The Five Pillars Of Resiliency: The Foundations Of Grubb Properties Essential Housing Strategy
All white papers posted were created by the listed authors who are solely responsible for the research, finding and all materials contained therein. Pensions & Investments has not verified or edited the materials and does not necessarily agree or disagree with the analysis and positions expressed by the authors. Reference to any company, product or service does not imply recommendation or sponsorship by Pensions & Investments.
Our Investment Strategy Focuses On Essential Housing Which We Believe To Be One Of The Most Resilient Asset Classes
Despite a backdrop of the biggest need, there is little new construction within this crucial sector. For the investor, essential housing provides a stronger margin of safety than building luxury apartments, because essential housing is driven by demographics rather than by how well the economy is performing at any given moment. The large Millennial and Gen Z populations are already facing a housing shortage, and the cost pressures constraining the supply are only going to intensify over the next few years.
Posted On July 28 2022 By Admin
BY KALI PERSALL
North Carolinabased Grubb Properties raised more than $300 million for two real estate funds in 2019, including $140 million for its Qualified Opportunity Fund and $160 million for its Southeast Real Estate Fund VI.
The company, which specializes in multifamily and office properties, said it expanded to new markets where it sees elements of strong resiliency with the capital raise.
The QOF has made five acquisitions to date, including commercial properties in Chapel Hill, N.C. Alexandria, Va. and Columbus, Ohio as well as multifamily development projects under the companys Link Apartments brand in Washington, D.C., and Winston-Salem, N.C. The fund also has two properties under contract in Charlotte, N.C.
Fund VI has acquired commercial properties in Fairfax, Va., and Smyrna, Ga., along with multifamily properties in Winston-Salem, Charlotte and Atlanta.
We are proud of the new relationships we have built and the promising projects we have acquired in both these funds, said Clay Grubb, CEO of Grubb Properties. We look forward to continuing to enhance communities with housing options that are more affordable to many of the folks being priced out of urban areas today.
Grubb Properties said in a statement that it plans to launch another QOF this year to take advantage of a strong pipeline of projects in opportunity zones.
Since 2002, the company has completed more than $1 billion real estate investment transactions.
Also Check: Step By Step Guide To Investing
How Do We Tackle The Problem
There is an achievable solution to the housing gap that serves all stakeholders: investors, potential residents, and our broader community. For example, Grubb Properties enacts this solution through our Link ApartmentsSM brand, which is focused on intelligent design and resident amenities to provide a lower cost, urban infill living opportunity.
In developing Link ApartmentsSM, Grubb Properties has focused on two key differentiators: location and price point. We choose urban locations that are near community amenities, transit options, and major counter-cyclical employment anchors such as research universities and medical centers. We also target rents that are affordable to residents earning 60-140% of area median income.
How are we able to achieve those prices in these target locations, where virtually no other multifamily product is being developed at this price segment? We drive value through a variety of proven proprietary methods, such as innovative site acquisition, shared parking, tax incentives, grants, and more. For example, we focus on just six highly efficient floor plan types that we replicate across all our communities. This is unique in the industry, where the standard is often more than 25 unit-types.
Focusing on the customer delivers both a better resident experience and the returns investors expect through a truly differentiated product that addresses a major market gap.
Explore The Full Issue
The new 2022 AFIRE International Investor Survey Report reveals future institutional investment trends as the pandemic transformed how we live, work, and play.Gunnar Branson and Benjamin van Loon | AFIRE
What is it that makes London, Stockholm, Berlin, Amsterdam, and Paris the top European cities for office investment? And what could this mean for other global cities?Dr. Megan Walters | Allianz Real Estate
Be careful about advice you hear from surveys it will not always play out as expected.Jim Costello | MSCI Real Estate
Outside of WWI and II, the US working age population has never declined. As of 2021, that statement is no longer true.Stewart Rubin and Dakota Firenze | New York Life Real Estate Investors
Two years after offices closed due to the COVID pandemic, the debate over the longterm future of the office continues. What should office investment look like going forward?Dags Chen, CFA Ryan Ma, CFA and Ryan LaRue | Barings Real Estate
US garden apartment investments are offering outsized return potential but access remains a challenge.Martha Peyton, PhD | Aegon Asset Management
As an increasingly popular asset class for institutional investors, single-family rentals are supported by strong future demand drivers to propel sector outperformance.Daniel Manware | Nuveen Real Estate
The US is in the middle of one of the biggest housing crises that the country has ever seen. It needs a more resilient approach to housing.Todd Williams | Grubb Properties
Recommended Reading: Platform To Invest In Startups
Grubb Properties Closes Opportunity Zone Fund Ahead Of Reit Consolidation
Grubb Properties, a commercial real estate firm and opportunity zone fund sponsor, has closed its 2021 Grubb Qualified Opportunity Fund LLC with $152 million raised.
