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Fiduciary Responsibility and Strategic Management

A discussion on the importance of fiduciary responsibility, strategic real estate management, and creating tax-efficient investment structures.


HSR's Chairman, Ethan Penner, discussed the importance of fiduciary responsibility and strategic real estate management with CEO Joseph Penner. Ethan praised Joseph's commitment to always prioritizing the best interests of investors, which contrasts with many investment management firms that focus on growing assets under management (AUM) and associated fees, often at the expense of true fiduciary responsibility.

Joseph explained that this commitment to fiduciary responsibility was a key reason for leaving the institutional real estate sector and founding Hill Street Realty (HSR). He aimed to establish a company focused on becoming real estate operators rather than dispensers of capital. By maintaining control over day-to-day operations and the timing of asset transactions, HSR can maximize returns for its investors rather than adhering to rigid institutional cycles.

Joseph highlighted that HSR primarily serves individual investors, which requires a focus on creating the most tax-efficient structures. Recognizing that individual investors face different tax implications than institutions, HSR structures its funds as Real Estate Investment Trusts (REITs) to optimize tax efficiency. Joseph emphasized the importance of understanding investor needs and desires, noting that real estate remains one of America's last effective tax shelters. Consequently, tailoring tax structures to investor-specific needs and desires is crucial for maximizing their returns and protecting their investments.

View the full interview with HSR’s Chairman Ethan Penner here.

Important Disclaimer:

The summaries, descriptions, and content in these videos are for informational purposes only and do not constitute tax, legal, or investment advice. The views expressed are those of the speakers and do not necessarily reflect the official policy or position of HSR or its affiliates. Investing in real estate involves risks, including potential loss of principal. HSR does not guarantee the accuracy or completeness of the information provided in the summaries or videos. Consult with qualified tax advisors, legal counsel, and financial planners before making any investment decisions.

Furthermore, these videos and their written summaries do not constitute an offer to sell or a solicitation of an offer to buy any securities or investment products. Any such offer will be made only by means of official offering documents and in accordance with applicable laws.

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