Mission's Chris Finlay

While some in the general market describe Mission Residential as a contrarian player, the leadership says the firm is anything but. Although big-ticket sales are occurring for trophy assets in major markets on the coasts, the company generally focuses on middle-market apartments in second-tier cities. Since its inception just a few years ago, Mission Residential has used its founders’ expertise and strong research arm to build up a significant portfolio that is on track to reach 10,000 owned units this year and another 9,000 units under management. Now that most apartment markets seem to be improving, thanks to a slowing single-family home sector and improving economy, expect further growth from the company. Christopher C. Finlay, the Vienna, VA-based managing principal of capital markets and operations (and Mission Residential co-founder, with David A. Wieland, managing principal of real estate and research), recently sat down with Sule Aygoren Carranza , editor of Multi Housing forum to talk about his views on the market, the company’s strategy and why he believes the company’s game plan to be one of the most successful approaches to investing in today’s market.

MHf: Let’s talk a bit about Mission’s strategy. Why don’t you agree with the word contrarian?

Finlay: Our investment strategy is based on what we view as obvious macroeconomic and demographic trends. The period from 2001 to 2005 is what we define as the perfect storm for apartments–there was a low interest-rate environment driving the transition to homeownership and a relatively weak national economy that wasn’t creating a lot of jobs. Also, the demographic cohort at the time that had the highest propensity to rent, Gen X, was tiny compared to the baby boomers that preceded them. The combination of those factors was fairly catastrophic from an effective-rent standpoint across most of America, particularly Middle America. These markets had huge declines in effective rents, as much as 30% in some cases.