The Inland Empire is rapidly rising to the top of the target market list for workforce housing investment. The region has seen substantial job and population growth, and workforce housing investors are finding strong opportunities in the market to drive rents in the workforce housing niche, particularly by California standards. Workforce housing investor Tower 16 Capital Partners has acquired its first multifamily property in the market, and plans to aggressively build a strong portfolio in the market over the next 12 months.

“We are focused on markets with good fundamentals, good population growth and good job growth,” Tyler Pruett, a principal at Tower 16, tells GlobeSt.com. “In terms of fundamentals, the Inland Empire is at the top of the list, certainly in California, for both job growth and population growth. That has been driven by the warehouse and logistics business in the market. We have been focused on B- and C- multifamily acquisitions. Specific to jobs that are being created in the Inland Empire, there is a large need for workforce housing to supply housing for those individuals.”

The firm purchased Hillside Village Apartments, an 80-unit multifamily project in San Bernardino, from an unnamed seller for $11 million. The property checked all of Tower 16's boxes, including upside in rents through capital improvements. “This particular opportunity checked a lot of those boxes. We want properties where there are operational efficiencies that we think can be gained by bringing in a professional level of management. We'll be using Cannon Management, and we have identified multiple areas to enhance revenues and reducing some operating costs,” Mike Farley, a principal at Tower 16, tells GlobeSt.com. “In addition to that, there is a lot of opportunities for physical upgrades that I think are in demand in the market. We think there are premium rents that we can achieve in that market.”