Investment Strategy

Targeting multifamily properties.

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Execution

 

Operations

  • Focus on customer satisfaction to produce predictable and growing returns

  • Increase resident retention through site interaction and staff training. Allows management to be more aggressive with new lease rates when renewal rates and occupancy are optimized. Focus staff on minimizing downtime between move-out and move-in for tenant rollover.

  • Detailed and continuous market analysis to ensure maximization of rental rates and enforcement of ancillary income opportunities.

  • Review and consistent negotiation of utility expense including lighting, water, cable and internet.

  • Leverage relationships to achieve scale and receive purchasing efficiencies.

  • Incentivize management teams strategically to drive margin.

Construction

  • Create value through renovation to maximize rental revenue

  • Target values, which are under-valued, mismanaged, or need extensive capital improvements.

  • National track record allows ability to take best practices in design and construction execution and apply them to target markets.

  • In-depth market research done prior to every value add project to determine what the market would most value in that site and where the highest return on cost can be found.

  • Long term contractor relationships, rather than transactional, lead to more predictable pricing as well as cost savings.

Branding

  • Create value through organized marketing programs

  • Strategic redesign of websites, signage and brand overhaul adds significant value to properties.

  • Opportunity to rebrand and reposition within competitive subset.

  • Target projects where it is evident that the wrong marketing knowledge, team, or sense of urgency to execute exists.

  • Utilize strategic relationships with experts in the multifamily redevelopment design field.

Investment Strategy

 
Property Characteristics
Investment Type:
Core, Core+, Value Add
Product Type:
Multifamily
Property Quality:
B Type Properties (1980s and newer)
Submarket Quality:
B and Greater Submarkets
Investment Characteristics
Project Hold Periods:
2-10 Years
Project Level Returns:
17%+ IRR, 1.65x
Targeted LP Returns:
15%+ IRR, 1.60x
Total Capitalization:
$5MM-$100MM
Debt Characteristics
Loan Type:
Bridge and Permanent
Loan Term:
2-10 Years
Loan-to-Cost:
50% to 75% of Total Capitalization
Loan-to-Value:
65% to 70% of Stabilized Value
  • Target off-market deals and go straight to owners. Our preference is generally to buy from longer term owners with capital-starved properties.

  • Target properties below replacement cost in order to hedge investment against issues caused by new supply entering the market.

  • Each investment opportunity will be thoroughly analyzed and submitted to the Arrowroot Real Estate Investment Committee for approval prior to engaging in any investment.

Target Markets