rican roots and was born and raised in the Bronx. For D’Wayne, his motivation for helping others is profound and determined. He is not self-serving – but rather has a keen sense of doing the right thing and doing them well. D’Wayne has successfully distinguished himself as a natural leader who dedicates himself to his responsibilities at WARD Capital Management, his family and community. Such characteristics will undoubtedly help D’Wayne lead WARD Capital Management in achieving significant brand value

REAL ESTATE

How did you become interested in real estate?

Early on I realized that one of the most consistent and proven ways to build wealth was to own real estate. I first became interested in real estate because I always wondered how my mother, a single mother of 5 boys, was able to raise us. I later understood that we owned our 3-family home in the South Bronx. Through that monthly income stream, my mother was able to support my entire family.

My interest in real estate further developed during my undergraduate studies. While attending Vanderbilt University, I conducted an independent study as a Cognitive Studies major and found that the underlying way to build real wealth was through real estate ownership. 

What is your strategy to operating a successful real estate company?

Our strategy at WARD Capital is relatively simple: we identify troubled non-performing real estate assets and re-organize them into income performing assets. Then, we take the proceeds earned and invest in stable rental producing assets. 

What type of real estate do you specialize in?

We specialize in three real estate asset classes: mix-use residential multi-family, luxury single-family homes and hotels.

Tell me about your largest acquisition?

My largest transaction was also my smallest. When I decided to start WARD Capital Management (WCM) I acquired a small portfolio of 20 units using the same investment philosophy I had been using while working deals that were over $50,000,000 dollars at Belfonti Capital Partners. The only difference was that now, I was the Principal and was my personal dollars being committed. In this business, it takes you the same amount of time to do a large transaction as a small one. But what is really “big” is your ability to do it on your own with your money and take on all the risk on your shoulders. People believe in you and you ultimately believe in yourself.

Biggest challenge?

My biggest challenge is navigating the pitfalls of the real estate industry that no one talks about when you are an entrepreneur. Real estate is not a glamorous business. The average person only sees your success and not the day-to-day grind it takes to acquire that success or how the success pays for the upcoming challenges to get there once more and turn a profit each year.

Biggest failure and what you learned from it?

My biggest failure was being over confident in my investment strategy and going after a deal that was too large for my firm at the time. I invested a substantial sum of money on a deal that I was confident was going to take my firm to the next level. But, what I didn’t account for was people’s ill will. I was so focused on my investment strategy and seeing it to completion that I failed to notice the qualitative shortcomings of the seller and how it would cost me to close the transaction. I should have pulled out of the transaction sooner than I did or flipped to another buyer that was better capitalized.

Why Westchester? Thoughts on developing in the market vs. NYC?

The Westchester real estate market is based on real estate fundamentals, and the Manhattan market is not. Everything is speculation and dependent upon variables that one cannot control. For every person who makes it big in NYC, there are millions who have lost it all. I am a sophisticated, qualitative and quantitative real estate investor. The Westchester market enables me to make investment decisions rooted in reality.

What are some trends you are seeing in the market today?

In the residential market, I see a struggle between creating housing for the young professionals and the young professional who are more established and looking to grow a family. The market seems to have forgotten the established group in favor of the less established because they are able to economically max out in short-term revenues. At WARD, we do not have a short-term strategy. Our goal is to build long-term wealth and substantial capital appreciation; therefore, we focus on young professional are growing their family. 

BACKGROUND

Where did you grow up?

I was born in New York City and grew up on Ward Avenue in the South Bronx. I attended elementary school at P.S. 77. At the age of 9, my mother was diagnosed with Leukemia and it was her wish to pass away in Puerto Rico. She was given the life expectancy of 6 months but we got to enjoy her for another three years in the Vista Mar section of Carolina, Puerto Rico. After she passed, we moved back to Ward Avenue and I became a Ward of the state; ultimately being raised by my three eldest brothers.

What was it like growing up in the Bronx?

Growing up in the Bronx builds character. The walk back from school was an exercise in diplomacy. How to avoid getting the chain my mother gave me robbed, how not to fall victim to being assaulted during a gang members initiation…those were the things I navigated en-route. However, when I was finally close to home, it felt like I was entering my ward/zone, and I could finally relax. Can you imagine this happening every day?

What challenges and obstacles have you faced in your life and how did you handle it?

My mother passed when I was 12. I was then raised by my older brothers- and by older, I mean early 20's- during a time when they were trying to figure out who they were as young adults. It was a very difficult. Without experienced parental figures, advisors or a path to follow…we all had to figure out how to survive and be successful day by day mostly on our own. There was no “long-term” plan because we were dealing with the present moment. Methods of inquiry became necessary for my survival. Developing a strong gut instinct of what was right or wrong, and setting achievable goals became a way of life for me because of my experiences growing up.

EDUCATION

Were you involved in any groups that helped your educational development?

