AUSTIN-After years of lending money to multifamily property investors – and acquiring its own multifamily portfolio – Principals Capital Funding and First Capital Funding LLC is being rebranded as Thrive, FP. The broadened scope and differing strategies led to the name change, with the "FP" representing "for purpose, for profit."
JP Newman, a managing member of the former First Capital Funding and founder/CEO of Thrive, FP, says the companies' evolution helped prompt the branding change. "Our returns have been consistently good for investors, but with the market changing, we wanted to show a strong connection between the money investors are investing and the impact of those funds on the tenants in the apartment buildings," says Newman, who partners with Adrian Lufschanowski, president of Thrive, FP.
Newman tells GlobeSt.com that the goal of the new branding – which has taken six months to implement – is also to follow the double-bottom line type of thinking. "The better we treat our communities and tenants, the more the tenants feel like family, and the more likely they'll stay in our buildings," he remarks.
The make-up of those building investments is changing as well. At one point, Principals Capital and First Capital invested in class C properties with value-add potential. Now the focus is primarily on acquiring – and lending money to acquire – class B assets and even some new construction.
Newman says the reason for the change is the market, especially the Texas multifamily market. "Population and job growth versus construction is still in favor and we feel it'll stay that way for awhile, but the market has heated up," he points out. "Texas has become a preferred market for everyone, from New York, Chicago and Los Angeles."
As such, with prices increasing, "we want higher-quality assets and longer holding periods," Newman explains. "We're investing in the long-term right now."
And right now, Thrive, FP – in conjunction with Jevan Capital and Quez Capital – has approximately 1,500 units under contract from different sellers, with a total value of $60 million. The assets under contract are:
- The 659-unit Gessner Estates, 8701 Town Park, Houston
- The 278-unit Arroyo Ranch, 9109 Dartbrook, San Antonio
And the Austin Apartment Property Portfolio, consisting of:
- 130-unit Gateways, 1804 Rundberg Lane W.
- 132-unit Quail Run, 1200 Mearns Meadow Blvd.
- 160-unit Woodmark, 1735 Rutland Dr.
Newman says that multifamily properties acquired solo will be rebranded under the Thrive name. Those acquired through partnerships will operate under the partners' preferred brand name.
Meanwhile, Newman is preparing to re-enter California by launching a $10 million fund specifically for distressed assets. "We're still focused on Texas overall because the market is good," he says, adding that Thrive, FP isn't necessarily specific to the Lone Star State. "As we continue to expand, we'll be focused as a regional player in the south and southwest," he adds.
In terms of an investment sweet spot, Newman says it's less about infill, and more about employment and jobs. For example, Arroyo Ranch is near USAA which employs approximately 14,000. "We're looking at the jobs, where they are, and job growth," Newman comments.
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