ACA’s success lies in GEOGRAPHIC AND WORKFORCE HOUSING specialization.
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
ONE MEGA REGION
We do not seek to acquire commodity apartment communities in a myriad of markets across the nation, but focus entirely on investing and managing value-add multifamily investments within the dynamic Texas Triangle.
We acquire workforce housing communities within the rapidly growing regions of south central Texas anchored by Austin to the north, and San Antonio 75 miles to the south, as well as in targeted submarkets in the expansive Houston MSA.
Austin and San Antonio anchor the burgeoning I-35 Corridor, which connects these attractive Southwest urban centers that are 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.
Though Houston remains tied to the fortunes of the energy sector, which has yet to regain the jobs shed in ‘14 and ‘15, ACA sees potential in the country’s fourth largest population center evidenced by Houston moving closer to full recovery in ’17. But for every two steps forward, the region took one step back. Crude prices rose along with the rig count, but oil companies continued to lose money. Developers built more single-family homes, and resale homes closed at a record pace, but vehicle sales slumped to their lowest level in six years. Houston hosted a Super Bowl in February, won a World Series title in November, but dealt with an unwelcome guest named “Harvey” in August. But next year, we see Houston taking three steps forward for every one step back. With each worker hired, home built, or container loaded at the port, Houston will be closer to full recovery. Job growth, however, won’t likely return to trend (55,000 to 60,000 per year) until the energy industry begins hiring again. Notwithstanding, 2018 promises to be a better year because two of Houston’s economic drivers—U.S. economic growth and global trade—will move forward while energy remains in neutral.
Click here to read more about the markets where we invest.
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.
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.
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.
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.
We focus on acquiring multifamily communities in path of growth locations, located in highly liquid MSAs, and within targeted sub-markets that feature compelling macro-economic and demographic characteristics. We gravitate toward submarkets that are expected to provide long-term outperformance based on proximity to job growth, transportation arteries, parks, daily-use services, and quality schools, including major universities and colleges. We are committed to our successful approach utilized since 2011 via investment in highly targeted strategies, and specific geographies.
Geographic Focus: Texas, with emphasis on Austin, San Antonio, Houston and the rapidly growing cities along the I-35 corridor connecting Austin and San Antonio.
Property Type: Garden Style, and Mid-Rise Apartment Communities. Asset Class: A to Workforce.
Property Size: 150 units or larger; single asset and portfolios. Pricing: $10.0M to $250M+
Property Vintage: 1990 and newer. However, ACA will selectively acquire pre-1990’s vintage assets in compelling locations where a mispricing, or other clear value initiative is present.
Investment Structure: All cash to seller; loan assumptions; performing/non-performing loans; mezz debt; partnership interests; multi-property portfolios; and REO Inventory.
Investment Objectives: ACA’s yield requirements are commensurate with the risks and opportunities presented by each investment. We focus on submarkets with “barriers to entry” and/or properties available below replacement cost. Additionally, we look for properties requiring a renovation or upgrade where the property’s grade or class is below that of its competition. We also seek to acquire mispriced assets affected by financial, market and/or adverse operational factors.
Holding Period: Varies with investment strategy, but typically ranges from 3-7 years.