BOSTON MULTIFAMILY: THE 42 NORTH STRATEGY - 42 North Capital
20593
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BOSTON MULTIFAMILY: THE 42 NORTH STRATEGY

TRENDS

Urbanization is a nation-wide phenomenon that is only accelerating and is being driven by two major demographic groups; the baby boomer and the millennial generations. Both generations have increasingly been migrating to Class A/B product in urban cores to better take advantage of desirable city amenities, particularly in safe, walkable cities with greater economic and cultural diversity, and a prevalence of educational institutions.

FOCUS

42 North is focused on executing this strategy in the greater Boston market, which is uniquely positioned to offer many of these desirable characteristics and is one of the nation’s most attractive urban areas in which to live. The Firm has sourced several assets that have been controlled by single owners for an extended period of time. These assets are in need of unit and/or common area and operational improvements.

THESIS

Target underperforming middle-market and small infill property. Once identified, we consider the following to unlock incremental yield and enhance value:

  • Renovation Premium – reposition assets through reconditioning, including upgrades to building systems and improved unit finishes to generate incremental yield and enhance liquidity at reversion
  • Loss-to-Lease Recapture – through selective capital improvements and deployment of attentive leasing brokers, recapture lost revenue resulting from historical inefficiencies
  • Operational Improvement – through improved property and asset management and selective physical improvements, mitigate utility, insurance, make-ready, ongoing contract costs, and other operating expenses