Kristina Sawyer draws on experience in all aspects of real estate to offer a cohesive product and experience.

When she was young, Kristina Sawyer never thought she’d work in real estate. As it turns out, she’s worked in nearly every aspect of the business, giving her valuable perspective for her role as vice president of lending at Arixa Capital in Los Angeles.

Sawyer grew up in Bakersfield, California, where her mother was a high-performing CCIM in commercial real estate. Though she initially imagined she’d follow a different career path, at age 21, before the Great Recession, Sawyer bought three investment properties—two five-plexes and a four-plex. That investment gave her a taste of cash flow and building generational wealth through real estate investing, and she’s been active in the business ever since.

“I’ve worked in the industry for 23 years,” she said. “I’ve been an investor, been the landlord, lost money in the downturn, made a lot of money. I have exposure to every aspect of the real estate industry. I’ve worked on commercial acquisition teams and started my career as a property manager. So, I’ve touched almost every segment of the industry, and I’ve worked in almost every position.”

Sawyer says her wide-ranging background has been instrumental to her success, particularly in operations.

“What’s made me so knowledgeable is that I’ve worked in so many positions. I understand the mechanics and the pain points, and I bring that to every role,” she said.

Growing with Arixa

Sawyer joined Arixa Capital nine years ago as its third employee. As the operations manager, she helped build the company’s framework from the ground up—the systems, teams, closing and servicing processes and procedures, and the proprietary platform that runs the business.

She says operations was a natural fit. As a problem-solver, she always thinks about how to create better processes and how to make tedious tasks less painful.

“The way my mind works is very systematic. I think I’m an unorthodox thinker,” she said.

Her interest in improving systems benefitted her and the company as she led the development of Arixa’s technology platform. Though she doesn’t have a tech background, she says she enjoyed learning how it works. None of the off-the-shelf solutions had everything she wanted, so she customized based on her likes and dislikes of existing options.

“I consider myself a translator where I understand our business. I built our system, so I understand all the workflows, and then I’m able to translate that to the developers to build it,” she said. “[Other] people may understand our business, but most people aren’t operationally minded. I kind of see the matrix and how it flows.”

Lending New Perspective

As someone who loves a challenge, Sawyer recently moved into her new role as vice president of lending. Rather than operations, she’s now focused on originations and building new product offerings in the commercial and multifamily space. What hasn’t changed is her focus on empowering her team and helping people find the right roles.

“I think a big part of managing and being a leader is not expecting someone who likes squares to be a circle,” she said.

Sawyer’s transition comes at time of company growth. Arixa largely focuses on California and the West Coast, but it has also opened a new Arizona office. Sawyer said the company continues to expand its footprint organically by following top clients as they invest in other markets around the country. The new product she’s creating will be available nationwide. The company also is offering a new product for long-term rental investors. Sawyer said these buy-and-hold investors are often sophisticated buyers who own property portfolios and who didn’t have has many options for loans as other types of investors.

Industry Trends

The COVID-19 pandemic created disruption at many levels within the real estate industry. Sawyer discussed some of the trends she sees taking hold.

First, historically low interest rates are driving the real estate market. During COVID-19 shutdowns in 2020, Sawyer said, there was a brief glimmer of higher rates. Some lenders pulled back, and those who kept lending, like Arixa, could charge about 50 basis points more than they had previously. That only lasted about four to six months, she said, and now rates are low again.

In terms of the market, demand is outstripping supply for single-family homes nationwide. Buyers are paying top dollar while sellers reap the rewards.

“Most of the frenzy is because of low interest rates,” Sawyer said. She’s watching the situation carefully.

Homeowners are refinancing to take advantage of lower rates, and many people are in the market to buy. In the Greater Los Angeles metro, Sawyer said, it makes more financial sense to buy than to rent. While that’s great for the economy, it’s a tough time for some investors.

Right now, she said, there’s more money chasing good deals than there are good deals to be had. For investors who want to flip a property or create added value, paying high prices for properties just doesn’t make sense.

