Multifamily Strategy: Why Presidium's Ready to Move on 3,000 Units
Presidium Group has been on a major buying spree, and is on pace to acquire more than $200M of multifamily assets before the year ends. Anticipating the market to continue at a measured pace, it's planning to refi and/or sell about one-quarter of its 11,000 units.
It’s been a hot market for Presidium's sweet spot, value-add infill properties. Co-CEOs Cross Moceri and John Griggs tell us there’s been great demand in Class-B and C properties near the CBD; residents want to live right in town, but many can’t afford to pay $2 or $3/SF. Presidium’s strategy of design-driven updating of older assets has provided a value alternative to new construction, Cross says. Presidium has closed more than 25 deals in the last two years across the major Texas markets, says John. The most recent is the 404-unit Plaza on Harvest Hill in Dallas (as well as the 150-unit Cenizo Flats in San Antonio and 381-unit 3737 Hilcroft in Houston).
While those recently acquired properties are just beginning Presidium’s strategy of renovating, rebranding and stabilizing, a huge chunk of units are completing the process. Presidium's planned move to refi or sell is a result of the low interest rates and aggressive buyer pool, John tells us. Each property has a different hold time based on what the asset needs. Some properties could be five- to 10-year holds or longer because they’re good performers in great locations. Others will be renovated and flipped after a year or two, he says.
While most of the distressed opportunities have already traded, Cross says Presidium will continue to seek targeted, mostly off-market opportunities in 2015 and will also kick off a couple development projects. Away from the office: John (here with his wife, Anne, and their two children) likes to travel (he’s been to 48 countries and 49 states) and spend time with his family, which includes a 2 and a 4-year-old. Cross is also busy in the off hours with his wife and three little girls (all under the age of 4).