Industry veteran argues that customization and deep client understanding are replacing traditional product-driven approaches.
The real estate investment industry needs to move beyond standardized investment products toward more customized solutions that truly address investor needs, according to a senior executive with extensive experience across multiple industry segments.
Mike Auerbach, who recently joined Bonaventure to lead their tax-advantaged investment platform, argues that traditional product-centric approaches often fail to serve investors effectively.
“Every client is different. Some people want appreciation, some people want cash flow, some want professional management, it’s super client specific,” Auerbach explains.
This shift requires fundamentally rethinking how investment firms operate, according to Auerbach. “That’s the difference between being an asset aggregator and a real asset manager and advisor,” he says.
He argues that many firms have focused too heavily on gathering assets rather than understanding and meeting specific client needs. “A lot of people put out products that are just better for the sponsor, there’s a lot of challenges in this space on determining what people want.”
This product-first mentality can lead to mismatches between investor needs and investment solutions. Auerbach notes that his firm takes a different approach: “We are not a firm that is offering a blank, generic opportunity for people.”
While customization provides clear advantages for investors, it also introduces major operational challenges for investment firms. Auerbach notes that meeting these expectations is “a heavy lift,” demanding deep client discovery processes to understand unique goals, flexible investment structures that can adapt to different risk profiles, and a robust operational infrastructure capable of handling complex transactions. Equally important are experienced advisory teams who can guide clients through tailored strategies while maintaining efficiency and compliance.
“It’s a lot of hand holding,” he notes. “I don’t know if there’s a group that’s been successful out there to create a repeatable, scalable option yet.”
Auerbach highlights several distinct priorities that consistently surface among his firm’s investors. Many seek strong appreciation potential to build long-term wealth, while others focus on generating stable cash flow for predictable income. Professional management remains a key requirement to ensure efficient operations, and tax advantages play an important role in overall returns. Investors are also drawn to opportunities for co-investment, aligning their capital with sponsors, and increasingly value custom investment structures that reflect their unique risk tolerance and financial goals.
“We are trying to solve a solution for what that person wants,” he explains. This may mean turning away business if the firm can’t properly meet an investor’s needs.
Successfully delivering customized solutions demands extensive investor education, Auerbach explains. Clients must first grasp risk factors that go beyond projected returns, recognizing that headline numbers rarely tell the full story. They also need to understand the importance of sponsor alignment, ensuring interests remain closely tied throughout the investment. Equally critical is awareness of market cycle positioning, which can dramatically influence outcomes, as well as the trade-offs involved in different deal structures. Finally, clear guidance on exit considerations helps investors plan for liquidity and long-term strategy.
While acknowledging the challenges, Auerbach remains committed to pushing the industry toward more customized approaches. His firm is developing new partnership programs and educational initiatives aimed at better serving diverse investor needs.
“We want to standardize just some best practices so people can ask the right questions,” he explains. This focus on education and transparency, he argues, will help create more sustainable investment relationships that better serve all parties.
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