May 25, 2023
By: Ryan Wynkoop, Investor Relations Manager
A real estate investment sponsor’s success is contingent on having both a strong business plan and strategy to market. This will serve as a guide throughout acquisitions and the approach to the real estate asset thereafter. It will also dictate how a sponsor generates their value and investor returns.
Ashcroft Capital’s business plan is to acquire multifamily assets that present the opportunity to drive returns through improvement—known as the value-add method. With this in mind, we target underperforming or distressed Class B properties that are well maintained and occupied, with an average life span of 20 years. Applying selective upgrades to these property types quickly brings the asset back to the market standard. This improvement process typically takes us around three to five years to execute. The process is complete when we begin to see returns in the property income that are equal to or exceed our projections.
In addition, we target properties with over 200 units, knowing that our target takeout buyer after improvements are completed is an institutional level buyer who targets this size and scale of properties for acquisition. We also focus on strong suburban submarkets outside top-tier cities where the most demand and focused growth has been, especially since the COVID-19 pandemic.
Additional investment criteria include the following:
– Strong developing suburban submarkets outside of top-tier cities, particularly in the southeast
– “Garden style” construction—typically two to four stories, with surface parking lots and robust amenity offerings—in high demand by renters
– Properties capable of producing $20 million to $150 million in total capitalization per property
CURRENT MARKETS WE ARE RESEARCHING
Ashcroft Capital’s overall portfolio has a strong presence in a number of submarkets throughout the Sunbelt such as Texas, Georgia, Florida, and North Carolina. Our latest acquisition for the Ashcroft Value-Add Fund III (AVAF3) is located in Chapel Hill, North Carolina. We have also identified the second and third properties for the AVAF3 in Florida’s strongest markets—Sarasota Springs and Coconut Creek.
We are currently researching several new markets throughout the southeast that we flagged as potential expansion markets for acquisitions.
Those markets include, but are not limited to, the following:
– San Antonio and Austin, Texas
– Charlotte and Raleigh–Durham, North Carolina
– Charleston and Greenville, South Carolina
– Nashville, Tennessee
Ashcroft uses a thorough due diligence process when reviewing potential markets. We assess a multitude of regional factors to determine the level of opportunity for investment in these markets. There are a number of factors driving demand for the foreseeable future. We have found that there is inward migration and positive population growth in these markets, with a lack of housing supply. Research findings also established that economic conditions for growth are robust in these markets. Specifically, there has been onshoring of many industrial, manufacturing, and logistics jobs. In addition, baby boomers are increasingly choosing these markets for relocation and retirement. The likely cause of this migration is the discernibly cheaper cost of living found in the southeast in the face of nationwide inflationary pressures.
For information on our current fund, The Ashcroft Value-Add Fund III, visit https://info.ashcroftcapital.com/fund or schedule a call with our Investor Relations Team at firstname.lastname@example.org.