Tuesday, July 23, 2024

EquityMultiple Sees Broad Opportunity Across CRE Sectors, Brings Unique Offerings to Investors

EquityMultiple, a leading real estate investment platform, is maintaining its focus on a diverse array of commercial real estate assets, including essential retail, industrial properties, and multifamily housing. With market conditions increasingly bringing dislocation-based opportunity to middle-market real estate operators, the firm believes now is an opportune moment for individual LP investors to re-enter the market.

EquityMultiple's strategic expansion aims to democratize access to high-quality commercial real estate investments, traditionally available only to institutional investors alongside highly vetted sponsors. The platform offers individual accredited investors the rare opportunity to invest in essential retail and industrial sectors, which are poised for growth and stability, as well as multifamily housing, supported by broad macroeconomic headwinds. 

Market Timing and Opportunities 

Current market conditions indicate that we may be approaching a low point, presenting a compelling opportunity for investors to engage in commercial real estate. By targeting essential retail, industrial assets, and multifamily housing, EquityMultiple is aligning its investment strategy with sectors that demonstrate strong fundamentals and resilience.

Essential Retail and Industrial Focus 

Charles Clinton, CEO of EquityMultiple, emphasized the firm's commitment to these sectors, stating, "Our analysis shows significant potential in essential retail and industrial properties, driven by robust demand and stable rental growth. These sectors are essential to the economic infrastructure and can offer attractive risk-adjusted returns." 

The essential retail sector encompasses grocery-anchored centers, gyms, pharmacies, and other necessity-based personal care or wellness retail establishments. These assets have shown consistent performance even during economic downturns due to their critical role in daily life. Specifically, foot traffic at strip and power centers is almost at par with pre-COVID/2019 levels, with grocery stores relatively even and fitness/personal wellness at a strong ~15% increase relative to pre-COVID traffic. And while brick-and-mortar retail has generally struggled since the advent of e-commerce, especially during the COVID pandemic, many well-located properties remain overlooked and undervalued, creating opportunity for investors.

A good example of such an opportunity is EquityMultiple's investment in a light value-add retail investment in Charleston, South Carolina, anchored by a Planet Fitness and located adjacent to a 300-unit multifamily project. Almost as important is EquityMultiple's commitment to partnering with best-in-class sponsors with deep expertise and strong conviction in the market and sector. EquityMultiple is partnering with O’Connor Capital Partners, a multi-generational real estate investment firm that has successfully invested over $6B in AUM and has a strong directional thesis in “essential retail.” 

On the other hand, the industrial sector, particularly warehouses and distribution centers, continues to benefit from the rapid growth of e-commerce. With the need for increased logistics and storage capabilities, particularly in the last-mile phase of the supply chain, industrial properties are experiencing heightened demand and stable occupancy rates. 

Multifamily Housing: A Strategic Focus 

EquityMultiple maintains a constant focus on the multifamily housing sector, recognizing its critical role in the functioning of society. The firm's recent whitepaper highlights that multifamily housing is supported by macroeconomic tailwinds and could offer stability during periods of heightened volatility. Namely, the broad multifamily investment thesis is supported by underbuilding (lack of supply) and demand from renters in select markets as a result of inflated single-family home values, high mortgage rates, and high rates of household formation. 

Marious Sjlusen, Chief Investment Officer at EquityMultiple, explained, "The multifamily market benefits from a persistent housing shortage and strong renter demand, which are likely to continue supporting long-term growth. With interest rate stability expected to drive transaction volumes in 2024, this sector presents a resilient investment opportunity."

As part of its focus on the multifamily sector, EquityMultiple created the Foundations Multifamily Portfolio, a diversified collection of multifamily assets that can be accessed with a single, low-minimum investment.  

Enhanced Accessibility for Individual Investors

EquityMultiple's platform is designed to provide individual investors with unprecedented access to these high-potential asset classes. Through meticulous sourcing and rigorous evaluation processes, the firm ensures that each investment opportunity aligns with broader market trends and offers the potential for superior returns. 

The firm employs a proprietary scoring methodology for major CRE asset classes, identifying high-potential markets for each. Then, the firm vets sponsors (the firms raising capital for these investments) and structures investments to provide the highest possible degree of protections to individual investors.  

Marious Sjlusen highlighted the firm's proactive approach, "By focusing on essential retail, industrial properties, and multifamily housing, we are not only tapping into sectors with solid growth trajectories but also providing our investors with opportunities to diversify their portfolios in a meaningful way." 

About EquityMultiple

EquityMultiple is a premier investment management and technology firm that offers unique real estate private equity and private credit opportunities to accredited investors. Since its inception, EquityMultiple has facilitated over $5 billion in commercial real estate transactions, partnering with experienced real estate operators in key markets across the United States. The firm's innovative platform provides investors with access to individual properties and funds, blending cutting-edge technology with institutional-quality real estate investing. 

For more information about EquityMultiple and its focus on essential retail, industrial, and multifamily real estate investments, please visit EquityMultiple.com.

Contact Information:
Jessica Lombao
[email protected]


Original Source: EquityMultiple Sees Broad Opportunity Across CRE Sectors, Brings Unique Offerings to Investors
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