WPCM believes that a confluence of factors including: preferences of Gen Y for walkable amenities, demographic trends, increasing commute times and high gas prices have all led to increased urbanization across many parts of the country. In some markets, such as regions in the Southeast U.S., urbanization is far from complete.
WPCM is primarily focused on acquiring multi-family and retail investments in urban markets. Unlike many other real estate product-types, WPCM believes the demand drivers for multi-family and retail properties, coupled with the relatively high barriers-to-entry in urban areas, should produce a long-term supply/demand dynamic that is favorable to landlords. WPCM considers suburban positions if (i) the investment basis is compelling relative to reproduction costs, (ii) the asset exhibits some competitive advantages when compared to other product in the marketplace, (iii) the yield compensates investors for market and liquidity-risk and (iv) the demand drivers in the submarket are stable.
WPCM employs two investment strategies: (i) for opportunities with higher risk profiles, acquire transitional assets that require operational and/or capital structure solutions which can be executed over a 2 to 5 year period and (ii) for opportunities with lower risk profiles, acquire high-quality real estate which, through aggressive management and appropriate financing strategies, provide investors with attractive long-term returns.
WPCM will target select markets that attract less institutional interest, but offer stable demand and/or long-term job growth trends. Compared to the “gateway cities”, yields are higher in these markets and can be leveraged to provide attractive cash-on-cash returns. Many markets in the Southeast and Southwest benefit from the presence of healthcare, education and technology jobs.
WPCM believes these markets also offer strong business environments that should support high population and job growth over the next 5 to 10 years.