The venture is also going to be seeking distressed properties, mismanaged properties and outdated ones “in markets where positive trending macroeconomic forces allow for the repositioning of older housing stock through accretive capital improvements.”

According to David Nachman, principal of Spirit Investment Partners, Bascom’s track record of investing in value-add multifamily properties throughout the west and southwest, “makes them an ideal partner to help execute the business plan of acquiring similar type properties in Eastern US markets.”

Nachman tells GlobeSt.com that “the venture brings sponsor/GP equity to a transaction totaling up to 20% of the total equity requirement. There is no fund per se, but the sponsors are willing to commit up to $25 million which would be leveraged with joint venture equity and debt financing to allow for north of $400 million in purchasing power.”

He adds that the JV is “targeting single asset or portfolio value-add opportunities that yield an upper teens/low 20’s IRR and 2.0X equity multiple over a three to five-year hold period.”

Nachman also tells GlobeSt.com that the “primary markets” in their view include New York metro, Boston metro, DC and Northern Virginia and Chicago, since it is Eastern US focused. He adds that the JV defines “robust secondary markets” as “MSA close to 1 million people, positive trending population growth, and diverse economic base with post recession growth prospects, attractive to a young, educated workforce like Philly, Baltimore, Carolinas, Nashville, St. Louis, Kansas City, and Minneapolis/St. Paul.”

The company is currently negotiating contracts to acquire several properties with others in the pipeline. The partnership is targeting the acquisitions of 5,000 units over the next few years. Nachman tells GlobeSt.com that unfortunately he isn’t able to be specific at this time, but notes that it totals more than 700 units and are located in “similar type markets” as what was mentioned in the previous paragraph.

Jerome Fink, managing partner of Bascom, adds in a prepared statement that “Coming off the Great Recession, we are experiencing a market opportunity where new construction has been severely limited, demand drivers for apartment renters are highly favorable, and multifamily property operations have not only bottomed but are beginning a healthy recovery.”

He adds that the increased level of foreclosures in the B and C sector “should provide a strong buying opportunity for the new venture with Spirit.”