Beach Front Property Management, a Long Beach-based multifamily investor that acquires underperforming properties (like La Habra complex) and repositions them for hold or resale, plans to target institutional capital to grow the company. CEO Kyle Kazan says he's changing the fee structure to attract institutional investors.
Beach Front is known for a $10M microfund that invests in workforce housing. The company plans to create a $25M to $100M fund to target workforce-housing properties in low-income, troubled neighborhoods. A former police officer, Kyle is willing to invest in neighborhoods with a reputation for gang violence. He says that he has made some of his best deals in these neighborhoods, because other investors were afraid or ill equipped to deal with gang problems.
Beach Front has a steady track record for delivering an average 19% return to private investors, an accomplishment Kyle attributes to his conservative investing philosophy. He expects to deliver similar double-digit returns for institutional investors and notes that his company rarely carries more than 40% debt on assets, and invests capital on minor cosmetic renovations. The company’s latest $10M fund, which closed recently, was so popular it raised $11M simply through word-of-mouth. The company’s portfolio includes properties throughout LA County’s South Bay and Orange County. [GST]
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