SAN DIEGO—“Value-add is in the eye of the beholder.” So said Russell Minnick, president and managing director of Bridge Investment Group, at this morning's kick-off value add panel at the 2017 NMHC Apartment Strategies Outlook Conference. The panel, held at the Hyatt Regency in downtown San Diego kicked off a three-day NMHC conference and meeting event here.
When moderator Keith Harris, SVP and director of capital markets at the Bozzuto Group, asked panelists about how they look at value-add, Minnick said that it is different for the resident and different for the equity. “I look at it like this: if you can add something that is long term that adds value that can be capped and sold to the market, that is value add.”
Robert Hart, president and CEO of TruAmerica Multifamily, said that value add is typically physical and comes from being able to realize some potential in the rent. But he notes that value-add is an investor driven concept.
Hart shared similar observations at RealShare Apartments this past October. “Most of the equity we deal with has a rational return, but a lot of people push too far,” he told the RealShare audience. “We are typically adding 15 to 20% of the total project cost on the purchase price.”
For Daryl Carter, chairman and CEO of Avanath Capital Management LLC, value-add should have one target and one target alone and that is the resident. “If we give our resident a great value, it works out for our investor,” he said. “Our industry sometimes does too aggressive of a value add for the investor… When we do renovations, we try to add value that really will impact our residents. I view it strictly from the resident and maintaining occupancy.”
Check back with GlobeSt.com in the coming days for more from this panel and more from the NMHC conference as we continue to attend the conference and annual meeting this week.
Several economic factors have resulted in net positives for the multifamily sector and prices in core markets are at an all-time high. But just how long can the market continue on this trajectory? Join us at RealShare Apartments East on Feb. 28 and March 1 for insights on succeeding in the right markets as well as navigating and finding opportunities in the more challenging ones. Learn more.
SAN DIEGO—“Value-add is in the eye of the beholder.” So said Russell Minnick, president and managing director of Bridge Investment Group, at this morning's kick-off value add panel at the 2017 NMHC Apartment Strategies Outlook Conference. The panel, held at the Hyatt Regency in downtown San Diego kicked off a three-day NMHC conference and meeting event here.
When moderator Keith Harris, SVP and director of capital markets at the Bozzuto Group, asked panelists about how they look at value-add, Minnick said that it is different for the resident and different for the equity. “I look at it like this: if you can add something that is long term that adds value that can be capped and sold to the market, that is value add.”
Robert Hart, president and CEO of TruAmerica Multifamily, said that value add is typically physical and comes from being able to realize some potential in the rent. But he notes that value-add is an investor driven concept.
Hart shared similar observations at RealShare Apartments this past October. “Most of the equity we deal with has a rational return, but a lot of people push too far,” he told the RealShare audience. “We are typically adding 15 to 20% of the total project cost on the purchase price.”
For Daryl Carter, chairman and CEO of Avanath Capital Management LLC, value-add should have one target and one target alone and that is the resident. “If we give our resident a great value, it works out for our investor,” he said. “Our industry sometimes does too aggressive of a value add for the investor… When we do renovations, we try to add value that really will impact our residents. I view it strictly from the resident and maintaining occupancy.”
Check back with GlobeSt.com in the coming days for more from this panel and more from the NMHC conference as we continue to attend the conference and annual meeting this week.
Several economic factors have resulted in net positives for the multifamily sector and prices in core markets are at an all-time high. But just how long can the market continue on this trajectory? Join us at RealShare Apartments East on Feb. 28 and March 1 for insights on succeeding in the right markets as well as navigating and finding opportunities in the more challenging ones. Learn more.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
