Objective focuses on acquiring under-managed and under-capitalized apartment assets that will benefit from our active asset management and physical repositioning. We invest in primary city suburban markets and secondary cities in the Western US. Our sophisticated and proprietary research tools prioritize target
markets in order to focus on the best locations while our experience and deep industry-wide relationships create transaction opportunities not otherwise available to the market. Our scale allows our principals to stay highly engaged at the project level and help to create value in each step of the process.
The apartments sector, relative to other property types, has produced the highest returns with the lowest risk, generating superior risk-adjusted returns over multiple cycles dating back more than 50 years. We believe that the apartment sector will continue to be attractive going forward and will generate excellent risk adjusted investment opportunities for our investor clients. In order to execute our investment strategy the firm will focus on the following four areas:
Mid-Cap Properties – Objective focuses on assets with values in the $25M - $75M range, which typically translates to 100 - 400 units. These assets have less competition from the largest institutional investors but have the same operating scale as larger and more expensive properties to improve financial efficiencies and common area amenities that attract and retain residents.
Middle-Income Residents – The country’s large and growing population of renters requires safe, attractive and affordable housing, while income disparity in the US and unaffordability of traditional single-family homes have created a growing need for rental apartments. OREP targets properties occupied by stable and employed residents who lack the means for near-term homeownership that will lead to persistent renters.
Relative Value Locations – OREP target markets are supported by the macro view that renters are seeking a combination of affordability and quality of life. This trend is illustrated by populations shifting to more affordable suburbs near large tier one metros and to secondary cities offering similar benefits of larger cities but on a more manageable and affordable scale.
Income Growth Creation – Operational execution drives our performance. We target assets that are under-capitalized and under-managed which offer an opportunity to enhance the physical property, resident services and expense management. Doing so leads directly to increased rents, less frequent resident turnover and lower delinquency and improved income and cashflows. This ultimately drives investment performance and total returns.
Investment Sourcing Advantage
Objective’s leadership has built meaningful industry relationships over 30 years, resulting in several “off-market” or “limited” marketing investment opportunities every year. Because Objective focuses on relatively few markets, we spend time locally establishing first-hand relationships with owners and service providers that generate market intelligence and deal flow. Our reputation for a high level of professionalism and nimbleness gives us a meaningful advantage when vying for transactions and decreases execution risk for a seller. We find that by maintaining relationships over time and staying focused on our messaging to the marketplace, we create unique investment opportunities often overlooked by larger generalist firms.
Capital Markets Advantage
Each investment purchased is complemented by a coordinated financing strategy tailored to the specifics of the investment. Objective maintains strong relationships with capital markets intermediaries and will use them to support the financing process. Additionally, we maintain direct relationships with lenders. We negotiate the best terms by having an abundance of market information.
We engage best-in-class local brokers affiliated with national platforms that support the local teams. When a property is sold, preparations begin well in advance. This includes creating the best possible value proposition for new buyers to be used consistently in selling the property's best attributes.
Asset Management Advantage
Our active asset management creates clear expectations, communications, accountability and results. Mr. Morrison was head of Asset Management for TIAA-CREF for nearly a decade, overseeing a large team that managed multi-family and commercial properties. Frank Iaffaldano has held senior positions as a principal in the hospitality industry. This collective experience sets our bar high, and we strive to provide our residents with a physical environment and a level of service that differentiates our assets from a typical apartment experience.
We partner with local property management firms and leverage these firms to enhance our operations. Objective takes a hands-on approach, being active in multiple steps of the tenant experience. Detailed investment plans and budgets are created for every asset which include timing of key objectives over the holding period. Annual budgets and business plans are maintained with leasing and operational and capital improvement detail. Monthly review of property reports, weekly discussions with onsite staff and frequent trips to the asset and market are key to our process.
Objective has created a proprietary process to determine target markets to optimize performance. OREP’s research scrutinizes and monitors 20+ western metro areas with a population greater than 1 million and more than 50,000 apartment units. We further refine our investment scope by focusing on western markets with attractive demographics, supply-demand balances and a strong value proposition from a capital markets perspective, typically resulting in 8-12 markets for active investment. These target markets have generally produced returns that have outperformed the national average over the same period.