Joe Muratore and Ryan Swehla

Graceada Partners’ “secret weapon” is the partnership between Joe Muratore, CCIM, and Ryan Swehla, CCIM, CPM. The principals and co-founders of Graceada Partners have advanced a partnership built on 35 years of friendship and mutual respect. This background and approach allows them to challenge each other and create an environment that fosters competitiveness and innovation while limiting confirmation bias in investment and market analysis.

With a specific focus on Central Valley office buildings and shopping centers, the commercial real estate investing firm has $450 million in assets under management. Graceada Partners’ investment thesis is based on the underlying belief that California’s Central Valley, the fastest growing region in the state, is a fundamentally overlooked market for value-add commercial real estate investment. And their model is straightforward: they acquire value-add office buildings and shopping centers in great locations that are in need of the capital and expertise that the firm is very experienced at providing.

Joe and Ryan’s 35 year friendship and 15 year business partnership is what they see as the key to their ongoing success. They approach investing and running a company with an attitude of mutual respect and that allows them to challenge each other and create an environment that fosters competitiveness and innovation while limiting confirmation bias in investment and market analysis. This partnership and the resulting company culture has allowed the company to become excellent at finding and completing successful investments that deliver outstanding returns to their investors.

Where did the idea for Graceada Partners come from?

Ryan Swehla: From day one, we’ve always looked to investing and commercial real estate. We started the business doing third-party work and management. We leveraged that experience to start doing this for ourselves.

You could say the idea to be business partners started on the playground of Fremont Elementary School! After going through schooling, Joe and I both spent time in the investment world and realized that we wanted to do it together.

Our area is typically in the shadow of San Fran and LA. One thing that was important to us: We’re able to do great work here in a corner of California that’s under-appreciated and somewhere we’ve always called home. We feel that there are much bigger opportunities in the Central Valley, especially for younger investors.

What does your typical day look like and how do you make it productive?

Joe Muratore: It changes every day. As an example, today I’m at a really large apartment complex. It’s near another one we are buying. Typically, I talk to brokers and sellers in the market. I’m a very tactile person. I like to really experience the real estate we’re looking to invest in. I see clues in being at the real estate that you won’t see on paper or online. I like to spot things that we won’t see in brochures.

Ryan: I spend the day working with investors, working with lenders and cultivating relationships with new lenders and investors.

A lot of entrepreneurs struggle with being in an echo chamber — they are trapped in a world of people validating their decisions. What’s great about our relationship is Joe and I challenge each other to make the best possible investment decisions.

How do you bring ideas to life?

Ryan: I find what ends up happening is one of us will have ideas about the direction we need to go. In that process, we land on what strategy we want to pursue. It starts with an idea in one of our heads. Through that vetting process, we get to the fully formed process.

Also, we view buildings as a work of art or a masterpiece. I can look at a blank sheet of paper and create a symphony by driving to a building and see paint that’s chipping, cracked parking lots and sad-looking trees, along with an outdated lobby, and we can envision what the building could look like.

We can walk through a building and see where those opportunities lie to ensure the building is a good investment.

What’s one trend that excites you?

Joe: The generational shift in wealth that we’re witnessing. People who are in their 60s and 70s are aging and transitioning. And yet, every building needs to be owned by someone.

Ten years from now, pretty much 60-70 percent of the people in it now will be out of the business.

It opens up more opportunities for us as we look ahead. We’re trying to build that right mix. We want to build the most robust portfolio to navigate the waters as we see them. We’re always looking to that next investment, and as properties hit the market, we evaluate what makes sense for us and will have a strong return. It’s really exciting

What is one habit of yours that makes you more productive as an entrepreneur?

Joe: Do something to add value every single day. Never stop working until you do something that has truly added value.

Ryan: I’ve learned to recognize email and text messages are someone else’s agenda and not mine. What I’ve worked on is having the discipline to not check email and text messages except when I need to.

What advice would you give your younger self?

Ryan: It’s hard to find something that I haven’t learned from. But I can think of plenty of blunders and business mistakes and we wouldn’t be where we are today without those.

Joe: Yeah, I can’t imagine a better outcome than where we are now. I will say this though: I would tell my younger self to watch out for the lessons. That way, we would have learned some of those right away!

Tell us something that’s true that almost nobody agrees with you on.

Ryan: The Central Valley is a fertile and productive place to be investing and doing business and we would much rather be doing what we do here than in any of the other parts of the safe.

Joe: Wherever the crowd is headed, I almost always look to go the opposite way. This has been the single most productive month in our company’s history. The marketing initiatives, the fundraising, the deal finding are all totally on track.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Joe: To paraphrase Tim Ferriss, you can measure success in life by the number of difficult conversations you’re going to have. We all have to have difficult conversations if we want to achieve our goals. It’s part of life. Always just dial. Pick up the phone and talk to someone. Accept your piece of pain, lean into it and dial. You can’t think of it for two days. The faster you lean into pain, the faster you can move through it.

What is one strategy that has helped you grow your business?

Ryan: We have always invested up in the caliber of people we hire. And we’ve always earned more on the additional investment. If you invest more into people and bring great teams on, you will get back more in return. It’s truly a joy to work with high-caliber people and I encourage your readers to always hire up.

What is one failure you had as an entrepreneur, and how did you overcome it?

Ryan: One major failure — focusing on top line growth versus bottom line profit. It’s a very common early entrepreneur’s ailment. We ultimately solved it by making hard decisions by paring back lines of business that weren’t profitable.

Joe: We had businesses with thin margins and high head counts that we took pride in. Ultimately, we decided to pare those down and focus on our investment business. Our appearance to the world was cut but our profits skyrocketed.

What is one business idea that you’re willing to give away to our readers?

Joe: So many people are service providers. But, wealth creation and business production happens when you apply capital.

Ryan: As an entrepreneur, value the time that you are investing in each of your divisions.

What is the best $100 you recently spent? What and why?

Ryan: On Friday, I’m going on an undercover haircut with my two sons and have $100 in my pocket.

Joe: I recently bought aero bars for my bike that make me two miles faster.

What is one piece of software or a web service that helps you be productive?

Joe: CoStar — it has data on every building. It helps us see the market in real-time, essentially the Bloomberg terminal for our business.

Ryan: Juniper Square — it’s an investor management software. Sort of a CRM to help us with our relationships.

What is the one book that you recommend our community should read and why?

Joe: Traction by Gino Wickman. Just about any small or medium businesses would get value implementing the processes in this book. The “Entrepreneurs’ operating system” (EOS) is incredible. As soon as you read it, you’ll understand how to create an even more efficient and effective business. We could translate so much of our growth to what’s said in that book.

What is your favorite quote?

Ryan: Joe alluded to it earlier, but it bears repeating: “A person’s success in life can usually be measured by the number of uncomfortable conversations he or she is willing to have,” Tim Ferriss.

Joe: “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena,” Theodore Roosevelt.

Key Learnings:

• You need to have uncomfortable conversations to grow as a professional and person
• As an entrepreneur, value the time you’re investing into every part of your busienss
• Do something that adds value every single day