[EO Silicon Valley] Real Estate’s Best Kept Secret: Land Development Investing With Alice Chen

Alice Chen is a Partner at Pender Hastings Capital, a private equity firm specializing in niche, high-return land development investments in the US and Canada. She is also the Founder of Alice Chen Companies, a portfolio of ventures spanning international trade, financial services, consumer products, technology, and investment management. A former mergers and acquisitions attorney, Alice transitioned her legal expertise into capital allocation across private equity, venture capital, and tax-advantaged strategies. Her work has been featured in major outlets including The Wall Street Journal, Forbes, LA Times, and Success Magazine.

Here’s a glimpse of what you’ll learn:

[4:06] Alice Chen explains Pender Hastings Capital’s approach to solving big problems in real estate
[11:17] What makes land development real estate’s best-kept secret
[13:18] Alice shares her entrepreneurial beginnings
[16:56] How Pender Hastings structures its funds to diversify projects and minimize risk
[30:41] Alice talks about how timing can make or break company exits
[32:54] Insights on raising capital, investor trust, and balancing risk with opportunity

In this episode…

What if one of the most profitable opportunities in real estate was hidden in plain sight? Many investors chase multifamily developments or single-family rentals, but few explore the less obvious paths that can generate outsized returns. Could the real secret to long-term growth lie in a strategy most people overlook?

According to Alice Chen, a seasoned investor and private equity fund manager, the real estate industry’s best-kept secret is land development. She highlights how a shortage of millions of single-family homes in the US has created an urgent demand for finished lots, which national homebuilders rely on to expand. By partnering with best-in-class land developers and focusing on large-scale problems like housing deficits, she explains how investors can minimize risk while achieving strong returns.

In this episode of the Rising Entrepreneurs Podcast, host Dr. Jeremy Weisz sits down with Alice Chen, Partner at Pender Hastings Capital and Founder of Alice Chen Companies, to talk about land development investing as real estate’s best-kept secret. Alice shares why major homebuilders outsource this process, how her team structures funds to manage risk, and why timing is crucial in achieving profitable exits. Alice also discusses her personal routines that keep her grounded as an entrepreneur and investor.

Resources mentioned in this episode:

Quotable Moments

“Real estate is actually hyperlocal, so what works for one market does not necessarily translate.”
“There’s actually a deficit of 4.8 million single-family homes in the United States today.”
“This is real estate’s best-kept secret. How come we didn’t know about it, right?”
“Whoever harnesses capital can do a lot of good things and could do a lot of big things.”
“We wanted to raise a fund maximizing capital return by minimizing risk across multiple projects.”

Action Steps

Focus on solving big problems with capital and strategy: Targeting large-scale challenges creates opportunities for meaningful impact and sustainable returns.
Diversify across multiple projects in a fund: Spreading investments reduces risk exposure while maintaining the potential for strong overall performance.
Build partnerships with best-in-class operators: Collaborating with proven experts enhances execution, strengthens relationships, and ensures access to valuable industry networks.
Pay attention to timing in market cycles: Recognizing when to enter or exit investments can dramatically affect profitability and long-term outcomes.
Invest in personal routines that strengthen decision-making: Practices like meditation, gratitude, and fitness foster clarity, resilience, and focus for improving business leadership.

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Episode Transcript:

Intro: 00:02

Welcome to the Rising Entrepreneurs Podcast, where we feature top founders and entrepreneurs and their journey. Now let’s get started with the show.

Dr. Jeremy Weisz: 00:12

Dr. Jeremy Weisz here, Founder of InspiredInsider.com, where I talk with inspirational entrepreneurs and leaders. Today is no different. I have Alice Chen of AliceChenCompanies.com where you’ll see she’s got a portfolio of companies and Alice is quite a background and she’s got a diverse set of companies in her portfolio which we will go through. Alice, I always like to before I formally introduce you, I always like to point out other episodes of the podcast people should check out.

You know, since this is going to go on Inspired Insider also Rising Entrepreneurs where we feature top EO members. Some of the top EO members I’ve had on the podcast include Mark Bealin, where he talked about driving digital dominance. He’s got an agency I also had on Mike Maddock. He talked about innovation and conquering business plateaus, and that was a great episode. Also, Michael Attias was a SaaS company, caters in a SaaS company, else for restaurants to offer catering, you know, and that was a great one.

There’s many more on inspiredinsider.com and check it out. This episode is brought to you by Rise25. At Rise25, we help businesses give to and connect their dream relationships and partnerships. We do that in two ways. One, we’re an easy button for a company to launch and run a podcast.

We do the strategy, accountability, and the full execution and production behind the scenes. Number two, we’re also an easy button for a company is gifting. So we make gifting and staying top of mind to your best clients, partners, prospects, even staff very easy. You just give us the addresses and we do everything else. Everything’s branded to your company, you know else we call ourselves the magic elves that run in the background and make it stress free as possible for companies to build amazing relationships so they can focus on running their business.

