Our business is built on relationships – relationships with our sponsors, partners, brokers, lenders, property managers, attorneys, accountants and investors. We pride ourselves on our ability to communicate, develop cooperative relationships and deliver on our promise to provide quality housing to our tenants and strong returns to our team.
Our Investment Thesis
We focus on areas with positive population and employment data including growth rates, household formations, household incomes, age brackets, education levels, diversity of employment and more.
Our focus is concentrating on acquiring assets in supply constrained submarkets with high barriers to entry. Assets in markets with highly rated schools, low crime rates, and access to retail and employment centers are idea.
We prefer to acquire Class B & C+ communities which attract the widest demographic, including middle-market and workforce housing. Core-plus, assets that provide stabilized cash flows and near value-add risk adjusted returns are of high interest. We prefer to acquire well constructed garden style or mid rise apartment assets that are not functionally obsolete that also have competitive amenities.
We underwrite utilizing comprehensive pro forma and sensitivity analysis to fully understand the actual & potential performance of an acquisition with an emphasis on stress testing the model to estimate future impact on a property’s potential return.
We also focus on understanding the full story behind an offering—What drives the value? What is the hidden potential value, and what is the cost of improving the asset in order to achieve it’s fullest potential value? What makes owning a particular property attractive now?
Why Multi-Family?
Simply stated – people will always need a place to live. Land is scarce in many cities and the population continues to grow as children move out to form new households, in-migration continues in large numbers and aging baby boomers live longer.
Growing Demand
The principles of supply and demand have created the perfect opportunity for multi-family investing. The overheated housing market, credit crunch and downturn in the economy have caused a virtual halt in new construction. This trend is likely to continue until demand and values exceed the cost of new construction, which, in the interim will significantly diminish supply.
Why Value-Add?
Most stabilized multifamily properties are owned by institutional investors as a hedge against inflation. In order to maximize our investors’ returns in the current market, we focus on adding value to our acquisitions in one or more of the following ways:
- Improving management
- Increasing occupancy
- Upgrading units and increasing rents
Multi-family vs. Other Investments
In most markets, multi-family has proven its resilience during this recession. Multi-family fundamentals have been the most stable of any asset sector throughout the downturn. Multi-family is going to remain the strongest sector during the next few years. (Marcus & Millichap).
Why Now?
Multi-family fundamentals have been the most stable of any asset type throughout the downturn. The return of millions of households to the rental market after temporary homeownership, the emergence of echo-boomer renters, and a significant drop in new supply will ultimately lead to several years of strong rent growth. There will be increased acquisition opportunities and distressed assets for sale, more than any time in recent history. (Marcus & Millichap 2019 National Outlook)
“Now is the time to look for the bargains and close the deals while the market is in a downturn. A tremendous amount of capital is waiting for well-priced, quality assets to be offered for sale, and many investors have begun to move off of the sidelines. Economic recovery will require several quarters to gain momentum; however, investors awaiting the return of strong economic expansion to redeploy capital into commercial real estate risk missing attractive acquisition opportunities.” (Marcus & Millichap 2019 “Opportunities Emerging for Commercial Real Estate Investors.”)
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