Here at NNC Apartment Ventures, LLC, we focus entirely on investments in and operating apartment communities. For over fifteen years (our company formed in 1999), through cycles of economic expansion or recession, NNC Apartment Ventures, LLC has provided our residents with quality housing and our investors with above market returns.
What sets us apart?
There are several important characteristics that sets us apart:
We seek to meet the housing needs of our customers, our residents. For each investment we have a written plan or roadmap of how that asset will best serve the resident at a return to meet investor goals and level of investment risk. This plan serves to control the investment “mission” of the asset from the level of improvements to day to day operations. It defines what we are and what we want to be in terms of a successful investment.
We run a “flat” organization. This means, in the investment process, you deal directly with the owners. We investment our time, experience and money with you, the investor. The owners underwrite each investment, directly supervise the acquisition and due diligence process and raise the necessary debt and equity capital. We have “skin in the game” at every level. You have a question or concern, we respond at the owner level. Also, we supervise the asset management and property management functions of the company.
Monthly reporting and contact with our investors is important. We provide monthly accounting for all property operations and monthly distributions to our investors. Operating funds for an individual asset are in a separate bank account in the name of the property which is reconciled monthly. Cash activity is the basis of our accounting, we report cash received and cash spent each month in a transparent set of operating reports. Also, we can meet special reporting needs of our individual investors for additional reporting and systems. We have two licensed CPA’s supervising our accounting department. The reporting systems are geared to reflect the goals set up in the original plan or mission of the asset to measure our progress to success.
We have over 75 years of combined experience in West Coast apartment operations and ownership. The backgrounds of the owners span over five decades of successful real estate investing and management. Both owners have public and private company experience prior to forming the Company in senior executive management and Board level positions. We learned the trade from very talented mentors over the years and had direct profit and loss responsibilities. Along with responsibility, we were given authority to run the organizations for the long-term benefit and wealth-building of its stakeholders. We have the benefit of partnering with very talented organizations that demand progressive and forward looking thinking. Over our careers we have purchased over $3,000,000,000 in real estate assets
NNC Apartment Ventures, LLC investment track record
Success can be measured in many ways and from many points of view. We believe in purely financial returns to our investors as success. This return goal is detailed in the original underwriting document given to the potential investor prior to their original investment. This return goal in part of the “mission” or roadmap for the investment discussed above in the caption “What sets us apart?” We set out our assumptions and proforma operations over the life of the investment. The process is transparent and based upon research, historical operating data and prior experience. Each number in the underwriting is vetted and compared to operations of similar assets in our current portfolio. Our goal is to eliminate or minimize investment surprises. This all starts with the plan or mission for the asset and backed up by a detailed due diligence process.
Since our founding investment in 1999, we have averaged a internal rate of return ((IRR”) of over 15.0% as calculated by our outside accountants over the life-cycle of completed investments. A “life-cycle” investment is defined as assets acquired, operated and sold. The internal rate of return calculation includes the original investment, any subsequent capital investment, cash flow distributions from operations, any proceeds from a refinance and proceeds from the asset sale. One note of caution, as in any investment there is a level of risk from both internal and external factors. In 2008-2010 there was an interruption of capital markets, pricing and operations caused by the “Great Recession” financial crisis. The average internal rate of return calculation includes this period. The minimum IRR of 5.2% was achieved on a portfolio of six assets acquired in 2007 and sold in 2012. The maximum IRR of 43.0% was on a portfolio of two assets acquired in 2012 and sold in 2015. We seek to offset the effects of financial downturns and cycles by holding investments 7 to 10 years. Our average holding period of assets that have completed the “life-cycle” is 8 years.
How do we source investments?
Since 1999, we have purchased and sold over $700,000,000 in apartment properties totaling over 4,000 units in southern California and Phoenix, Arizona. We have multiple sourcing opportunities from prior business relationships, off market transactions, and broker and principal relationships. Real estate opportunities are driven by people and investment needs. Our relationships with owners, investors and real estate professionals allows us to complete for many investment opportunities. We are known for standing by our underwriting and performance during the investment process. Our reputation is our best source for future transactions.
In seeking acquisitions and planning ongoing operations, we use a focused research approach, reviewing core real estate trends, cost of capital, market research, economic factors and household and employment demographics. By understanding the core housing demand factors, coupled with a hands-on understanding of an apartment resident’s needs the Company is able to target investments that have a high long-term risk-adjusted return potential.
Who are our investors?
We have three broadly defined categories of investors. The three investor groups includes our private client group (“PCG”), investment managers and large institutional investment advisors. Each group has different investment parameters and goals and investments naturally flow to one group or another. Our private client group consists of first-time and prior individual investors seeking longer-term investments for cash flow and capital appreciation for assets ranging up to approximately $10,000,000 in value. The investment managers invest on the behalf of their clients and seek stable and long-term investments in the 7-10 year hold with an acquisition cost of $10,000,000 to $20,000,000. Large institutional investment advisors invest on behalf of large pension and endowment funds and seek investments over $20,000,000 in size. Sometimes these ranges overlap, but timing usually then dictates the investor by who is in the market at the time. We are in close communications with all groups as investment opportunities arise as to understand their needs and capital requirements.