Charlotte commercial multifamily

[Nicholas Alexander]

The Charlotte commercial multifamily market seems to keeping pace or exceeding that of residential. I was curious if investors were adjusting their strategies (e.g. switching from buy-and-hold to flipping or developing, condos etc.), moving to other sectors (e.g. self-storage), considering other markets, or what they are doing to find deals? I am open to partnering with other syndicators and was curious if anyone would be willing to share their experience. Thanks

[Jason E. Smith]

Nicholas,

We’re having success finding deals, we currently have nine apartment communities under contract. Only two are here in NC, although none specifically in Charlotte. That market seems to have become too competitive for our numbers to make sense. Our advantage is we operate as a group and have active members in many MSA’s across the US. We focus on MSA’s with population growth, job growth, landlord friendly, etc. The deals making sense for us these days are deals with a story to them. One was owned for 20+ years by two elderly aunts who had their cousin running the property. One was being sold by the developer who built the property over forty years ago, never did any interior renovations and barely raised rents. Two are forced sellers because of partnership disputes. Those are deals where our returns work. The deals that are on value add 3.0 or 4.0 and have only been owned a couple years and rents are very close to market just don’t fit our criteria. We won’t pivot to another asset class because it takes years to build the relationships in the business, establish a track record, gain confidence in industry standards, find great property managers, great vendors, etc. It’s definitely more challenging finding deals that make sense today but I don’t think it will stay that way forever and I think a key today is being open to a few different markets and having a great team so you have more eyes looking. Hope that helps!