Grubb Properties, a commercial real estate firm and opportunity zone fund sponsor, has closed its 2021 Grubb Qualified Opportunity Fund LLC with $152 million raised. According to the company, the fund raised $63 million from investors in December alone.
This brings the total raised across the three funds in its qualified opportunity fund series to $370 million. Grubb plans to consolidate its 2019, 2020 and 2021 qualified opportunity funds into a private real estate investment trust, dubbed the Link Apartments Opportunity Zone REIT.
The REIT was approved by shareholders in late 2021 and is expected to launch in the first quarter of 2022.
The firms primary strategy is to provide essential housing through its Link Apartments brand, which are geared to those earning between 60 percent and 140 percent of area median income. There are currently 19 communities stabilized or under construction across the country, totaling 4,935 multifamily units, with 16 additional communities in the pipeline.
The REIT will launch with the 15 communities previously owned by the three qualified opportunity funds, including the recently announced Link Apartments developments in Los Angeles and Oakland, California and Queens and Hempstead, New York.
Grubb Properties And Rubenstein Partner On Another Office Acquisition
Grubb Properties and Philadelphia-based real estate investment firm Rubenstein Partners recently partnered to acquire a vacant 467,000-square-foot office property in Research Triangle Park that was built by telecommunications company Ericsson. The two firms spent $26 million to acquire the two-building development, and they plan to spend an additional $10 million on renovations and campus upgrades.
This is the second deal Grubb and Rubenstein have done together in the Raleigh-Durham market. And in Charlotte, Rubenstein previously owned the NASCAR Plaza office building uptown with Trinity Capital Advisors. The two firms sold the building almost a year ago to Parkway Properties after signing Chiquita Brands International to a 138,000-square-foot lease.
I recently caught up with Daniel Doyon, a vice president and director of acquisitions at Rubenstein who covers North Carolina and Florida for the firm, to get his investment perspective on the Charlotte and Raleigh markets and why selling NASCAR Plaza was bittersweet.
What appealed to you about this Ericsson property?
Back in 2010, you purchased a big block of vacant space with NASCAR Plaza as well.
How do the Raleigh-Durham and Charlotte markets compare from your perspective?
You May Like: How To Invest In Crypto Exchanges
Rubenstein Partners And Grubb Properties Close $127m Sale Of Lenovo Enterprise Campus To 90 North Real Estate Partners
Partnership Executes Business Plan Ahead of Schedule, Selling 485,000 SF Research Triangle Buildings Following Blockbuster Lease to Lenovo
PHILADELPHIA—-Affiliates of Philadelphia-based Rubenstein Partners and its partner Grubb Properties have completed the sale of a 485,000 square-foot corporate office campus in North Carolinas Research Triangle Park to a joint venture between UK-based 90 North Real Estate Partners and Dubai-based Arzan Wealth for $127 million. The transaction, brokered by Cushman & Wakefield, closed approximately 15 months after Rubenstein and Grubbs acquisition of the then-vacant property, and less than a year after the partnership signed global PC manufacturer Lenovo to a long-term lease of the entire campus.
The acquisition also included a nearly 40,000-square-foot building, currently being built as a research and development center for Lenovo. The site can accommodate an additional 100,000 square feet of development.
This is the second time Grubb Properties has partnered successfully with Rubenstein Partners, said Clay Grubb, CEO of Charlotte-based Grubb Properties, a leading Southeastern U.S. real estate investment company. We are proud to have delivered Lenovo an incredible working environment in an extremely tight timeframe.
About Rubenstein Partners
About Grubb Properties
About 90 North Real Estate Partners
Are You An Executive Hr Leader Or Brand Manager At Grubb Properties
Claiming and updating your company profile on Zippia is free and easy.
- Grubb Properties
Zippia gives an in-depth look into the details of Grubb Properties, including salaries, political affiliations, employee data, and more, in order to inform job seekers about Grubb Properties. The employee data is based on information from people who have self-reported their past or current employments at Grubb Properties. The data on this page is also based on data sources collected from public and open data sources on the Internet and other locations, as well as proprietary data we licensed from other companies. Sources of data may include, but are not limited to, the BLS, company filings, estimates based on those filings, H1B filings, and other public and private datasets. While we have made attempts to ensure that the information displayed are correct, Zippia is not responsible for any errors or omissions or for the results obtained from the use of this information. None of the information on this page has been provided or approved by Grubb Properties. The data presented on this page does not represent the view of Grubb Properties and its employees or that of Zippia.
