ORANGE COUNTY: Can Multifamily Dominate Forever?
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Multifamily has been everyone's darling for a while, but TruAmerica Multifamily prez Bob Hart tells us Orange County hasn't been picked clean yet. Not if you're thinking value-add. And Bob is. The former Kennedy Wilson Multifamily Management Group prez recently launched the LA-based TruAmerica Multifamily to acquire and reposition Class-B and better transportation- and job-centric, market-rate housing in the West Coast and Mountain states. There are many value-add opportunities left in OC, Bob tells us, and the spread between core and non-core rents in OC remains high, creating an opportunity to capture rent premiums through renovation. (We finally know what can happen "if I had a hammer...")
This isn't all conjecture. Profiting from OC value-adds is already happening. "The past couple of years, we've seen strong and steady income performance in our value-add assets in Tustin and Santa Ana, where there's significant demand for upgraded workforce housing," Bob says. "We're seeing 8% to 12% lift to our post-renovation rents." TruAmerica is off to a good start with 9,000 units under asset management. Next month, the company closes its first two acquisitions: a 221-unit deal in Oceanside and a 168-unit property in San Jose. It has a $200M pipeline on top of those.