Focuses on Class B+/A- suburban apartments in thriving markets.
Strategy
Investment Approach
Creates value through moderate renovation and better management.
Does not invest in distressed assets.
Well-located assets in growing markets form the foundation of Green Leaf’s investment.
Asset Class Benefit
- Class B+/A- assets attract a wide demographic, including working-class populations, downsizing baby boomers, and millennials entering the rental market for the first time.
Supply & Demand
- U.S. multifamily supply growth has been concentrated in urban infill, high-income markets. This has created high demand for nicer suburban products, making 2000 and newer class B+/A-housing incredibly attractive.
Affordability
- Lightly renovated, suburban Class B+/A- assets with quality amenities provide a more affordable rent-to-income proposition. Millennials account for 50% of the total renter pool (approximately 54 million in total). Slower wage growth has delayed their home ownership.
Value-Add Philosophy
- Instead of overspending on renovations, which forces a property to compete with Class A properties, we renovate to B+/A- standards and perform deferred maintenance to allow for efficient property operations.
Market Hedge
- Multifamily properties offer both an offensive and defensive investment strategy. Deflationary periods increase the renter pool, occupancy, and rents. Inflationary periods increase asset values and rents.
Investment and Underwriting
The Green Leaf leadership team’s deep industry relationships yield deal flows in a wide range of appropriate metropolitan statistical areas (MSAs). Along with our understanding of current debt parameters in underwriting acquisitions, these industry relationships allow our team to acquire opportunities quickly and efficiently.
IT'S ABOUT THE NUMBERS—AND WHAT’S BEHIND THE NUMBERS.
We acquire properties that meet our standards for current income and long-term appreciation. Applying consistent and rigorous underwriting standards helps us avoid “paying up” for assets.
Metrics
- Stabilized cap rate
- Spread to 10+ year fixed-rate financing
- Cash-on-cash return
Downside Risk
- Loan-to-value and debt coverage focused on principal protection
- Purchase at or below replacement cost
- Robust diversified economic base in our markets
- Geographic diversity within the Fund
Community Populations
- Average or above-average population growth
- Metro areas with tech, bio-science, and healthcare employment growth
Renter Income And Affordability
- High in-place affordability at the time of purchase
- Strong organic rent growth and a large pool of potential renters
Market Liquidity and Depth of Buyers
- Highly traded markets for pricing visibility and strong liquidity
- Deep buyer pools for price competition and term maximization
Regional Growth
- Rent growth through natural supply or demand imbalance
- Strong higher-end employment growth
- Inbound migration from higher-income areas chasing affordability
Going-in Cap Rate Comparison vs. Other Metros
- Comparison of in-place yields with regional growth prospects between metros allows the Green Leaf team to spot capital market mispricing
TARGET MARKETS
Green Leaf’s leadership has identified certain market characteristics that enable success with our investment model. Our team has significant execution experience in each of our target markets.
Pro-business municipalities
Large university systems
Strong population, employment, and wage growth
Low cost of living compared to primary gateway/coastal markets
Compelling net-migration statistics
High quality of life
Substantial gap between Class A and Class B rents, where new products can’t be built without significant subsidies
Large-scale investment in local infrastructure
Markets where education, government, healthcare, and technology employment significantly beat the national average of 25%
Technology
Green Leaf Capital Partners employs industry-leading management solutions. Operational and financial details for each property can be tracked and accessed anytime, from any location, through state-of-the-art software such as Entrata, Conservice, and E-Premium. This cloud-based systems enable Green Leaf to provide superior property management and marketing, while maximizing yields for investors.