Grubb Properties may also be known as or be related to Grubb Properties, Grubb Properties, Inc. and Grubb Properties, LLC.
Don’t Miss: Best Place To Invest Online
What Is The Benefit For Investors
For the investor, essential housing provides a stronger margin of safety than building luxury apartments, because essential housing is driven by demographics rather than by how well the economy is performing at any given moment. The large millennial and Gen Z populations are already facing a housing shortage, and the cost pressures constraining the supply are only going to intensify over the next few years.
Essential housing is desperately needed in both gateway markets and high growth cities and can be an appealing product for investors looking to enter those markets. Gateway markets like Los Angeles, the Bay Area, and New York City have experienced decades of housing challenges, and the problem is worsening.
The pandemic created a unique opportunity for developers to enter these resilient markets at a discount as people temporarily shifted from high-density cities to lower-density ones. This short-term shift in demand for housing created buying opportunities for sites in these dense markets, lowering the cost and availability of one of the most critical inputs: land.
High-growth markets, by definition, have a high demand for housing that is driving construction costs up even further. These cities, such as Charlotte and Atlanta, are struggling to build enough housing, and the housing they are building is mostly luxury and therefore unaffordable to many of their residents.
Grubb Properties Makes A Mark In Opportunity Zone Apartments
Charlotte developer Clay Grubb is finding a way to balance unprecedented demand for affordable housing with an investment vehicle that meets the capitalist desire for solid returns.
Since 2019, Grubb Propertieshas raised about $350 million from about 800 individual investors to develop apartments in tax-advantaged Opportunity Zones. Late last year, shareholders of three Grubb funds agreed to consolidate into the Link Apartments Opportunity Zone REIT.
Grubb isnt aware of another North Carolina group that has raised as much money for Opportunity Zone multifamily investments, says Clark Spencer, the funds portfolio manager and a Grubb managing director.
We thought the scale of the combined portfolio would help our investors from a cost and diversification standpoint, he says.
Grubb funds have financed apartments under the Link Apartments brand in markets stretching from Washington D.C. to Los Angeles and northern California. The 19 Link Apartments communities have about 4,935 units, while 16 more sites are in development or under construction. There are Link communities in the Charlotte, Triad and Triangle metro areas.
The company has been able to keep rents lower than many rival apartment developers by focusing on design and cost efficiencies. It acts as construction manager and offers only six floor plans, while some competitors have dozens of different ones. In an extreme case, Spencer recently visited a 397-unit apartment complex in Colorado that had 61 floor plans.
Recommended Reading: How To Invest In A Company Before It Goes Public
Why Contact Tobin & Company
Most websites deploy contact us and then companies are disappointed when no one does.
Contact Tobin & Company and heres what you get well listen. And we will giveyou our opinion about whether our services might be a good fit for your needs.
Tobin & Company Investment Banking Group LLC provides a range of investment banking services to the lower middle market. Tobin & Company prides itself on offering a refreshing approach to investment banking with our collegial atmosphere that allows us to connect on a personal level with business owners, entrepreneurs and their investors.
What Is Essential Housing
For this article, we can define essential housing as product for households earning more than 60% of an areas median income , putting these households above the cutoff for a public housing subsidy, but less than 140% of that AMI, putting them below the threshold to afford luxury housing. Under this definition, essential housing should serve about 41 million households in the US, offering working professionals an affordable, quality housing option in urban markets.
Essential housing is not to be confused with workforce housing, which largely serves middle-income working families through existing rental product. Workforce housing often has a greater number of configurations, with 24 bedrooms, and is typically located in suburban areas close to schools. While this is a critically important component of the US housing stock, these unit configurations and locations largely dont fit the needs of young people entering the workforce today. Essential housing is also not luxury housing, which targets those earning above 140% of the AMI, and which is currently saturating the market in most cities. The Wall Street Journal found that 80% of the 371,000 new rental apartments expected to be built in 2020 were luxury properties.2
Despite this demand, housing supply has remained at historic lows because of the cost challenges in building new housing. Several factors contributing to the rise in cost are:
Don’t Miss: Investment Property Loans No Money Down