StarPoint’s Multi-Family Division focuses on the acquisition and redevelopment of properties in select sub-markets that demonstrate strong macroeconomic fundamentals. StarPoint carefully identifies each strategic sub-market through its proprietary analysis of various macroeconomic metrics and drivers in order to deliver above market returns. StarPoint’s portfolio has continually provided exceptional returns to our investors by consistently performing at or above the 90th percentile in the industry, providing exceptional returns to our investors. Our track record and historical performance speaks for itself – since 1995 through December 2015, StarPoint’s multifamily portfolio has delivered a Return on Investment (ROI) of 155% and an Average Annualized Return On Investment of 41.37% (1).
Our firm’s expertise and niche is acquiring under-valued and mismanaged assets and dramatically increasing the value of these properties through repositioning, strategic leasing, rehabilitation and professional management. As a fully integrated company, we manage the entire investment process including: underwriting, acquisition, financing, construction/rehabilitation and property management.
Our in-house construction capability enables us to complete renovation projects at substantially lower costs than many other companies in our market. We have a thorough understanding of tenant needs and expectations due to our detailed market research and vast experience. We apply our insights in providing services and making improvements that are not only cost effective and generate the highest ROI, but also provide the most value to our tenants.
(1) For multifamily properties acquired and sold from 1995 – 2015, returns have been calculated by the accounting firm of Fishman, Block + Diamond, LLP
StarPoint’s focus in its multi-family division couples its strategic geographic selection with the acquisition of value-add assets and combines them with a solid operational model to deliver market leading returns. Our investment philosophy has been shaped over multiple market cycles and we employ cycle theory to the timing of our investments. StarPoint’s proven multi-family investment philosophy and process is based on four key principles: Product, Markets, Discipline, and Value Creation.
- Product – Focus on value add product in geographies that show specific fundamentals that will drive demand and rental growth. Leverage our experience and core competencies to ensure we execute at a high level.
- Markets – We evaluate markets on an annual basis and monitor at over 20 metrics that have proven to be drivers in the multi-family space.
- Discipline – We use industry-leading and proprietary systems to evaluate opportunities, typically analyzing several hundred deals before selecting one to purchase. We believe real estate to be a cyclical business requiring proper cycle theory and methodologies to mitigate risk and enhance long-term yields.
- Value Creation –The creation of value is a multifaceted and continuous process. Sophistication in the following areas are a tenet to the success of the business: operations, investment strategy, risk management, deep networks, construction execution, financial analysis, and information technology.
- Value-add opportunities through development, renovation, repositioning, owner mismanagement, operational inefficiencies and geographic synergy.
- Opportunistic investments which are typically more capital intensive than value-add, but with higher projected returns.
- Market targeting and arbitrage where we believe there are inefficiencies or catalyst in the market and the pricing does not truly reflect market or potential market fundamentals. Deep market analysis, timing and selection is done semi-annually.
- Cycle theory and discipline
- Off-market transactions sourced through our extensive broker network to find investment opportunities that may not always be known to the general investment community.
- Utilize tax advantages unique to real estate to help maximize returns for our investors.
- Target Markets: California, Washington State, Colorado, Florida, and Texas.
- Transaction Size: $5m– $100m
- Transaction Type: Value-add & Opportunistic.
StarPoint Investors’ Average Annual Return on Investment
La Paz and Meadow Creek Apartments
- Acquisition Price: $40,000,000
- Number of Units: 302
- Renovation Costs: $1,800,000
- Disposition Price: $52,750,000
- Hold Period: 20 Months
- Levered IRR: 41.06%
StarPoint purchased the La Paz and Meadow Creek Apartments. StarPoint immediately upgraded the entryway, and installed new monument signage at the property creating better visibility and increased prospect traffic. Next, StarPoint upgraded the leasing office and built out a brand new state of the art fitness center. A theater and business center were added to the property to round out the amenity upgrades. StarPoint improved the interiors of the units by installing vinyl plank flooring, upgrading to a stainless steel appliance package, installing granite counter-tops and updating the cabinets. StarPoint sold La Paz and Meadow Creek approximately 20 months after its acquisition and produced a 41.06% internal rate of return for its investors.
Le Club Apartments
- Acquisition Price: $57,000,000
- Number of Units: 370
- Renovation Costs: $2,100,000
- Disposition Price: $66,000,000
- Hold Period: 15 Months
- Levered IRR: 39.87%
StarPoint purchased Le Club Moorpark apartments and began its substantial renovation to the property. The property had below market rents and a low income rent restriction set to expire which allowed StarPoint to rapidly increase rents upon turnover and renovation. StarPoint installed a new appliance package, updated countertops, new cabinet faces and updated flooring throughout each renovated unit. The exterior amenities were upgraded by expanding the gym, improving the current leasing office, adding in a playground, and upgrading the main pool area. Lastly, StarPoint did a major overhaul to the landscaping throughout the property. After a 15 month hold period StarPoint sold Le Club Apartments for $9,000,000 more than its original purchase price resulting in a 39.87% internal rate of return for its investors.
The Tower at Hollywood Hills
- Acquisition Price: $15,250,000
- Number of Units: 80
- Renovation Costs: $1,800,000
- Disposition Price: $21,700,000
- Hold Period: 19 Months
- Levered IRR: 42.2%
StarPoint purchased the Sterling Apartments. While the previous owner thought that they had maximized the value and rents at the property, StarPoint saw an opportunity to do a major class A rehab and cater to the Hollywood elite. By spending approximately $20,000 per unit StarPoint was able to increase rents 58% at the property. Its rehabilitation included new appliances, new granite countertops, new wood floors, and new plush carpeting. StarPoint also updated the gym, pool area and front facade of the property. Rebranding the property “The Tower at Hollywood Hills”, StarPoint executed its disposition plan and sold the property for approximately $6,500,000 more than the original acquisition price resulting in a 42.2% internal rate of return for its investors.
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