Current credit conditions in the US are creating market inefficiencies and distortions in California multifamily real estate that Drake is well positioned to exploit. Investments to be targeted will have the following characteristics:
Multifamily and office real estate remains a high performing carefully chosen inflation protected long term asset class in select California markets.Investments will be made in the San Francisco Bay Area and Los Angeles. Both of these markets have strong economic, demographic and real estate fundamentals.Strong B or better location.
Good physical location is one of the factors that significantly minimizes market risk, while delivering exceptional current and total return on investment.Purchase price of $15M - $25M,
Concentrating on this market niche maximizes return without competition from large institutional investors who typically concentrate on larger assets.Expected internal rates of return on investment of 18% or better.
Each asset will have the inherent characteristics necessary to drive rents to the 75%+ market percentile; mitigation strategies may range from removing encumbering below-market leases, to repositioning the asset and its tenancy in the marketplace.
Drake will employ its operational expertise to enhance occupancy and tenant retention, enhancing the asset’s income stream and value, and delivering superior riskadjusted returns.