And for me, over the past decade, I have the number one thing for me is relationships. And I found no better way over ten years plus to feature the people I admire in my podcast and also send them sweet treats in the mail so you can go to rise 25.com or email us at support at rise25.com. I am excited to introduce Alice Chen. She’s an investor, private equity fund manager and much more.

And over the past 15 years, she’s founded, scaled and successfully exited multiple businesses. We could say across international trade, financial services, consumer products, technology and investment fund management. She’s been featured in major publications like The Wall StreetJournal, Forbes, Canadian Business, LA Times, and Success Magazine. She, like my business partner John Corcoran, was a practicing attorney, and I guess John calls himself a recovering attorney, but she transitioned from practicing as a mergers and acquisitions and securities attorney and parlayed her skill set into investing across, you know, allocating capital across private equity, venture capital, tax advantaged strategies and public equity. She’s a partner at Pender Hastings Capital, which is a private equity firm specializing in niche, high return land development investments in the US and Canada.

I had to get all that in because it’s impressive, Alice, but thanks for joining me.

Alice Chen: 03:28

Well, thank you for having me.

Dr. Jeremy Weisz: 03:30

You know, what’s interesting is I want you to talk about, you know, Pender Hastings and what you do. And there’s a couple key things that you point out when I’ve done my research is one, you talk about there’s a big moat, right? There’s actually a big barrier to entry, which is always good in a business. And also, do you plan for the exit from the get go? So those are two things that are kind of music to my ears with what you’re doing.

So talk about Pender Hastings capital and what you do. And I’m going to pull up your, your site as we as we talk.

Alice Chen: 04:06

Sure. Yeah. And thanks for doing research. I love that I was your workout companion in the past week. So clearly you’ve done your homework.

So as you said, I’m a partner at Pender Hastings Capital. We are a real estate private equity firm. We have strategies in both Canada and in the US. So as a private equity firm, what we’re looking for are big problems to solve, big problems to solve with capital as well as strategy. And real estate is actually hyper local.

You know, I’m sure yourself and also people in the audience that have invested in real estate, you would know that what works for one market does not necessarily translate to another. So for us in our home market, which is Vancouver, Canada, what we do is specifically something called multiplex development strategy. So it’s a subset of multifamily development. And what happens in Vancouver is that because of the lack of housing, the government passed a new law about two years ago to exempt zoning. If you want to convert a single family home lot into a multiplex, meaning a four plex, a five plex or six plex, right?

So that works for cities that have very confined land to build on. So urban centres like Vancouver and then, you know, going south into Seattle, a Bay area, San Diego, we call it Adu accessory dwelling units. So Adu increasing density through Adu build outs. That’s what we the term we use in the states. But in Canada we call it multiplex development.

So we have a fun family that’s focused on that. And in the States, my business partner James, who you see here on the, on the, you know, on the website, We’ve spent the last couple of years actually taking our time to look into different potential strategies. So in 2022, James actually spent the entire year in Texas, mostly around Dallas area, looking at value add multifamily. But of course, we know that the interest rate started to hike up in the second half of the year. And so with that happening, as well as some of the rents falling in certain geographies, that basically wiped out a lot of the equity in the deals in multifamily.

So that makes that strategy not a thing to pursue. Right? So then since then we, you know, focus on the Canadian strategies and then looked at different things. We looked at building single family homes in Florida in scale, you know, build to rent communities. We looked at different things.

And I would say sometimes in business, you, you just kind of encounter a lucky break. And that’s kind of what happened to us. So about a year ago, I attended a conference, a real estate conference, and I bump into a best in class land developer. So we are now capital partners to best in class land developers in the country. In the US that turn raw land into finished lots for national home builders like the D.R. Horton, Lennar, Toll Brothers.

These really scaled home builders. And so we land development is not something that you hear about every day, right. So certainly, you know, in everyday conversations it’s rare that someone would be talking about that. And so it feels to me that well, one, it’s a very refreshing thesis. And we like a big problem.

It’s a big problem because I don’t know if you know, but there’s actually a deficit of 4.8 million single family homes in the United States. And that is partially or mostly due to the the trend of under-building since the last financial crisis, you know, of 2010. So builders halted the build outs as well as the kind of went into this pattern of under building, and that created this pent up demand of single family homes. And so yeah, so we, you know, as a private equity firm, we want to look at a problem that’s big enough that we can solve with capital n strategy in the coming three, five, ten years. Right.

Because we’re putting in all this infrastructure, human capital bandwidth into studying something. So we want to have a return on that on that investment. And so that’s why we decided to focus on land development. And I’ll talk about the moat as well as the built in exit. So why is there a moat.

