How We Do It
Our Multi-Family Alpha® strategy combines a proactive management style with a meticulously researched approach to the market to consistently maximize value, mitigate risk and deliver superior results.
We acquire primarily stabilized assets with operational and financial value-add that are selected based on our ability to generate excess risk-adjusted returns. These returns are “above the line” on the standard real estate risk-return spectrum, so we deliver higher returns for less than expected risk and realize a high Sharpe ratio relative to alternative return benchmarks. Our strategy leverages our unmatched local reputation, access to off-market and pocket listings, in-depth market research and vertically integrated structure. All our assets are well protected from external market downturns and our business model is designed to produce significant current cash returns in any operating environment.
We utilize a thematic, macro approach to first assess markets (particularly secondary and less efficient ones) and then identify specific deal opportunities where we can:
- acquire sound, cash-flowing assets at attractive prices,
- reposition and orchestrate value-add improvements and
- restructure, improve and/or refinance distressed properties.
We utilize intensive, proactive asset management to:
- manage risk to preserve investment value,
- maximize the investment performance of each asset and
- enhance long-term asset value
Multi-Family Alpha®: The Right Strategy for the Right Markets
Why Workforce Housing?
Workforce residents cannot obtain subsidized housing and cannot afford homes/new construction apartments.
- 80% of rentership demand growth through 2025 is from renters making less than $75K
- Growth in workforce jobs is outpacing workforce housing supply by 8x, leaving a supply deficit of more than 300,000 units per year
- Preserving and improving naturally-occurring affordable homes for hard-working Americans generates positive social impact
There are numerous less competitive, undervalued secondary markets close to more competitive, highly priced markets where we have demonstrated ability to generate superior deal flow from off-market or pocket listings and other special situations.
- Stable occupancy, dense populations, high walkability and/or convenient transit access
- Large affordability gap between renting and owning due to supply-demand imbalance
- Diverse and stable employment centers with large workforce populations and high rentership rates
NYC, Philadelphia, DC, Boston
- Affordable housing massively undersupplied
- Dramatic rent increases/chronic housing shortages/low vacancy rates/ownership out of reach
- Urban residents delaying out-migration
- Housing demand driving construction costs and new construction home prices to record highs
Transitional Neighborhoods, In-fill Locations, Accessible Suburbs, Secondary Cities
- $ billions of infrastructure, commercial, housing and mixed-use development
- Significantly discounted rent; 10-75% less than “downtown”
- Increase in in-migration, household formation, population, workforce and wage growth
- Hundreds of thousands of units with transit access, lifestyle benefits and/or better affordability
- Class B/C units with rehab or repositioning potential; new units nearby often rent at 30-50%+ premiums
- Opportunities to buy at cap rates between 5.5% and 7.0% with 30-100%+ discount to replacement cost