John Khoury – Asymmetry and Opportunity in Public Real Estate at Long Pond - Capital Allocators – Inside the Institutional Investment Industry Recap

Podcast: Capital Allocators – Inside the Institutional Investment Industry

Published: 2025-12-01

Duration: 56 min

Summary

John Khoury discusses the undervaluation of public real estate, emphasizing the potential for investment opportunities due to current market trends and the unique position of Longpond Capital in this niche sector.

What Happened

In this episode, Ted Sidies hosts John Khoury, founder and managing partner of Longpond Capital, a hedge fund that specializes in publicly traded real estate securities. Khoury reflects on the current state of the real estate market, highlighting that real estate is perceived as cheap but not well-loved, with the sector down almost 20% since 2022 while the S&P has rallied by 40%. He expresses optimism for the future, indicating he looks forward to witnessing the market dynamics play out rather than just discussing them.

John shares his personal journey into real estate investing, which began in his childhood in a real estate family in Eastern Canada. His father, a Lebanese immigrant, instilled a strong work ethic and understanding of property investment from a young age. Khoury’s educational path took him to Wharton, where he was influenced by the Zell Lurie Center, which laid the groundwork for his career in real estate. He transitioned from investment banking to private equity and eventually found his niche in public real estate, where he believes he can leverage analytical skills to identify and exploit valuation differentials between public and private markets.

Key Insights

Key Questions Answered

Why is public real estate not well-loved currently?

John Khoury points out that despite public real estate being cheap, it isn't favored by investors, as evidenced by its substantial drop since 2022. The real estate sector has seen a decline of almost 20%, while broader indices like the S&P have increased by 40%. This disconnection suggests a market sentiment that undervalues the potential of real estate investments.

What is the significance of asymmetry in Longpond's investment strategy?

Khoury emphasizes that Longpond Capital's investment process is centered around identifying and exploiting asymmetry in the market. This means looking for discrepancies in valuation between public and private real estate assets, allowing them to capitalize on opportunities where the market may not accurately reflect the intrinsic value of real estate companies.

How did John Khoury's upbringing influence his career in real estate?

Growing up in a real estate family in Fredericton, New Brunswick, Khoury was immersed in the world of property investment from an early age. His father's journey as a Lebanese immigrant who built a real estate business instilled a strong work ethic and understanding of the industry, which significantly shaped Khoury's approach to investing.

What prompted John Khoury to shift from private equity to public real estate?

Khoury's transition from private equity to public real estate was somewhat serendipitous. Initially on a path towards private equity, he was influenced by a mentor who encouraged him to explore public markets. Recognizing the potential for growth in public real estate and the opportunity to use his analytical skills in this area, Khoury decided to pivot his career.

What are the goals of Longpond's new active ETF, Ticker LPRE?

The launch of Longpond's active ETF, Ticker LPRE, aims to invest in the most attractively priced stocks from a curated list of high-quality real estate businesses. This initiative reflects Longpond's commitment to providing investors with exposure to undervalued real estate securities while leveraging their expertise in the sector.