North River Partners Focusing on California's Long-Term Multifamily Tailwinds
While the headlines in California often focus on political or economic challenges, some investors are underwriting something and focusing on the long-term fundamentals. This includes demand, demographic trends, job growth in globally significant industries and the housing shortage.
Private credit firm North River Partners is one of those investment firms that sees the upside in the asset class in the Golden State.
"Markets reward the ability to distinguish between noise and signal," Jeff Rosenfeld, managing partner of North River Partners, told GlobeSt.com.
"Institutional developers continue to invest [in multifamily] because the underlying signal remains compelling: exceptional talent, globally significant industries, and real estate fundamentals that have consistently justified premium valuations."
Rosenfeld finds San Diego, the Inland Empire, the East Bay and Sacramento most compelling.
"[These markets] have a good mix of strong employment dynamics and an acute housing shortage that inures well to rent growth and tight vacancy rates," he said.
North River Partners is focused on multifamily housing and 55+ independent living, he added — both of which have demographic tailwinds.
"The 55+ / Independent Living space is severely undersupplied relative to the incoming 'silver tsunami,'" Rosenfeld said.
Smart, young, ambitious professionals in media and technology are prime prospects for rental properties, according to Rosenfeld. That's in addition to the robust manufacturing and biotech sector.
According to a Crexi May multifamily report, vacancy in California dipped to 14.9 percent, a result that occurred during peak leasing season.
Looking ahead a few years, Rosenfeld said demand for seniors housing and independent living will persist, as "it's still being slept on and the magnitude of the tailwind is still understated and underestimated."
Source: GlobeSt/ALM