Our Strategy
- Investment Focus - Older, smaller (20-80 units) Class B/C workforce housing apartments with current rents 20-30% below market
- Geographic Area - Southern California
- Return Objective - Average Annual Return ("AAR") of 13-15% net to investors
- Leverage - Conservative fixed-rate debt equal to 50-60% of cost
Offering Highlights
- Institutional RIA Sponsor with a proven 30-year track record (90 assets; 15,000 units; 21% net AAR)
- Value-added renovation and repositioning of older "Class B" and "Class C" apartments serving the working class in Southern California
- Diversified real estate fund capitalizing on the Sponsor's institutional skills investing in a non-institutional "mom and pop" market
- Recession-resilient strategy due to the steady demand for workforce housing from the region's large permanent renter class in a chronically supply-constrained market
- Five unique, defensive, and structurally embedded market attributes that offer asymmetrical returns to investors
- Optimal time to buy with a wave of CRE debt maturing over the next 3 years in higher interest rate environment
- Attractive fee structure with fees commencing only when properties are acquired (i.e., no "J-curve")
- ACT NOW and receive preferential terms ( 9% preferred return)
This is not an offer or solicitation for an investment. Investments may only be made pursuant to a private placement memorandum and related documentation. Click "Invest Today" to register on our secure investor portal and download the offering documents. An investment in this strategy is speculative and involves substantial risks and could result in an investor losing some or all of its investment.
* As used herein, the "Average Annual Returns (AAR) Net to Investors" means the average compound annual rate of return net to investors after the sponsor's management fees and incentive compensation over the holding period of an investment. Past performance is no guarantee of future results and should not be relied upon as an indicator of future performance or success.
Our Track Record
Our Track Record
90
Assets
15,279
Units
$800m
Value of Apartment Assets Acquired
30+
Years of Investing
21%
Average Annual Return Net to Investors*
An Investment Built to Last
We believe our 30 years of experience as a skilled institutional real estate investor and RIA provides us with a competitive advantage in a supply-constrained gateway market with few institutional competitors, further benefitting from these five key attributes, which are difficult to replicate in most other U.S. real markets and product types:
Market Opportunity:
Five Unique Attributes of the Southern California Market
- Cycle-Resilient Renter Demand for Class B/C Apartments
- Class B/C apartments provide an essential need - affordable workforce housing - to a large permanent renter class who cannot afford to buy a home (over 60% of households in our market)
- Limited Supply-Side Risk
- Southern California is a major gateway metropolitan region with one of the most supply-constrained housing markets in the U.S. due to very high barriers to new development
- Irreplaceable Assets with Substantial Cost and Rent Advantages
- Paladin's post-renovation cost basis is typically 50% below replacement cost while projected rents are still 30-50% below the rents of new construction
- Limited Institutional Competition
- The vast majority of rental apartment buildings in Southern California are 50 units or less, investments which are deemed too small and management-intensive by most larger institutional investors
- Small scale, unsophisticated "mom and pop" owners dominate the market, creating a competitive advantage for skilled investors such as the Sponsor
- Abundant Value-Added Opportunities
- Buying from a large, fragmented pool of less sophisticated and often financially weak "mom and pop" owners creates profitable opportunities for buyers such as Paladin Realty
Our Core Fund Team
Jim Worms
Co-Founder, Chairman & CEO
Fred Gortner
Co-Founder, COO and Head of U.S. Strategy
Nickolas Gates
Vice President
Gisele Narisawa
Vice President of Finance