Social, demographic, and economic forces are converging to support high demand for quality rental housing in the Country’s high growth markets.
A favorable risk profile and potential for out-sized returns has driven substantial equity allocations into Multi-Family housing.
This, along with historically low cost debt options, has led to Cap Rate compression over the past 4 years.
Decreased levels of home ownership combined with accelerating household formation has caused spikes in Multi-Family occupancy rates in most markets. These high occupancy rates have supported 6-8% annual increases in base rents for the past 5 years. These increases have substantially outpaced wage growth and have created high demand for competitively amenitized value alternative product.
ESG Kullen has pioneered several strategies to acquire well located, high quality Multi-Family assets at discounts to current market valuations by exploiting existing laws governing the treatment of failed condominium structures in several jurisdictions including: South and Central Florida, South and North Central Texas, Arizona, Chicago MSA, California and the Carolinas.
ESG has refined and evolved these strategies over the past 10 years through its experience with 27 distressed condominium executions (see Historical Returns section)
We see substantial opportunities to generate alpha through the continued exercise of these strategies. Certain market and economic conditions are currently supporting a robust pipeline of these opportunities. Our current pipeline is over $300m of total capitalization that could be deployed over the next 2 quarters.