Investment Strategy

We focus on acquiring sub-institutional multifamily assets (typically in the $5m - $25m range) with the intention of implementing a value-add strategy. The primary objective is to generate attractive risk-adjusted returns by acquiring properties with the potential for value appreciation through strategic improvements and operational enhancements. We are long-term holders of real estate.

 

Acquisition Criteria

  1. Property Type: The focus is on multifamily assets, specifically apartment complexes.

  2. Size and Scale: Target properties of sub-institutional size, typically ranging from $5 - $25m.

  3. Value-Add Potential: Seek properties with value-add potential through renovations, upgrades and operational efficiencies.

  4. Market Fundamentals: Evaluate markets with favorable demographics, job growth, low vacancy rates, and strong rental demand.

  5. Risk Profile: Assess the risk-reward profile of each investment, considering factors such as market stability, tenant base, and competitive landscape. We tend to avoid markets that have experienced multiple boom and bust cycles.

Value-Add Strategy

The value-add strategy involves making strategic improvements to the acquired properties to enhance their market appeal, increase rental income, and improve overall property performance. Key elements of the value-add strategy include:

  1. Property Renovations: Identify areas for improvement, such as unit upgrades, common area enhancements, landscaping, or exterior improvements.

  2. Operational Enhancements: Implement cost-saving measures, efficient property management practices, and technology solutions to streamline operations.

  3. Tenant Experience: Focus on tenant satisfaction and retention by providing high-quality amenities, responsive management, and excellent customer service.

  4. Lease-Up Strategy: Optimize leasing efforts through targeted marketing, effective pricing strategies, and resident retention programs.

  5. Capital Expenditure Planning: Develop a detailed capital expenditure plan to allocate resources effectively and ensure a sustainable value-add approach.

Risk Management

A comprehensive risk management approach is essential to mitigate potential risks and enhance the investment's resilience. Key risk management measures include:

  1. Due Diligence: Conduct thorough due diligence to assess property condition, market dynamics, legal considerations, and potential risks.

  2. Financial Analysis: Perform rigorous financial analysis to evaluate investment feasibility, potential returns, and cash flow projections.

  3. Market Research: Continuously monitor market conditions, rental trends, and economic indicators to identify potential risks and adapt strategies accordingly.

  4. Capital Reserves: Maintain adequate capital reserves to handle unexpected expenses, vacancies, or market fluctuations.

Exit Strategy

In a perfect world, we are long-term holders of every asset and plan to hold in perpetuity, allowing compounding to do it’s magic. The primary strategy to return capital to investors is refinancing to extract equity, in which we still own the building, however other exit options include selling the assets to institutional investors, real estate investment trusts (REITs) or other interested parties.