Acquisition Criteria

WaveCrest acts as Sponsor, Principal and Managing Partner or General Partner for its investments. Our feedback and decision-making is responsive and quick as our equity is pre-committed and we don’t have an institutional investment committee process for each investment we make. We acquire middle-market apartment properties with the following general acquisition criteria:

Deal Size: $5.0 to $15.0 million with total investment capitalization well below Replacement Cost
Investment Strategy: Value-Add, un-renovated or under-performing properties to re-position and greatly improve the asset value; Core-plus with more moderate capital and renovation requirements
Property Type: Market Rate B & C Class Apartments and Mixed-use projects; also consider un-fractured Condo’s, Student Housing, REO’s and properties with surplus or under-utilized land
Target Markets: San Francisco Bay Area, Sacramento and California Central Coast
Property Size: 30 units and above, single asset or multiple property portfolios
Current Operations: Significant below market rents with strong opportunities to change operational inefficiencies
Metrics: Value-Add: Average 9.0% annual stabilized Leveraged CF returns / 7.5% Unleveraged returns; min. 2.0x equity multiple, 16% – 20% IRR; 5-7 year hold; Core-plus: Average 7.5% annual stabilized Leveraged CF returns / 6.5 Unleveraged returns; 1.75x equity multiple, 12% -15% IRR; 7-10 year hold
Leverage: Moderate leverage, can buy all-cash; will consider assumption of underlying debt
Deal Sourcing: Off-market and minimally marketed properties