We are opportunistic but disciplined investors. To date, we have focused mostly on multi-family apartment complexes that are typically “B” or “C” grade properties, based on age and/or condition. We look to systematically improve our properties and communities over time and serve as the “best in class” within our sub-markets, providing superior maintenance, customer service and value.
Most of our acquisitions to date have been in the Southeastern United States, because this is where we have found the investment opportunities to be the most attractive. We remain flexible though, and continually evaluate alternative markets. We can easily shift our focus as other markets become relatively more attractive. We have recently been active in building a portfolio of single-family rental houses in the Southeast and we’ve undertaken our first land and development projects, right here in Washington State.
With our multi-family investments, we generally focus on properties that range between 50 and 250 units, were built in the 1980s or later and range in price between $2.0 million and $15.0 million. We often focus in secondary and tertiary markets.
Our annualized return on investment objectives are as follows:
Cash on cash returns of at least 6% to 8%
Debt reduction that provides an effective return on invested capital of 2% to 4%
Capital appreciation of 5% or more over the term of the investment
Combined compounded returns over the term of investment of 15% or more
Our performance against our targets has been outstanding to date.
Under the stable property strategy, we select for investment strong performing, well maintained properties in secondary or tertiary markets with strong and growing economies and/or other factors that are likely to support strong future rent growth. For these opportunities, we match the strong performance of the property and the local market with the ability of that property to support fixed rate, low-interest long-term, assumable debt. These properties provide investors with attractive immediate cash on cash returns and long-term capital appreciation potential. We generally look to hold these investments for 5 to 10 years.
Under our distressed/undervalued property strategy, we select for investment properties in markets with similar characteristics to those targeted in our stable property strategy, but which properties have become financially distressed and/or under-managed by current owners. These properties require significant capital in excess of the purchase price to address deferred maintenance, renovation or upgrade opportunities and typically do not support significant debt at the time of acquisition. Accordingly, these properties generally must be purchased with all cash, raised mostly through equity investment. The combination of an all cash purchase requirement and the distressed nature of the properties reduces the field of potential buyers and, accordingly, affords opportunities for significant discounts. We have demonstrated that we can quickly renovate, improve and stabilize these properties within 12 to 24 months and, based on significantly increased value, re-finance them – returning significant portions of the initial equity invested, while retaining ownership for our investors. Under this strategy, our equity investors typically must wait for a period before realizing quarterly cash on cash returns, but long-term capital appreciation potential and overall returns are often greater than under the stable property strategy.
We are opportunistic investors. To date, we have focused mostly on Multifamily apartment complexes that are typically “B” or “C” grade properties (based on age and/or condition) but represent an opportunity to serve at the top end of their class within their market – based on superior maintenance, customer service and value. Most of our acquisitions to date have been in the southeastern United States – because this is where we have found the investment opportunities to be the most attractive. We remain flexible, though, and continually evaluate alternative markets. We can easily shift our focus as other markets become relatively more attractive. In our multifamily investments, we generally focus on properties that range between 50 and 250 units, were built in the early 80s or later and range in price between $2.0 million and $15.0 million.
Our annualized return on investment objectives are as follows:
- Cash on cash returns of at least 6% to 8%
- Debt reduction that provides an effective return on invested capital of 2% to 4%
- Capital appreciation of 5% or more over the term of the investment
- Combined compounded returns over the term of investment of 15% or more
We seek to provide the best value in class within the respective micro-markets for each of our properties. We focus on safety, comfort and value for our residents. We are adamant about timely responses to service and repair issues and we promote a sense of community within our properties. We continually improve each property, so that it remains attractive to our client base and so it will show at its best at the time of refinancing or sale.
By improving and maintaining the quality and livability of our properties so that we’re at the top of our class, while keeping rents within market ranges, we typically enjoy occupancy rates at the top of our markets and we build quality rent rolls over time, with lower than average turnover and delinquency. We seek to balance ongoing re-investment in our properties with providing quarterly cash flow to our investors. By keeping our assets in good condition, we help assure the sustainability of the cash flows and optimize the longer-term appreciation potential.
We take pride in every property we own and welcome opportunities to tour our properties with our investors and prospective investors.
Broadview has two important sets of customers; our residents and our investors. We serve our residents by improving their communities and their neighborhoods. We serve our investors with superior visibility and transparency into their investments, combined with positive returns.
Broadview provides timely, clear and transparent reporting on the performance of its investments. We also provide prompt quarterly distributions from the excess cash flow of the properties and we provide prompt and accurate year-end tax reporting.