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Investors See Opportunity in Value-Add Strategies for Class-B Multifamily Assets

March 9, 2016

Mar 8, 2016 |  | National Real Estate Investor

Multifamily developers can capitalize on a huge unmet need in the market by buying and renovating older class-B and class-C apartment buildings.

“What is missing in this cycle is the construction of apartments that can cater to people earning the median income,” says David Schwartz, CEO and co-chairman of Waterton, a multifamily developer and manager based in Chicago. “We have an affordability crisis.”

Developers like Waterton specialize in “value-added” projects that improve older buildings, raising the rents and attracting residents who want more than a typical, aging class-B or class-C property, but who can’t pay the kinds of rents currently being charged for new class-A apartments. These value-added projects benefit from the strong demand for apartments overall, without having to compete with the hundreds of thousands of more expensive, luxury units now under construction.

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Gregory De Jong, CFP, Co-Founder of Paragon Advisors, LLC.
July 7, 2015

Blue Vault is just what advisors need to size up the different offerings in the nontraded REIT market. Just as importantly, it’s what the industry needs to encourage best practices among REITs.