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Multi-Family

Elm Tree Communities specializes in investing in multi-family properties in areas that are a 3-hour drive from our Old Saybrook, CT office. We seek investment opportunities where unemployment is low, rents are consistently increasing, and property values are rising. Our targets are special situations for ground-up development in the Class A category. We also seek investment opportunities in markets where, historically, multi-family investment has been underserved.

Investment Criteria 1 

Risk Profile/Investment Strategy

  1. Core Strategy​

    • Focus: Invest in high-quality, stable properties in prime locations.

    • Risk Level: Low

    • Returns: Steady and predictable but generally lower.

    • Example: Acquiring and managing Class A residential buildings in major metropolitan areas.

  2. Core-Plus Strategy​

    • Focus: Invest in properties similar to core assets but may require improvements or management efficiencies.

    • Risk Level: Moderate

    • Returns: Higher than the core, with potential for value appreciation.

    • Example: Purchasing a well-located apartment or industrial building that needs minor renovations to increase occupancy and rental rates.

  3. Value-Added Strategy

    • ​Focus: Invest in properties that need significant improvements or repositioning.

    • Risk Level: Higher

    • Returns: Potential for substantial returns through property enhancements.

    • Example: Acquiring an older apartment complex, renovating units, and upgrading amenities to attract higher-paying tenants.

  4. Opportunistic Strategy

    • Focus: Invest in high-risk, high-reward projects, often involving significant redevelopment or new construction.

    • Risk Level: Highest

    • Returns: Potential for the highest returns, but with more significant uncertainty.

    • Example: Developing a mixed-use residential property from the ground up in an emerging market.

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​ETC tailors our investment approaches based on their risk tolerance, current market conditions, and financial goals.

Investment Criteria 2

Asset Class

Elm Tree Communities targets suburban Class A residential buildings, generally 5 to 20 years old, well maintained, and have little deferred maintenance. ETC will seek to acquire traditional apartments, build-to-rent (BTR) Townhomes, and over 55- single-family home communities.

Investment Criteria 3

Deal Size

Elm Tree Communities seeks multi-family deals consisting of properties with 80-155 units, with a total capitalization of 15 to 50 million.

Investment Criteria 4

Hold Period

Elm Tree Communities seeks to hold our properties for 5-7 years.

Investment Criteria 5

Returns

Regarding returns, Elm Tree Communities uses two primary metrics: cash on Cash Return (CoC) and Pre-Tax Internal Rate of Return (PTIRR). Over a hold period of at least 5-7 years, Elm Tree Communities looks at investments that yield 17%—20% PTIRR and 6.5%—9.5% CoC.

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