Oak Coast Properties is bullish on the Denver market, specifically targeting the workforce housing segment. In the last 12 months, the firm has acquired $320 million in apartment properties, including its most recent purchase, The Courtyards at Buckley for $143 million. In 2020, Oak Coast plans to remain an active player in Denver as long as opportunities that fit the fir's business plan are available.
"We like the Denver market because there is a lot of growth, both job growth and population growth, especially in the pocket that we are in," Roy Kim of Oak Coast, tells GlobeSt.com. "We typically go after 70s and 80s vintage assets and we target the workforce housing community. We don't have a lot of competition in that segment, and that has allowed us to have properties with strong occupancy and strong rent growth. We continue to see that, and we don't see any threats of new supply coming to hinder our growth."
It is rare to hear that there is little completion in the multifamily space, particularly in value-add deals. However, Oak Coast performs only light renovations and targets the workforce market segment. "A lot of players that come to the market in this segment, 70s and 80s vintage, are spending $10,000-plus on interior renovations to get to the high-end of the market and compete with the class-A and class-B+ assets," says Kim. "That would obviously take those properties off our competitive space. We are still able to get some steady but strong growth staying in workforce housing."
In fact, the Courtyards at Buckley is a prime example of the firm's investment strategy. "This exactly the business plan we typically have. We don't do heavy renovations at these properties; it is not a heavy value-add play," says Kim. "Typically what we do is making operations a lot more efficient and maximizing rents."
Oak Coast also takes a flexible timeline on its acquisitions, building in longer hold periods. "We don't have a hold period. We look at our assets on a long term basis, but we take a look on a quarterly basis and make a decision on whether we should do a sale, refinance or continue to hold," says Kim.
In 2020, Kim hopes the firm will exceed its 2019 acquisition volume, but he says that will depend on the opportunities available. "It would be great to continue to have this kind of growth," he says. "It is getting increasingly difficult to find the right deals with the right yields. The deals that we have done recently and our reputation has allowed us to have good relationships with brokers and sellers."
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Kelsi Maree Borland
