OUR INVESTMENT STRATEGY

Krog Street Partners (“KSP”) primary investment focus is the acquisition of A, B and C market-rate multifamily communities in Southeast United States markets, which exhibit moderate to significant population and job growth, low unemployment, diversified economies, and barriers to new development, among other criteria.

Our business plan is to leverage our industry-wide business relationships to discover favorable opportunities, reposition acquired properties to unlock unrealized income through pinpointing and correcting operational inefficiencies, conducting minor to moderate renovations due to deferred maintenance or functional obsolescence and rebranding the asset in the market.

Below is a detailed criterion, as it relates to our investment strategy. If you have an investment opportunities that may fit our strategy, please email us at: info@krogstpartners.com

CRITERIA

DETAILS

Asset Class & Property Type

Multifamily
Class A, B, or C apartment communities with repositioning opportunities
At least 50% of units available for value-add improvement program
Year of initial construction roughly within 1970s – 2020s

Target Markets and Metros

Southeast United States
Broader markets of Atlanta, Nashville, Knoxville, Chattanooga, Asheville, Raleigh, Charlotte, Charleston, Savannah, Jacksonville, Tallahassee, Orlando, Tampa, Montgomery, Huntsville, and Birmingham
Class A, B, or C apartment communities with repositioning opportunities
At least 50% of units available for value-add improvement program
Year of initial construction roughly within 1970s – 2000s

Submarket

Supply constrained sub-markets / neighborhoods with high barriers to entry
Stable and diverse employers with attractive job growth rate and household income levels
Above 90% submarket occupancy with sustained positive net absorption and rental growth for past 3 years

Investment Size

$15 - 100 million asset size

Investment Considerations

Positive trending T-3’s and T-6’s from T-12’s
Operationally mismanaged asset
Assets below market rents but have benefited from significant capex investment
Located in submarkets with strong demographics
Assets that have signifant loss to lease or value-add upside through common area or unit upgrades

Leverage

60 - 70% LTV with maximum available I/O
Flexible for shorter hold period
Agency financing, Life Company, Regional Banks and debt funds considered in a competitive process

Typical Hold

3 - 5 Years

Target Returns

Minimum 17-21% IRR (Project level)
7 - 10% average Cash-on-Cash over the Hold Period (Project level)

Other Considerations

Single assets or portfolio deals
Preference for off-market transactions
50 - 80 days close period from the date of receipt of deal information