Multifamily Investment Thesis
Billions of institutional dollars are chasing 150 unit+ properties, settling for compressed cap rates, and overlooking an entire segment of the market. We are currently targeting smaller transactions between $10-40 million where competition is limited and inefficiencies are abundant. Assets in this price range are often overlooked since they require too much equity for smaller, high net worth and regional players, but sit well below the minimum equity requirements of larger institutional owners. Assets in this price range are also often undermanaged since local, less sophisticated owners may not realize the upside potential and institutional owners often focus more on their larger assets that have a material impact on overall portfolio performance.
This void in the market place presents an opportunity to acquire these smaller apartments at attractive acquisition rates and aggregate them into a portfolio of high-performing assets. Freedom Venture has the relationships needed to target lower and mid size apartment deals, predominantly run by "mom and pop" operators, often operating on higher expense ratios and thinner margins. Our Mid Size Apartment Fund’s investment objective is to create and maintain investor wealth by generating above-market risk-adjusted returns. This portfolio will seek to provide a consistent stream of income, equity appreciation, and passthrough tax advantages.
- Class B or better
- 1990's vintage or newer
- Lower-middle market communities (20 - 150 Units) in infill locations, which tend to have above market occupancy rates. Larger projects meeting all other guidelines will also be considered on a case-by-case basis.
- Under-performing or mis-managed with highly attractive acquisition capitalization rates
- 90% Occupancy
- Rents 10% or more below market rent
- Light Value-Add Opportunity (Core Plus):
Onsite Office Upgrades I Signage I Amenities I Flooring I Cabinets, Countertops, Backsplashes | Paint I Lights and Plumbing Fixture