September 2023: Cooper Bend Closed

Published by

October 17, 2023

Summary

We're thrilled to announce our acquisition of Residences at Cooper Bend in Hanahan, SC, purchased from a distressed seller at $91k/unit. Thanks to our investors for making this possible. Q3 reports are on their way. We've been featured in multiple podcasts. We're exploring all opportunities and our portfolio continues to defy market trends, seeing significant rent growth.

Just Closed: Cooper Bend - Hanahan, SC (Charleston MSA)

We are thrilled to announce the recent acquisition of Residences at Cooper Bend. We're extremely excited about this investment, as we bought it from a distressed seller at a phenomenal basis of just $91k / unit.

I know we say this every time, but thank you to all of our investors. Without you, we wouldn't be where we are today.

Quarterly Reports

We are currently in the process of putting together our Q3 investor reports. We hope to deliver them in the coming days.

In The Media

We made another round of appearances in the media. We were featured on the following podcasts in September:

What we are looking for

We're looking at everything right now. Distress, loan assumptions, great basis opportunities, etc. The primary reason we invested in expanding our team earlier this year was so that we could analyze every opportunity, and we are seeing opportunity.

As mentioned above, Cooper Bend was a phenomenal opportunity, but it isn't the only one. We're seeing loan assumptions that deliver the strongest going in cash flows since 2019, and we're also seeing distressed opportunities offering the lowest price per units since 2020.

Market Insights

Inflation Update

The September inflation numbers came out and the results were a mixed bag. Overall inflation rose slightly to 3.7%, but core inflation fell to 4.1%.

What should we make of this? It's hard to say. Maybe there is one more hike this year. Maybe there isn't. It's a bit of a toss-up.

Defying the Trends

One of the biggest stories in multifamily has been the rent growth or lack thereof. Some markets are experiencing negative rent growth. Oversupply is causing rents to plateau. Is there too much new construction?

Despite all of these headwinds, we've still seen phenomenal growth within our portfolio. The Avery (formerly Arlington West), Creekside Villas, and 300 Optimist Park have all experienced rent increases of over 18% in the last year!

So, despite all of the negative headwinds, our portfolio is defying the trends.

Opportunities on the Horizon

We see a lot of opportunities in the coming months. Despite lending restrictions, deal flow is expected to increase. And we understand that this seems like a contradiction, but as we've said before, "extend and pretend" can't go on forever.

From our conversations with brokers, there are fewer buyers in the market than there were six months ago, and we've seen pricing guidance reductions in excess of 15% on some assets.

In short, more and more owners are being forced to sell, and fewer and fewer buyers are looking to buy. Just two years ago, if you wanted to win a deal, you'd have to outbid 30+ other people. Today, it could be 2 or 3.

Is financing easy? No. If it were, there would be more buyers, so our focus is to capitalize on these opportunities.

In the future, when banks start to loosen up again and even more investors gain access to alternative investments, we believe we'll be well positioned to secure great returns for our investors.