The Key to Multifamily Asset Management: Controlling Costs and Creatively Adding Value

Every so often I scan through the real estate forum on Wall Street Oasis and I recently came across an interesting thread titled ‘Contrarian Thesis: Acquisitions is the Least Interesting Job in Real Estate’.  The post argued that acquisitions is a repetitive job wrought with frustration and best-suited for young analysts who are hungry and proficient with the latest technology. Asset and portfolio management, on the other hand, tend to be the most valuable and interesting roles. The asset managers recognize the value-add upside, know what it cost to renovate, have intimate knowledge of...

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The Bearish Case for Multifamily

Multifamily has been the darling of the recovery and remains one of the most sought-after asset classes. And why wouldn’t it be? We’re constantly bombarded with the case for multifamily; there’s a secular shift toward renting, millennials are getting married and having kids later, baby boomers are downsizing and seeking an urban lifestyle, multifamily construction was well below historic norms coming out of the recession, many 18-34-year-old’s live at home and will eventually enter the renter pool etc. etc. It’s a compelling case. Some of these are real, while others are overblown. In...

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The Multifamily ‘Amenities Arms Race’ Shows no Signs of Slowing

Multifamily development has picked up considerably over the past few years, as the demand for high-quality apartment communities near major employment centers and entertainment has increased. Driven by demographics, couples getting married and having kids later, lifestyle choices, and pent-up demand, millennials, Gen Z, and some Baby Boomers are flocking to newly-developed class A communities. These individuals seek a lifestyle and expect way more than a nice place to live; they desire conveniences, technology, a robust resident event program and sense of community, and amenities. Lots of...

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The Key to an Effective Value-Add Strategy: Hands-On Oversight

In my role at Atlas, I oversee our value-add multifamily strategy. We buy 1970’s – 1990’s class B value-add properties and seek assets that are priced below replacement cost and comparable sales, where we can add value at then property level, and that are in markets we like long-term. Adding value is hard. It requires a hands-on approach, local market knowledge, creative-thinking, and great management skills. At Atlas, we’re a lean team and hire 3rd parties to assist with property management, construction management, design and architecture, and marketing. As such, my role is largely...

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The Only Information Needed to Make Multifamily Investment Decisions

The real estate community has become obsessed with data. In the multifamily space alone, there are countless sources for all sorts of ‘relevant’ data; Costar, Axiometrics, REIS, Reonomy, RCA, MPF Research, Yardi Matrix, etc.  The access to data has brought transparency to the space, but has led to better decision-making or just more noise? There’s been several studies which have concluded that more information doesn’t necessarily lead to better investment decisions and oftentimes, having more information can be harmful because it leads to over-confidence and fuels confirmation bias....

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5 Things I learned in 2018 and 5 Goals for 2019

Happy New Year, everyone! I hope you're able to unplug and enjoy quality time with family and friends. I find that time off, completely disconnected from the day-to-day grind of daily work is key to regaining focus and igniting the spark of creativity. 2018 was another productive year on ASotREG. I rolled out a site redesign (ASotREG 3.0), launched a new eBook on passive real estate investing, and published 14 new posts. I’m incredibly humbled and appreciative of everyone who has given me their attention. Your time is the most valuable asset you have, so it inspires me to do everything I...

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I Write to Discover What I Think: The Power of the Quarterly Investor Letter

“I write to discover what I think. After all, the bars aren't open that early.” This is a well-known quote from American historian Daniel Boorstin and it’s exactly why I write this blog. I write about topics I find interesting, and the writing process enables me to tighten up my thinking. Some of my favorite posts such as the future of urban living, the impact autonomous cars will have on the built environment, and how to be an entreployee within your firm were ideas that I was interested in and wanted to vet further. I have a deep passion for unique housing models, I’m fascinated by the...

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What Happens to Class B/C Apartment Investments During a Downturn?

I'm a firm believer that real estate is best held long-term with great local teams on the ground. At Atlas, our model (deal-by-deal syndication) enables us to acquire assets that we can hold for 20+ years and control the repositioning with great local teams. From an asset class perspective, we focus primarily on acquiring value-add class B/C garden-style apartments. Although valuations may swing wildly across cycles, cash-flow remains relatively stable.  By having full controls, we can exit/refi at optimal times, while maintaining conservative leverage and cash reserves to weather any...

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The One Book Every Student of the Real Estate Game Must Own

A key tenet of ‘A Student of the Real Estate Game’ is to never stop learning. In my day-to-day as a real estate professional, I spend a majority of my time in the weeds, acquiring and asset managing value-add multifamily real estate in a few specific markets. One day may be spent negotiating a Purchase and Sale Agreement for a new acquisition, the next may be spent working with our onsite GC to trouble-shoot renovation issues, and others may be spent on calls and meetings with brokers and property management staff.  While I enjoy every aspect of the job, this leaves little time for...

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Integrating Data Across the Real Estate Life-Cycle

As the real estate industry becomes more institutionalized, there is greater demand for quality data. Data is the key to making informed decisions. Having a solid grasp of the current cap rates, financing markets, vacancy rates, rent growth projections, construction costs, population, employment, and income growth, are all critical to accurate deal underwriting and execution. However, most real estate professionals (myself included) only have access to select data-sources, providing limited data which may or may not be out-of-date. The data we maintain internally...