Well it’s because well one, it’s hard to break into that industry. So typically people become land developers because they are from construction background. Or maybe they are in some type of development projects, and they just started to do a lot of land development and notice that they have an advantage in that, right. So due to their team, due to their skill set or temperament relationships, they they then find themselves wanting to really focus on that. So our best in class land development operating partners have very long standing relationships with these national home builders.

So D.R. Horton is a very interesting company, $35 billion annual revenue company backed by Warren Buffett, for example. It’s a public company, you know, a multi-billion dollar market cap company. So for them, such a, you know, at a such a big company scale 81 profit centers across USA, guess how many homes, guess how many homes they they typically build in a year?

Dr. Jeremy Weisz: 09:39

I mean, I’ve listened to you so many times, so I actually know the answer to this, but usually you say 90 to 100,000.

Alice Chen: 09:46

So yes. Okay. Very good. Yes. Yeah. So I mean, that was a surprise to me because I would think a company at that kind of scale they would be building at least.

Dr. Jeremy Weisz: 09:55

If you if you asked me and I didn’t do the research, I yeah, I would, I would say like a half a million. I mean, I don’t know based on what you’re saying, the stats are, you know.

Alice Chen: 10:05

There you go. Yeah. So we’re talking about all these home builders needing pads to build their homes, and the reason why they don’t like to do the land development themselves is because ownership of land while you do entitlements or while you do horizontal developments, that actually shows up. The ownership of land shows up as a liability on your balance sheet. So they tend to want to outsource this part to third parties. So yeah. So that’s why we saw this opportunity.

It’s a very tight knit group of people that just focus on land development, pure play land development, where they, you know, by, let’s say they buy an entitled piece of land from a home builder at $30,000 a lot, and then they sell it back to the home builder $70,000 a lot once they put in the roads and infrastructure. So such a thing is called horizontal development. Yeah. So it’s.

Dr. Jeremy Weisz: 10:57

I’m curious. When you were at the conference, right. Someone speaking, you could just I’m sure there were a lot of people at the conference that didn’t do anything with the information. Right. And you actually saw what you see in that short period of time that the person was talking that you’re like, I think this is our next big thing.

Alice Chen: 11:17

Well, I mean, that’s kind of the secret sauce of being in the investment business, right? You’re constantly scouting for something that’s different, something that has alpha, right? So for me, well, one, I’ve never heard of it. So I’m intrigued about something that I didn’t know. So that kind of piqued my interest.

And, you know, wanted you know, I felt this urge to learn more about it. And, well, this person that I met at a conference seems to have done really well doing this. And so the more we dug into it, it took us about eight months of operator due diligence, like we began a dialogue with this party, and we met every two weeks or so, literally, with no kind of business in mind and just got to know each other, got to know the business. The more we learned about it, the more we’re like, wow, like, this is real estate’s best kept secret. How come we didn’t know about it, right?

And, I mean, there’s incentive for people in this field not to talk too much about it because they want the business to themselves. Like our best operator, they have businesses across the Sunbelt states, like multiple states, like, you know, hundreds of millions of, you know, Project value pipeline. So if you can execute at that scale, like, why, why share the pie, right? So I don’t think there’s much incentive for, for the people in this space to be talking too much about it. But for me, it was it was just kind of a rare unicorn combo of, okay, hearing something new, something that kind of makes sense just based on what I know about the economy and where we are in the economic cycle.

Meeting an operator that seems to have done really well for himself and, you know, just kind of liking all these elements. So it’s no different than when you’re, you know, if you’re working in entertainment, you’re scouting for a new, I don’t know, Taylor Swift or some pop star or, or an actor. You just kind of have it. You kind of hone the instincts over time and you just kind of know you, you know something special when you see it.

Dr. Jeremy Weisz: 13:13

Totally. And talk about how did you meet James?

Alice Chen: 13:17

Yeah. So James is actually my original mentor in finance. So I, I think before we started recording the podcast, we were talking about just kind of what I’ve done. So I’m an entrepreneur that is driven by passion. So I go where my passion goes. You know, I, for example, would not ever see myself owning a toilet manufacturing company because I’m not passionate about toilets. I never will be.

Dr. Jeremy Weisz: 13:45

I’m passionate about bidets, actually. So.

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[EO Silicon Valley] Real Estate’s Best Kept Secret: Land Development Investing With Alice Chen

[EO Silicon Valley] Real Estate’s Best Kept Secret: Land Development Investing With Alice Chen

Here’s a glimpse of what you’ll learn:

In this episode…

Resources mentioned in this episode:

Quotable Moments

Action Steps

Sponsor for this episode…

#1 Our Predictable Podcast ROI Program

#2 Our Comprehensive Corporate Gifting Program

Episode Transcript:

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