Passco Expands Value-Add and Ground-Up Development

Passco Cos. Development is expanding its value-add and ground-up development platform in response to changing market conditions. The development arm of Passco Cos. has hired Carey P. Levy as president to lead the expansion efforts. Levy formerly served in this position at the company from 2007 to 2013, and is returning to the firm to oversee development and value-add repositioning acquisitions, entitlements, construction and financing nationally and across multiple real estate asset types.

“Passco is focused on transactions in multifamily and has been extremely successful in this area for the last 21 years,” Levy tells GlobeSt.com. “We are continuing with that strategy, and are also making strategic moves for the future. By thinking prudently about what may happen in the market going forward, Passco made the decision to allocate some of its investments toward other opportunities, including value-add and ground-up development properties.”

The firm’s market concerns about the future include interest rate sensitivity in the future, although the Fed has stalled interest rate increases, as well as concern about changes to the 1031 exchange structure. “We have had discussions about the 1031 exchange program and how long it might continue under the current administration. As the industry continues to have conversations about that, Passco is looking ahead to ensure we are diversified into different sectors.”

The opportunity to grow these two development platforms lured Levy back to the company. “For the next 10 years or more, I want to do something that will be rewarding, exciting and different,” he says. “This was an opportunity to walk back in and pick up where I left off prior to the recession.”

In stepping into the position as president, he has two major goals. First, he plans to grow the firm’s exposure to active senior housing, both in ground-up deals and value-add plays. Next, Levy wants to grow value-add projects in all core sectors. “We are targeting underperforming properties, based on factors such as management issues, partnership disputes or a lack of liquidity,” he says. “I have seen a wide variety of cases where a property can be enhanced into a nice cash-flowing asset.”

The firm is looking nationally for opportunities in both of these areas. “We are not only staying in Western States, rather, our focus is on high-growth markets nationwide,” says Levy. “We are really looking at the markets and understanding the demographics behind each market to ensure each investment is sound.”