Growth Through Partnership: How I Grow When the Team Runs Out

I am going to repeat an opening line from a previous letter: a pipeline is not a list. You cannot be great at everything at once.

So what is a pipeline? It is the qualified opportunities you can execute on, based on your criteria and your internal capabilities.

But what if your internal capabilities run out, or do not exist? What if you do not have the time to resource a deal, or the operating cash flow to cover the overhead? What if you have the capital, but for strategic or personal reasons you do not want to build an organization to execute?

In every one of those cases, partnering is the alternative I use. Last week I outlined the 3 ways I have grown: developing on land, acquiring operating assets, and partnering with other operators. This is the partnership letter.

I first learned this as a young banking analyst at KeyBank Real Estate Capital, making commercial mortgage-backed securities (CMBS) and credit tenant lease (CTL) loans to the preferred developers of national drugstore chains like CVS and Walgreens.

I will never forget visiting a client who owned a gas station and finding him behind the counter, ringing up bags of chips and cups of coffee. He knew what I was thinking, and he said, "Ah, you didn't think this is what I did every day?"

He was proud of one thing: he had assembled the right team, including an attorney who also represented a local billionaire, and that team secured him a Walgreens lease on the site next to the gas station he ran.

My first thought was, "If this guy can be a developer, so can I." That was not the point. The point was what Walgreens and CVS had decided: to grow through preferred developers rather than build the stores themselves. Many of our clients were official preferred developers, and most owned double-digit portfolios of drugstores.

Why would a drugstore chain, or any corporate operator, do that? Because the operating business is where they make their money, and every month spent building a development organization is a month of store revenue they do not collect. The chains had real estate teams, and they kept their standards and approval rights, but they did not develop the rollout themselves. Preferred developers were their distribution channel: stores open faster, operating cash flow sooner, and in the deals I financed, the developer, not the chain, put up the construction capital and earned it back through the lease.

I ran it myself at Brookwood Hotels, the Brookfield subsidiary where I was tasked to grow nationally through land development. It took us 2 years to build the pipeline we wanted, and then the pandemic hit in 2020. With that much uncertainty and a shortening horizon to exit, new development through our internal team became a non-starter.

So how was I supposed to grow? Beyond acquiring operating hotels and finishing the developments already underway, I took a page from the retail preferred developer model. I divided the United States into 4 quadrants and pitched the board on a partnership model. We grew in a much shorter period of time than internal development would have allowed.

Today at Eternal Companies I run a similar strategy, in a different way, for different reasons. Without a Brookfield badge, I have to prove myself to new relationships and qualify the ones I enter, because the wrong partnership burns too much time.

That is why I built an advisory practice. A Platform Edge engagement starts with a platform problem the client and I agree to solve, and it is a practice run for a partnership. It is paid on a retainer, and in some partnerships the retainer continues; in others the structure is contingent and I am paid when the deal closes. The paid work has to stand on its own whether or not we partner. So far, every client I have worked with has wanted to partner. The $200+ million deal I wrote about in August began as an advisory engagement with an international family office. That work produced the partnership we explored, more than $100 million in equity term sheets, and a deal at the edge of closing.

​No team, no platform. No platform, no capital. You have to know who you are and choose your operating model. Mine is third-party execution and low overhead, which makes time my most expensive currency, so advisory converting to partnership is my distribution channel for a qualified pipeline.

Should you partner? Here are 8 questions you can answer today.

1. What is your edge? Your business model and your internal capabilities, in one paragraph.
2. What is your primary competitor's edge? Same question, about them.
3. What type of deals do you win against them, and what type do you lose?
4. Are the deals you win profitable?
5. What capability would need to be in place to scale the profitable deals you win?
6. Is there a market large enough to scale into?
7. If yes, are the deals still profitable after a partner is paid, and does building the internal capability yourself cost more, in time and cash, than partnering to get there faster?
8. Do you have the time and the capability to find and qualify a partner who can supply what question 5 named?

If questions 1 through 6 leave you with a profitable deal worth scaling, and 7 and 8 are both a yes, you have your answer: the deal you could not resource last month is back on the table once a qualified partner commits to it. If 1 through 7 support partnering and question 8 is a no, finding and qualifying the partner is the first capability to add, and it can be hired. If 1 through 6 do not, partnering will not create the edge or the market.

Here is what changes if you act on it this fall.

1. Your pipeline grows without standing up the team to execute it. By January there is a deal in your pipeline that you could not have resourced internally, carried by a partner's team that has committed to it in writing.
2. It is not free, and the deal still has to work after the partner is paid. A good partner is paid: a retainer, a fee, a promote (a share of the profits above an agreed return), or a contingent structure that pays when the deal closes, and that cost is a line in your underwriting. Building that pipeline myself took 2 years and a team we carried whether the deals came or not. Partnering is how you do not spend those 2 years again to get the next one.
3. Your capital and approval rights are written down. The agreement names the decisions that need your approval and your right to walk away before your capital commits.

A pipeline is only the deals you can execute. When your capabilities run out, a qualified partner is how you keep growing without building the organization.

-Damon

Damon C. Healey, Founder, Eternal Companies

I help proven real estate operators build the institutional platform that makes capital come to them.

If you want to pressure-test your platform against an institutional standard, that is what a Platform Edge Session is built for. Book a Platform Edge Session | Get the 2026 IC Stress Test​

P.S. The Eternal Edge lands by email first, every Tuesday: eternalcos.com/the-eternal-edge​

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