I was selected as a Posse Foundation Posse Scholar in 1997. I received a full-tuition scholarship to attend Vanderbilt University in Nashville, TN. I was fortunate that Debbie Bial, her team, and the Vanderbilt University admissions staff saw something in me that afforded me 1 of 8 scholarships that over 900 New York City students applied. Coming from James Monroe High School (a school that was decertified the year I graduated) left me ill prepared for the challenges of university. I attended Vanderbilt and struggled greatly. By majoring in Cognitive Studies and with my Posse support, I was able to correct my challenges and face them head on. It wasn't the fear of getting beat-up in the Bronx that concerned me most, it was the fear of not achieving my goal to graduate; regardless of how much I had to overcome academically and socioeconomically to do so and stay at Vanderbilt. My drive to succeed and survive over powered any doubts I had.

After successfully graduating, the next challenge I took on was receiving a Masters in Real Estate Finance and Investment from New York University. I attended a school in the city I loved with my support network close by to help me through any challenges. It was the height of the tech bubble and jobs were non-existent. I got lucky by meeting a classmate who had a successful real estate business in Connecticut who brought me on with a plan. I became the Acquisition Officer for Belfonti Associates, later known as Belfonti Capital Partners. Through this experience, I learned how to create value and make money. What I didn't learn was how to grow a business and create wealth. I struggled tremendously in forming WARD Capital Management, LLC. I thought a couple of good deals and we would be off to the races. Little did I know it would take only one massive bad deal to unravel years of hard work. After this happened, I sat down and did what I knew best: fix the challenge by attacking the issue head on- I enrolled in The Stern School of Business and actively worked on building my business so that I could focus on building long-term sustainable net worth for my family and the community.

DIVERSITY

As a Puerto Rican real estate developer, have you faced any challenges?

I have faced several challenges as Puerto Rican or as an "outsider." Real Estate is a very local business. Assets are typically traded among community members that you trust, grew up with or have a relationship with. I have infiltrated many different communities and WARD has become a known entity, but occasionally there are deals that I am not given an opportunity to invest in because of the lack of history or belief that I can be successful.

FUTURE

What are your plans for your company's future?

The plan for WARD is to grow it to become a self-sustaining business. My goal is that its partners and employees grow it exponentially and that the community we develop will benefit from our presence.

What assets do you plan to acquire?

We continue to seek opportunistic assets that have been neglected and need to be repositioned.

We are focused on delivering luxury and energy efficient housing for families in transition because they have outgrown their current space and are looking to improve their families’ quality of life.

We also pay special attention to those families looking to downsize and preserve their net worth by not carrying the expense of larger and more dated homes by providing luxurious energy efficient housing.

What do you want to be known for in the real estate business?

I want to be known as the premier developer and operator of luxury condominiums, luxury homes and luxury hotels.

FAMILY

What do you do for fun?

I love to play golf and go cycling; they’re pastimes that I enjoy with friends. I am also a big New York Knicks, Giants and Yankees fan so I enjoy cheering for these teams.

Do you have a family?

My wife, Jewelle, and I have a beautiful baby girl named Sira Veronica. And we have a boxer dog named Beans.

MENTORSHIP/ADVICE

What would you tell a young person who is interested in the real estate business? What do they to do to prepare?

Real Estate is a vast industry with many different opportunities. I recommend anyone interested in the field to reflect on who they are as a person and find a match within the industry. Jonathan Poorvu, discusses the different facets of the business in his book, “Real Estate Game” which is a good starting point. If they want a deeper understanding, I’d recommend inquiring about different schools and programs for real estate.

What classes should they take?

Real Estate is a problem-solving industry. People should be able to emotionally digest and respond to someone's needs and address their challenges. Therefore, any classes that help improve your ability to think through problems is critical. Another class worth taking is anything that enhances your ability to apply mathematics to different real estate related situations.

COMMUNITY

What community initiatives are you involved in and why is that important to you?

I'm involved in numerous community activities and local charities. However, over the years, I realize I service my community by focusing on my business which allows me to be a sustainable financial contributor to the programs that uplift our community long term. I mentor many Posse Foundation students and guide them in their career. I support charitable contributions to the Youth Leadership training programs at ASPIRA of New York as well as James Monroe High School.

Who are some of your mentors in the real estate industry? 

Over the years, I have been able to develop a vast network of former CEO's of major companies that have help me grow personally and in business. Michael Ainsley, Stephen Siegel, and Michael Belfonti have been instrumental in my life. 

Stephen Siegel: mentored me throughout High School

Michael Belfonti: former boss and partner 

The Blumenfelds (Brad, Eddie, and David): former employers

Michael Ainsley, Chairman of the Board Posse foundation, Bankers Trust, Sotherby’s, Lehman Bros. and The Lehman Estate: mentor 

Adam Silfen, CIO LeFrack Organization: mentor