We live, own and operate in the markets where we invest. We believe this is essential to building the key relationships and gaining the local market knowledge required to optimize operations and maximize returns.
Our local knowledge gives us a tremendous edge in all phases of the investment process, including acquisitions and dispositions. Our local property and asset managers not only achieve operational efficiencies through our vertically integrated platform, but also regularly identify important sub-market trends and market nuances that are often missed, or unseen by out-of-state sponsors, and absentee managers.
Managing large apartment communities is often challenging, and poor managers are prevalent in the workforce housing industry. We understand that the condition of the workforce assets we invest in, together with the demographic of the tenancy that occupies our communities, often result in unique and often complex operational problems. However, we have fused together a unique combination of institutional experience and protocols, combined with an entrepreneurial mindset, that allows for nimble yet disciplined problem solving.
Our investment strategy relies on identifying and capitalizing on operational inefficiencies that have resulted in an asset operating below its potential. Our investment team is comprised of experienced professionals whom are committed to adding value to our portfolio. We sincerely strive to infuse multifamily real estate expertise with an entrepreneurial spirit. Our culture has not only produced consistently attractive returns, but also sustainable value to the communites we own and manage.
ACA’s success lies in GEOGRAPHIC AND WORKFORCE HOUSING specialization.
We acquire workforce housing communities in the rapidly growing regions of south central Texas anchored by Austin to the north, and San Antonio 75 miles to the south. This area encompasses the burgeoning I-35 Corridor that connects these dynamic Southwest urban centers, which are consistently home to many of the fastest growing zip codes in the U.S. The I-35 Corridor is one of the most rapidly expanding regions in the nation, currently home to over 4 million people, and forecast to grow to 6-7 million people by 2030. ACA believes that the region - driven by technology development and economic trade - will ultimately result in a technopolis surpassing Dallas-Ft. Worth.
Metro Houston is also a target market for us. Despite sitting atop major U.S. metros apartment vacancy rankings (6.8%) as of Q416, and also ranking in the bottom ten for national employment as complied by Marcus & Millichap in 2016, we are confident that Houston deserves our focus. Our contrarian view is supported by Houston adding 125,005 residents, a 1.9% increase, in the 12 months ending July 1, 2016, according to recent estimates by the U.S. Census Bureau. Houston saw the second largest gain of any U.S metro via a combination of births and domestic as well as international migration during 2016. The forecast growth of 1.9% for 2017 underscores a Houston maxim - the region finds a way to grow even when faced with low oil prices. Its push towards economic diversification is attractive to ACA. Today, Houston is the nation's 4th most populous city, and also the 4th largest metropolitan area in the U.S. ranked by output, with the MSA accounting for 3% of total U.S. GDP. As a result, metro Houston will require more than 200,000 new apartments by 2030 to meet forecast demand. Prior to hurricane Harvey, moreover, Houston ranked as the nation's 3rd most undersupplied apartment market.
ONE ASSET CLASS
We focus on, and invest in workforce apartment communities that cater to the working class population essential to economic growth. Over the past seven years, this multifamily asset class has produced the highest occupancy rate, and greatest increase in rents, due to the high demand of workforce housing in the expanding regions where we invest.
We acquire and invest in workforce housing that is home to the population segment that forms the backbone of economic growth and expansion. We acquire apartments in this sector because of their low space market volatility and tendency to produce the highest risk-adjusted returns across all commercial real estate sectors. Apartments have shown far greater resiliency in holding their value during market downturns, and typically perform best in rising interest rate environment. By adhering to this stratagem, and acquiring assets in our targeted submarkets at below replacement cost, we have produced consistent returns and preserved investor capital.
ONE VERTICALLY INTEGRATED INVESTMENT PLATFORM
Our wholly-owned subsidiary, ACA Property Management, manages our portfolio, thereby insuring the intensive needs of workforce apartment ownership are met in the most efficient, and cost-effective manner possible. We believe a vertically integrated property and asset management platform to be imperative insofar as achieving economic scale and management efficiencies are concerned. Our team seeks to optimize value by dedicated implementation of a detailed business plan for each individual property in ACA's portfolio. We generate demand for our communities via specific brand strategies and inspired creativity from our experienced Marketing and Leasing professionals. In short, every investment we make is expertly managed through our vertically integrated management platform to acquire, shape, optimize and realize value.