Alpha Insights

The Current Commercial Real Estate Landscape

3Q20

Each quarter, we like to share our insights on the current real estate market as well as broader economic conditions, and how that informs the opportunities we make available to the Alpha Investing network.

In this edition of Alpha Insights, we would like to invite a deeper discussion on the broader economic and commercial real estate landscape through our updated CRE whitepaper. We are also providing a brief update on our portfolio, including recent transactions.


The Current Commercial Real Estate Landscape

When the US was plunged into a recession in early 2020, there were hopes of a swift and sharp return to normal. Now, more than seven months into the Covid-19 pandemic, indicators are pointing to a more muted and drawn out recovery as the country continues to struggle with the virus.

The US is seeing record highs in the number of daily new confirmed cases. Unemployment and new job losses remain at elevated levels as many businesses continue to operate at limited or reduced capacities due to the pervasive spread of the virus. Congress has yet to reach a deal on another relief package as the effects of the initial stimulus begin to fade.

Within commercial real estate, different asset types and markets have seen varying impacts. Some asset types and markets are holding up well, while others are seeing challenging hardships. We believe opportunities to earn attractive risk-adjusted returns remain in commercial real estate. Given the uncertainty in the economic environment, we remain focused on downside protection. Elements that offer downside protection include defensive asset classes that are more resilient to downturns, growing markets, and fundamentals that generate demand, and in-place cash flows that establish a stabilized base for the ability to absorb downward pressures on demand. Our preferred asset classes include multifamily and senior housing with targeted strategies for each asset type.

Sponsor Selection, asset value creation, and business plan execution remain the cornerstones of our investment strategy. We continue to cultivate relationships with sponsors with extensive experience, strong track records, deep lender and broker relationships, and a proven ability to execute on business plans. These qualities are paramount to navigating the current downturn and evolving challenges of the pandemic.

Read the Full Report


The Alpha Investing Portfolio

To date, Alpha Investing has invested in 40 properties across the United States, as well as a commercial real estate debt fund. The total capitalization of the 40 properties in our portfolio is over $1.5 billion.

RECENT TRANSACTION:
MULTIFAMILY ACQUISITION

Phoenix, Arizona

 

  • 288-Unit, Garden-style apartment community in North Phoenix, AZ, in the heart of the I-17 and Deer Valley employment corridors.
  • Phoenix remains a top market in the western US for job growth, which continues to drive demand for multifamily throughout the Phoenix MSA. Employment growth in Phoenix is being driven by a diverse composition of industries, including healthcare, financial services, technology, and professional service firms.
  • Ideally located within North Phoenix’s distinguished economic region known as the I-17 and Deer Valley Employment Corridor, the property offers residents immediate access to an area that encompasses 38M sq. feet of office, industrial, and flex space, housing ~96,000 professionals in 2,400 businesses.
  • The Sponsor will execute a strategic renovation plan to rebrand the property and update unit interiors to their typical design to capture additional upside.

 

As always, we appreciate your interest in Alpha Investing. Please feel free to reach out to us at any time.