The Art and Science of Real Capital Solutions’ Contrarian Investing Strategy, With Adam Abeln

Written by:

Steve Marcinuk

Date:

24 Mar 2025

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In late 2019, as commercial real estate valuations peaked and most investors continued aggressive capital deployment, Real Capital Solutions (RCS) made an unexpected move. The firm began systematically divesting from office and commercial products, pivoting instead to single-tenant net lease properties. This calculated strategic shift was guided by proprietary market timing technology that indicated potential market stress ahead.

This strategic decision – made months before the pandemic’s impact on commercial real estate markets – illustrates the analytical approach that distinguishes RCS in a sector often guided by conventional wisdom. While they couldn’t have anticipated COVID-19’s impact, their data-driven strategy positioned them effectively for the market disruption that followed. At the helm of these strategic decisions is Adam Abeln, Chief Acquisitions Officer, who brings 14 years of experience with the firm and a perspective shaped by multiple market cycles.

“We get in and out of markets and in and out of sectors when we believe there’s an opportunity,” Abeln explains, describing the firm’s contrarian approach. “What we formulated internally is we have these internal clocks that are proprietary to the business. We have a clock on apartments, office, retail, industrial, and these are clocks that we use, and they’re all automated now.”

The Science Behind the Strategy

What distinguishes RCS is their integration of market experience with sophisticated technological tools. Their team of 55 professionals brings nearly 500 years of combined experience – expertise that shapes their proprietary market timing technology. These “market clocks” function as sophisticated tools that help the firm identify inflection points in different property sectors, often ahead of conventional market indicators.

The analytics-enhanced approach has guided RCS to their current strategic position: actively acquiring office properties at what they believe represents a generational buying opportunity. While current narratives question the future of office space and many institutional investors remain cautious, RCS is securing properties at 50% or greater discounts from previous trading prices, with going-in cap rates exceeding 10% on buildings that are 60-70% occupied.

“If you compare that to coming out of the great financial crisis, we weren’t getting similar discounts for the quality of assets we’re buying in this cycle,” Abeln notes. “We’re also seeing a lot healthier yields going into deals in this cycle versus the last cycle, where the yields were almost non-existent.”

Market Analysis Beyond Conventional Wisdom

RCS’s approach to the office market demonstrates their capacity to identify underlying value beneath market narratives. While acknowledging the real challenges facing the sector, including hybrid work adoption and capital markets constraints, they see opportunity in what Abeln calls “zombie buildings” – quality assets trapped in broken capital structures.

“The problem is that they have capital, but it no longer makes sense for them to deploy it within that building, because they’re so far upside down,” Abeln explains. “That’s what we’re finding – there’s a lot of these kind of zombie buildings out there, great buildings with a broken capital structure. And so if we can go in, reset the basis, but then we have that capital to deploy, we can find those tenants.”

Balancing Institutional Analysis with Agility

RCS has successfully combined institutional-quality analysis with the decisiveness of a smaller firm. While their larger competitors might identify similar opportunities, they’re often constrained by committee structures and existing portfolio challenges.

“Some of our competitors are now seeing the signs that there’s an opportunity there. The problem is they’ve got funds, big committees, and they can’t adjust to the opportunities because they’re looking in the rear view mirror,” Abeln observes.

Strategic Positioning for Market Evolution

RCS is already analyzing their next strategic move. While many investors view multifamily as a relatively stable sector, RCS anticipates significant changes. “We’ve been negative on multi-family for quite some time,” Abeln reveals. “We actually believe that there’s going to be a great opportunity to come into multi-family this next year where we’re going to start seeing substantial discounts.”

The firm monitors several key factors: substantial new supply entering the market, operating expenses outpacing rental growth, insurance cost increases (particularly in coastal markets), and persistent high interest rates.

RCS exemplifies an emerging model in institutional real estate investing – where market experience combines with data analytics, where contrarian positions stem from rigorous analysis, and where nimble execution meets institutional standards.

“We’re a forward-looking company, and we’re always going to look ahead to see what the best opportunities are,” Abeln concludes. Their approach to finding value in market complexity continues to set them apart in an industry where timing and analytical precision increasingly determine success.