I’m Joe Stampone. I work at Atlas Real Estate Partners (‘AREP’), a private real estate investment firm focused on value-add multifamily investments. ASotREG is a place where I share my thoughts on real estate as a career, technology, entrepreneurship, passive investing, and anything else that piques my interest.
Recent Posts
Thoughts on COVID-19 and the Impact on Workforce Housing: March 22nd, 2020
I started my career in the real estate business in 2009, the bottom of the Global Financial Crisis. It’s been a historic 10+-year run for the multifamily sector. The combination of economic growth, organic rent growth, compressing cap rates, and sustained low interest rates lead to great returns. That’s easy to say looking backward. There were many moments over the past 10 years where it felt like pricing was frothy and the music was ready to stop. My career has always been underscored by the risk of a recession driven by an unknown catalyst. I graduated from college in 2008 and saw...
3rd Party Property Management: Far from a Set it and Forget it Solution
Many multifamily operators (Atlas included) utilize 3rd party property management to oversee the day-to-day management of their properties. It’s great in many ways. You can maintain a lean team, utilize the resources of a large institutional management firm, and make a change if they’re not performing up to your standards. That said, implementing a 3rd party to oversee your deals is hardly a ‘set it and forget it’ solution. Multifamily properties require aggressive hands-on asset management and certain tasks must be handled at the ownership level. In my experience, here’s what 3rd party...
Lifestyle Brands Physical Real Estate Strategy Extends Beyond Retail
The way lifestyle brands approach their physical real estate strategy is changing. As sales have shifted online, brands have begun to utilize their physical presence to deepen their relationship with the consumer, share their story, showcase their products, and ultimately fuel (online) sales. This strategy is not just being deployed across conventional retail space, we’re beginning to see consumer brands in multifamily, hospitality (hotels/restaurants), and the condo business as well. Multifamily, until recently, was a relatively commoditized product that competed on price and location....
The Game has Changed: The Importance of Connecting with Residents
Direct to consumer brands (think Harry’s, Warby Parker, and Casper) have stolen market share from the incumbents. Their success isn’t because they have a slightly better product, it’s because they are obsessed with connecting with the customer. Real estate owners/operators can learn a lot from the success of digitally native DTC brands. In the apartment industry, there is little brand awareness and almost no brand loyalty, so residents are up for grabs. Owners who resonate with prospects, offer a great value, and cater to their lifestyle will ultimately win. I spend a disproportionate...
Two Multifamily Myths Debunked
The demand for multifamily remains strong, but the drivers of demand are often different than what most people think. Tell me if you’ve heard these two narratives: Millennials are moving more often so they prefer the flexibility of renting.Millennials have a shifting preference toward renting over buying. I’ve heard these from many smart real estate professionals who typically use anecdotal evidence to support their claim. While Millennials are staying in the renter pool longer, it’s generally not because of the reasons noted above. Let’s start with the first myth that increased mobility...
10 Multifamily Predictions for 2020
I hope everyone had a great holiday and enjoyed some quality time with friends and family. I was able to disconnect and spend a week in FL with my family. The time off is great, but I’m eager to get back to work and tackle the big initiatives and goals I have for the year ahead. In my first post of 2020, I want to make some predictions and point out the trends I see continuing within the multifamily space over the next 12 months. Here are my 10 multifamily predictions for 2020. The End of the ‘All White’ Kitchen: How many value-add projects do you see with the same ‘all-white’ look?...
Why Syndicators Should Always Over Raise Equity
Moses Kagan is the founder of Adaptive Realty which focuses on heavy value-add multifamily projects throughout the LA area. I really enjoy his views on the real estate business which he shares often over on his blog. In his most recent post, he discusses a concerning trend he’s seeing utilized by syndicators who raise capital via crowdfunding sites. In order to attract investors to their deal, syndicators must market deals with both current cash flow and high IRR’s. However, in today’s market, it’s nearly impossible to have both, so syndicators are over-raising capital to be used to make...
When Knowing Too Much Makes you a Bad Investor
Over the past 10 years, we’ve executed nearly $75M worth of renovation work across 20+ value-add multifamily projects. Over that period, we’ve experienced many of the unexpected things that can go wrong when executing these deals; hidden physical issues, larger than expected tax reassessments, tenant lawsuits, crime, resident delinquency issues, and submarket challenges like unanticipated new supply or poor policy decisions, to name a few. It’s like Farmers Insurance, “we know a thing or two because we’ve seen a thing or two”. While being educated on all the potential risks of a deal...
Routine Replacement Expenses: “Multifamily’ s Dirty Little Secret”
I was talking with a multifamily fund operator who’s been in the business for 30+ years. His firm started out buying class C multi deals and scaled up over time to raise a fund with institutional capital to acquire higher-quality, light value-add multifamily assets. The primary driver of the movement upstream was the capital-intensive nature of older vintage apartment properties. The ongoing capital needs make it difficult to hold these assets long-term and require holding significant reserves. In real estate, ‘cap rate’ is used as a crude metric for valuation and is simply a measure of...
The Challenge of Holding Multifamily Assets Long-Term
In my previous post, I talked about the value of compounding which results over holding multifamily real estate assets long-term. While that’s great in theory, it’s difficult to hold older vintage multifamily assets long-term (longer than 10 years). At Atlas, our business plan typically entails renovating and repositioning assets to bring them in line with other recently upgraded communities in the area. We rebrand the property, correct operational deficiencies, clean up deferred maintenance, improve curb appeal, and upgrade amenities and unit interiors; all of which typically result in...