Investment Thesis

  • 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.