The city of Austin, Texas has been home to an oasis that’s been known for years like California as Ari Rastegar benefits from new Texas residents.
Who is Ari Rastegar? Zenger News had an opportunity to sit down with the Texas real estate mogul.
Born in Austin, Texas to an Iranian father and a German mother, Ari grew up in Dallas in a working-class family. He was an English major at Texas A&M University, where he graduated cum lade. He would then attend St. Mary’s University in San Antonio for law school earning his law degree.
During law school, it’s where Rastegar got his start in real estate. He borrowed $3,500 and put the rest of his scholarship money towards a small property and started a development company. He would then receive an interim construction loan of $80,000 to build a single-family home with a local developer, after which he would sell the house. Rastegar continued to build homes, and the idea of retiring before graduating would eventually fade.
“I thought I was going to retire before I would graduate from law school,” Rastegar said. He would then mention how he would get out of the real estate business as soon as the sub-prime mortgage loan would come into crisis. “A funny thing called 2008 hit.”
He later received the rest of his scholarship money after working with a local developer. Rastegar moved back to Dallas and reconnected with his old high school wrestling coach. He then relocated to New York City, where he would be in a room with the top real estate executives.
“I started to do odd jobs here and there and worked my way up, finding myself in funny positions helping them with their real estate stuff,” Rastegar said of his experience learning from his New York real estate mentors.
He would then return to Texas, where he founded his company, Rastegar Property Company, in Austin.
As his career progressed, Rastegar later met former President Donald Trump at Mar-A-Lago, during the time after his presidency.
“After he was the president, he spent a lot of time back at Mar-A-Lago,” Rastegar said where he met the former president attending events he hosted. “He was very social, very charismatic, and very outgoing and speaks to a lot of his guests.”
He described his interactions with Trump where he would come to the same table and speak to two to three of the same friends where he developed an informal relationship. Rastegar spent much of his evenings at Trump’s Palm Beach estate for a get-together on social occasions with mutual friends and has described him as an interesting person. Trump and Rastegar shared their outlook on real estate, but nothing about doing business together.
Rastegar caters to real estate trends in the workforce, whereas Trump focuses on the luxury real estate market.
In Ari’s real estate world, he’s looking out for the trends happening in the working world that involves blue collar workers and big tech.
In 2020 before and during the pandemic, a lot of California residents, whether it’s San Francisco or Los Angeles, would leave the state for a much affordable living, mostly settling in Austin. The city of Austin would get companies like Tesla and Oracle catering to mostly big tech. Apple is currently building their campus in Austin.
“We’re building suburban hubs and commercial properties catered toward the blue collar American and grow tech hub cities,” Rastegar said of his vision.
He bought a 600,000 square foot lot several years ago something he would leave to his kids. Go five minutes up the block, Tesla’s Giga headquarters open not too far from his property.
Rastegar Property Company now owns a 318-acre property centered on the concept of Futuristic Suburbanism, for which Rastegar owns the trademark. This idea revolves around how people will live, work, play, entertain, and educate in a much smaller pocket economy in a post-COVID world, which includes commercial real estate.
“The point is to create an identity in a smaller pocket economy in the event of another pandemic and change where shops and hiking trails are in walking distance,” Rastegar said about his vision of Futuristic Suburbanism.
Elon Musk bought property outside of Austin in a town called Bastrop. This is same concept Rastegar is creating in the Austin suburb of Kyle, Texas.
“I would say they’re doing the same thing, they’re about a year and a half behind. That’s what Futuristic Suburbanism really is, and we’re breaking ground next week,” Rastegar said about Musk’s land purchase in Bastrop.
His company started 5 years ago before Musk would talk about purchasing land where people work and live in the same area.
Since California exodus, many California ex-pats have migrated to Austin, which have similar feels. The joke, you can get to Texas from Austin in about 20 minutes and Austin isn’t in Texas that draws the same socio-political path. The beautify dialogue that Rastegar says, “The outer core of Austin tends to be very conservative, while the inner urban core of Austin tends to be liberal.”
The city of Austin has been an easy transition for many Californians as the town is built on lakes and parks reminding ex-pats a lot of the Golden State. Then again, it’s the perfect opportunity for Rastegar to look out for the blue-collar and tech worker getting away from California’s sky-high prices.
Rastegar believes that being a good business executive is all about taking transparency seriously. Rastegar had a positive reaction to the books he read by former President Trump, including the Art of the Deal.
What is important to success, learning from mistakes and the missteps including his own and people around him.
From Rastegar’s perspective as an entrepreneur instead of a deal, building relationships has been the key to success. At the same time, any entrepreneur must be forthright while keeping a tight circle.
In Rastegar’s upcoming book, the art of the relationship is the key to having repeat business that includes investors, banks, and owners to understand and build trust.
What is Ari’s view of the Trump indictment?
“The first thing that comes to mind has nothing to do with him. Being an American, watching a former president dealing with these types of issues is very distressing. I don’t think it’s very good for the republic,” Rastegar said in a response about the Trump indictment.
As an American, he’s clearly concerned about what’s going to happen next, regardless of the outcome. There wouldn’t be any impact on the real estate market.
What’s Ari’s concern in today’s economic climate with inflation going up and the collapse of Silicon Valley Bank?
“Look, rates going up is always a concern. Cap rates are very correlated to interest rates, what is interesting about rates going up is that cap rates moved as much as they have in the past,” Rastegar perspective on today’s economy.
The biggest thing Rastegar says is learning from all banks, not just the middle banks, that is a systemic issue of how to look at non-market to market securities. There are two main buckets, all the real estate market is guttered by the 10-year treasury from a finance standpoint.
“By garnering the spreads, when you look at the bucks of the non-mark to market 10-to-30-year treasury these banks were holding, the non-mark to market with rates going up as fast as they have caused them massive disparity, but they didn’t have to mark up a balance sheet for non-mark to market,” Rastegar said about the shake-ups in the banks.
As for inflation, Rastegar’s worries have gone down tremendously as the CPI index has gotten under control and inflation has started to taper off. He has one thing to remind the public, inflation was bad over 40 years, at 18% in 1980.
For an entrepreneur like Ari Rastegar, experience and learning from his mistakes got him to the place where he is today. Learning from the best real estate entrepreneurs in New York paid off for him. He is still looking out to make his hometown of Austin a better place as he envisions it.