However, there are still plenty of deals being made. Sawyer said lenders are busy, and many are even looking to staff up if they can find qualified candidates. Arixa has been fortunate to hire talented originators during the past year, she said, and they’ve paid off: Arixa had its biggest origination month ever in April 2021.

Last spring, amidst uncertainty, Arixa continued lending, Sawyer said.

“Once we got through the first couple months [of the pandemic], people were buying again,” she said.

Though Arixa had to work with a few borrowers to create forbearance agreements, it’s been fairly smooth sailing for the company.

Sawyer attributes much of the industry’s resilience and continued success to the fact that construction continued during the pandemic. With such low inventory, new construction has filled a need in the market. In Los Angeles, that includes a mix of infill redevelopment through teardowns and greenfield development.

If they had stopped construction, it would have been “catastrophic” to the industry, she said. Homes that were in progress couldn’t be left open to the elements without sustaining damage, so the decision was made to push through and continue the work.

“I tip my hat to the powers that be that made that decision [to keep building], which saved a lot of jobs. That, plus low interest rates, were the recipe for success,” she said.

Another trend in construction is the accessory dwelling unit (ADU)—an apartment or separate building on a residential property that contains its own kitchen and bathroom. Also known as granny flats or mother-in-law suites, these additional living areas add value to the existing property. In Los Angeles, Sawyer said the city is encouraging construction by implementing a one-day permitting process. While the ADUs can provide much-needed housing, Sawyer is interested in the ripple effects. For example, property owners who turn parking spaces into ADUs will exacerbate the scarcity of parking.

Along the same lines as ADUs, some developers are adding density by tearing down existing structures and creating small-lot subdivisions, Sawyer said. Lots that previously had single-family homes could be rebuilt with four condos, for example.

Sawyer said she’s already seeing growth in inland California thanks to work-from-home policies that allowed employees to do their jobs remotely instead of being tied to the metro where their office was located. Workers benefit by getting more home for their money, and the cities may see an eased burden on infrastructure with fewer commuters.

Though Arixa is willing to follow its developers if they decide to chase the boom to new remote-work communities, whether those are suburbs or smaller towns, Sawyer said they avoid “second-home areas,” which tend to have more volatile markets.

Beyond shelter-in-place orders that led to demographic shifts, another pandemic response that impacted real estate investors was the eviction moratorium. Sawyer had several tenants unable to pay rent, with no recourse option to mitigate.

The moratorium also caused many multifamily investors to pump the brakes on new purchases. “Why buy when tenants aren’t paying rent?” she asked.

Still, she expects deal flow to pick up again later this year when renters can no longer defer payments.

This or That?

Text or call? Text. I’m a multitasker, so it’s quick and to the point. But there is a power of the call—it’s just a different experience. If it’s client-related, I’m definitely going to call.

Coffee or tea? I’m not a big coffee or tea drinker. I’ll usually get a dirty chai, which is coffee and tea.

Mountain or beach? I’m a beach girl. I snowboard and love the mountains, but definitely if I have a choice, it’s the beach.

Rain or shine? Definitely shine. In California, we don’t get rain very often, so I actually really enjoy it. But I love the sunshine.

Night owl or early bird? Early bird. I’m usually up by 5 a.m. I meditate and I work out. Those are the two things I have to get done for my day to be right.

Favorites?

Thing to do outside of work:  I love to travel, whether it’s little weekend trips or big trips.

Place to travel: I spent two weeks in Costa Rica (earlier this year). It has the nicest people I’ve ever come across, and it offers everything. I spent a few days in the jungle, a few days at the natural hot springs by the volcano and some days at the beach. It was so clean and lush and beautiful. I was very impressed by the country overall and the people.

Guitly Pleasure: I definitely love sweets. It doesn’t matter if it’s chocolate, ice cream, gummies.

TV Show: Bridgerton, The Marvelous Mrs. Maisel