June 1, 2017— I had the pleasure of interviewing Tony Azar (CEO) and John Azar (EVP) of MACC Venture Partners at the IMN Middle Market Multifamily Forum in Huntington Beach on May 17-18th. They were excited to be out on the West Coast for the IMN Multi Family event and talk about their business and the industry in general.
MACC Venture Partners was started in 2003 and focused initially on the single family market for approximately three years. In 2006 they transitioned to the multi family market. Today they are an owner/operator of approximately 5000 units predominately in the Southeast with the Carolina’s representing about 85% of their portfolio. The balance of their portfolio is in Florida, Georgia and Texas. Their focus has been in the B Class Value Add sector with funding primarily through equity and debt financing from high net worth individuals. They recently have started to reach out to institutional investors for capital, which they feel will help them grow to new geographic regions.
I asked them how they felt about the emergence of funding platforms like Realcrowd. They said that they have not yet participated on any platforms but that they were interested in exploring it as a potential new way of funding for their investments.
On the topic of outside investors now looking closely at their local marketplace in the Carolina’s Tony Azar said, “definitely we have more competition today in our local marketplace and especially in the 150-250 unit range where there is not an off market anymore.” John Azar went so far as to say “it’s a slugfest right now” in terms of the level of competition for deals in the Carolina region. Tony Azar said “it’s getting tougher and tougher to make the numbers work in the B Class sector with the erosion of cap rates and meeting the capital stack equity requirements.”
They are even experiencing competition from international investors specifically in the Raleigh Durham area in the A+ Class and in Core + Asset Class.
We discussed the concept of micro unit living which got it’s start in Europe and is now making it’s way to major urban markets in the U.S. They said that they are intrigued and interested in learning more about the concept and future trends but at the end of the day they are still a pretty conservative company.
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