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New ASotREG eBook – 19 Real Estate Investors Share their Top Passive Real Estate Investing Tips

Cash-flowing private real estate deals can make great investments. However, with the space being highly unregulated and access to deals/sponsors fragmented, there’s a belief that investors must be real estate experts to make educated investment decisions. I think those expectations are crazy and the narrative prevents many individuals from investing in private real estate deals. Instead of expecting investors to be real estate experts, I believe investors should know just enough about real estate to ask the right questions, assess a Sponsor, and make informed investment decisions. Of...

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Aspects of the Real Estate Acquisition Process I find Frustrating

Over the past several weeks, I’ve been deep in a new value-add multifamily transaction. Acquiring real estate is cumbersome, complex, and opaque, yet we continue to complacently accept this reality. Part of the issue is that acquiring real estate is very fragmented, with different players collecting disparate data, requiring 3rd parties, and all profiting from different elements of the process.  This complexity is exactly where opportunity lies. Based on my recent experience, here are a few of the aspects of the acquisition process I find most frustrating. Deal Sourcing The deal sourcing...

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How to Win Marketed Multifamily Real Estate Deals

In real estate acquisitions, you seek the coveted off-market deals. These deals are more likely to be mis-priced, creating an attractive risk-return structure for operators with a track record for executing a specific investment strategy. However, fully-marketed deals can also be attractive opportunities. The challenge with marketed deals, however, is that you can spend a lot of time and money underwriting a deal, with no guarantee of being selected as the buyer. Contrary to common belief, the group that bids the most is not the group that necessarily wins fully...

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How to Make Apartment Features and Amenities Sounds Sexy

We recently embarked on a project aimed at improving the online marketing process for all our multifamily properties. The intent was to greatly improve our web presence, access deeper analytics, build a multifamily brand, and control the process from the ownership-level. Since we utilize 3rd party property management, each asset utilized a different website template, property management software, paid search marketing strategy, lead tracking process etc. From the ownership side, we had little transparency into the effectiveness of each marketing channel and were unable to make data-driven...

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Value-Add Multifamily Deal Screening Checklist for Passive Real Estate Investors

Passive investing in private real estate deals remains one of the best investment opportunities for long-term focused investors. Until recently, these deals were accessed through closed networks and executed entirely on a trust basis. As these deals have become more accessible, operators are forced to become more transparent and investors must learn to scrutinize sponsors, deal structure, and the opportunities themselves. While one approach to selecting deals is to simply pick the best sponsor, I think it’s extremely important for investors to know enough to ask the right questions to...

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The Many Futures of Urban Living

It’s no secret that most young professionals today prefer a 24/7 live/work/play environment. More than ever, talent is clustering in dense, urban areas. However, as jobs and people have moved back into cities in droves, urban housing has become too expensive for the average worker. As rental rates and housing prices in urban areas has skyrocketed, innovative real estate developers have stepped in to create more affordable living environments. We have micro-units, co-living, macro-living, temp living, and several technology platforms that support the new urban lifestyle. Let's dig in to...

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The Challenge (and Benefit) of Quarterly Reporting in Real Estate

In the wake of new regulation and rise of real estate crowdfunding platforms, there’s been significant growth in private real estate syndications where operators pool capital from a group of high-net-worth investors to acquire a property and execute a specific investment strategy. In the past, real estate syndications were done on a trust-basis; operators would go out to a handful of their buddies to raise the capital. Under this structure, reporting was less important. If things didn’t go as planned, operators had to deal with their uncle, best friend, and golf...

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The Real Estate Software Powering Our Growth: Featuring Dealpath

Over the past 7 years, Atlas has acquired 45 properties with a total deal value of ~$800M. Over that time, we’ve grown from 3 guys in a 100 SF shared office, to an integrated team with 5 operating platforms. It’s been a wild ride full of exciting expansion, but along with rapid growth comes growing pains. To continue to scale our acquisition process, we needed to put processes in place to efficiently manage investor reporting, asset management, acquisitions, and company operations. Luckily, real estate-specific software companies have sprung up to bring efficiency...

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Why we Prefer Value-Add Deals and Long-Term Holds

Real estate firms and investors each form their own investment strategy based on their risk-tolerance, desired hold period, expertise, and target returns. Some prefer core or core-plus investments which are typically high-quality assets in primary markets with little unrealized upside, while others prefer opportunistic investments such as ground-up development. Here at Atlas, we target primarily value-add transactions where we can execute a specific strategy with the aim of refinancing upon stabilization and holding long-term.  Value-add transactions possess upside...

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What’s Your Moat? 4 Forms of Sustainable Competitive Advantages at Atlas

The key to success in real estate investing (and business) isn’t simply finding a competitive advantage, it’s having a sustainable advantage that others are unable to replicate. Warren Buffet popularized the term economic moat, which refers to a “business’s ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share from competing firms.” As real estate becomes more institutionalized, the typical competitive advantages are arbitraged away; Informational advantages, even in secondary and tertiary markets, are not sustainable....

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Views expressed in “content” (including posts, podcasts, videos) linked on this website or posted in social media and other platforms (collectively, “content distribution outlets”) are my own and are not the views of Atlas Real Estate Partners, L.L.C. (“AREP”) or its respective affiliates. The content should not be construed as or relied upon in any manner as investment, legal, tax, or other advice. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.