The West Coast's multifamily market is in high demand, but construction continues to lag. Bisnow caught up with TruAmerica Multifamily COO Lynn Owen to discuss the multifamily market on the West Coast and particularly Southern California. Lynn will be speaking at our inaugural Future of SoCal event Nov. 15.
Lynn, above crabbing in the Pacific Northwest, has over 29 years of experience in multifamily and commercial property management. At TruAmerica she oversees all asset and construction management and portfolio operations functions and is a part of the firm’s Investment Committee.
She says the West Coast and Southern California are moving to a multifamily-oriented society with more people renting as a more affordable option to buying a home.
“The US west of Denver is particularly fertile ground,” Lynn says. “Many metropolitan areas are experiencing sustainable economic growth, while at the same time housing affordability and homeownership have historically been lower than national averages.”
Construction isn’t keeping up with job growth and demand, according to Lynn. She says the biggest issue is that new apartments under construction—not just in Los Angeles, but throughout the country—are targeting the high-end rental spectrum and ignoring a vast majority of renters-by-necessity.
“These supply and cost imbalances, which are extremely evident in Los Angeles, highlight the need for quality rental housing within reach of working Americans,” she tells us.
To overcome these challenges, Lynn (above with her parents) says TruAmerica is focused on acquiring Class-B assets in first-ring submarkets close to high-growth urban markets. The firm applies its vertically integrated value-add program, which repositions these complexes to provide “better quality, professionally managed, amenities-rich communities.”
Purchasing assets at a discount to replacement cost allows TruAmerica to avoid risks associated with new developments, including the high cost of land and other barriers to entry, that end up being passed down in the form of higher, often unaffordable rents.
Lynn says Southern California has been a favorable market for TruAmerica due to “strong rent growth and demand, leading to attractive risk-adjusted returns for our investors.”
The West Coast remains TruAmerica’s core market since the firm was founded by Bob Hart with Guardian Life Insurance Company of America in 2013. TruAmerica has built a portfolio of 30,000 units and has a market cap over $6B, Lynn says.
While most of the company’s assets are in California, Colorado, Oregon and Washington, it also has significant holdings in Nevada, Utah and Arizona.
The company’s acquisitions this year include a 136-unit complex in San Francisco’s Bayview District, a 379-unit complex near Phoenix and Millennium Woodland Hills in Los Angeles.
TruAmerica also recently expanded its presence into the East Coast and will focus on expanding its platform in the Mid-Atlantic, Tri-State region of New York, New Jersey and Connecticut as well as the Southeast, according to Lynn, above with friends.
TruAmerica purchased its first Eastern asset in May for $187M, adding a three-property asset in suburban Baltimore to its portfolio. TruAmerica’s new Washington, DC, office, which opened in early September, will support this acquisition and others with asset management and capital improvement activities, Lynn says.
The East Coast addition will allow TruAmerica to better support its institutional investor base, which includes insurance companies, pension fund advisers, global real estate investment firms and large family offices, many of which are on the East Coast, Lynn tells us. Even after the expansion, the company’s focus will remain the same.
“We will continue to look for those first-ring assets where we can unlock unrealized potential through thoughtful repositioning, renovation and improved operational efficiencies,” Lynn says.
When she’s not talking about multifamily, Lynn, above at a Crysalis Butterfly Ball fundraiser, participates in fundraising for various charities supporting children’s health and well-being and nonprofits focused on ending homelessness and helping victims of domestic violence.
Hear more from Lynn and our other speakers at our Future of SoCal event on Nov. 15 in Los Angeles.
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