A Private Capital Network Built on Relationships

One side of the equation is investor relationships. The other side is sponsor relationships. We build both to maximize value to our private capital network.

Why Alpha Investing?

By providing access to top-tier real estate sponsors, reducing restrictive minimum investments, and providing vetting and underwriting, our strategy brings a new perspective to private equity.

We’ve built a network of investor relationships

Our elite network of investors gains access to institutional-quality, private real estate investments that are not available to the general public.

We do this by breaking down investment minimums. We aggregate capital from our investor network into one LLC, which then invests as a single investor. Using aggregated capital, this LLC easily meets investment minimums, providing our investor network unprecedented access to institutional-quality deals.

We’ve also built a network of sponsor relationships.

We have vetted top-tier real estate sponsors based on their background, track record, asset class expertise, and performance over cycles.

We’re confident that when we underwrite one of our sponsors’ deals, it will be among the best-in-class and offer the potential for strong risk-adjusted returns to our investor network.

Diversify Your Portfolio with Private Real Estate Investments

Investment Criteria

We invest in private real estate, providing our investors an opportunity to diversify their portfolios beyond traditional investments.

Private real estate investments offer the potential for increased risk-adjusted returns and a way to diversify one’s portfolio beyond conventional public equities and fixed income investments.

We primarily focus on the value-add opportunities and target properties in supply-constrained markets with strong, in-place cash flow. We build relationships with top-tier real estate sponsors to bring these opportunities to our investor network. 

Our Preferred Asset Classes

Private real estate investments from a range of asset classes with one thing in common: professionally vetted, top-tier sponsors.

Multifamily

A Consistently High-Performing Asset Class Due to Strong Fundamentals, Despite Shifting Market Dynamics Amid Severe Economic Downturn

During the Great Recession, multifamily rents declined the least and, Post-recession, multifamily rents recovered the fastest. Multifamily has continued to perform well during the pandemic and has been the top performer in rent collections.

 

There has been a high concentration of supply in Class A properties in major metros for several years, though new development Class A rents are not affordable for most Americans. Class B and workforce housing in many markets is dated and in short supply, as they are unprofitable to build due to rising land, labor, and material costs. This presents opportunity to acquire existing Class B multifamily and execute on value-add capital expenditure programs to refresh dated product and improve the renter experience by meeting changing preferences.

This strategy mitigates risk in the event of an economic downturn, as the rent premium for the upgraded product is not necessarily dependent on market rent growth, and presents an opportunity to capture outsized rent increases, even in a slower growth environment. Rent collections for 11.4 million units of professionally managed apartments tracked by NMHC has averaged over 95% since the start of the pandemic. August year-over-year rents across Class B and C multi-family were up 1.5% and 3.0%, respectively, while Class A rents were down 0.7%, according to CBRE.

Weakness is already being exposed in Class A assets in the urban core of gateway markets, where vacancies are rising, rents are declining, as the asset class and markets are being squeezed from both the supply and demand sides. For the past few years, new supply has been concentrated in Class A, as rising land and construction costs have made it less economically feasible to develop affordable workforce housing. These new Class A developments with high asking rents have been concentrated in gateway markets, where there were corresponding high levels of tenant demand and income.

Although not immune, the knowledge and talent-based economies of gateway markets have cushioned the impact of past recessions. The pandemic, however, has upended demand for urban core, Class A in gate-way markets. With a significant number of companies in the major markets allowing employees to work from home, proximity to the office becomes less relevant. Urban living also typically comes with less space and higher density, which are less conducive to social distancing and accommodating work from home. Furthermore, the limited availability of dining, arts, and entertainment due to the pandemic have reduced the benefits associated with the high costs of urban living.

Fundamentals for B and C multifamily were strong going into the recession due to the limited supply of affordable housing, and so far, demand is holding up. However, the high sustained levels of unemployment and the expiration of government economic support pose risks to this segment, particularly Class C, which often servers lower income residents who were already financially stressed before the current recession.

Senior Housing

Positive Fundamentals, Propelled by an Ever-Growing Demographic and the Chance to Optimize Operational Efficiencies

Senior housing has been impacted more in the current pandemic‑induced downturn than compared to other recessionary periods. This is due to the nature of the virus and the measures required to prevent its spread

 

Covid-19 poses the greatest risks to seniors. Senior housing also experienced the human and economic tolls of Covid-19 early on, with fatal outbreaks at several communities. Many facilities enacted safety procedures that included limiting admissions and visitations to insulate the communities and protect residents. At the same time, some residents chose to move out, citing virus concerns, while other prospective residents delayed decisions to move in. These combined factors have put downward pressure on demand. Occupancy declined across all three segments of senior housing— independent living, assisted living, and memory care—and reached a record low in 2020, according to the National Investment Center for Senior Housing.

While senior housing faces near-term headwinds from declining occupancy rates and rising operating expenses, the long-term fundamentals remain attractive. The number of Americans over the age of 65 is projected to nearly double from 52 million in 2018 to 95 million in 2060, causing the 65-and-older age group’s share of the total population to rise from 16% to 23%, according to the US Census Bureau, Population Projections. It’s clear that aging demo-graphics will continue to create demand for senior housing.

Senior housing ownership is also highly fragmented. The top ten senior housing providers control 33,708 units each, on average. The average of the top 50 providers drops drastically to 12,124 units. Many owners are smaller regional or local “Mom and Pop” owner/operators. Senior housing is also an operationally intensive asset with thin operating margins. The fragmented nature of the industry provides opportunities for consolidation and for experienced, institutional operators to improve operations and efficiencies.

Sponsor Vetting

Many investment firms boast that they review and reject thousands of projects. We see that as a total waste of time.

Each Alpha Investing deal starts with a sponsor relationship. By building relationships with best-in-class sponsors, we ensure that the deals we see are high quality deals. We then determine if that investment is right for our investor network. 

We want to know that a sponsor has a positive track record of managing both its company and its projects. When we vet a sponsor, we thoroughly review:

Past projects

What geographies and asset classes have they historically invested in?

What are their historical realized returns to investors?

Performance over cycles

How does the sponsor’s track record reflect their activity over 10 or 20 years?

How do they perform in down cycles and recessions?

 

Management

What do the sponsor’s references and colleagues  have to say?

How experienced is the management team?

  • Professional pedigree
  • Education

Deal Underwriting

Once a sponsor is part of our network, we begin looking diligently at its prospective deals.

Above all we want to be sure a deal aligns with the interests of our investor network. We then perform a detailed analysis and professional due diligence.

Before we present a deal to our investor network, it has gone through detailed evaluation process:

Consider alignment with investor interest

Is this deal right for our investor network?

Review by leading industry experts

A slate of industry veterans with expertise in related asset classes.

Review by investment committee

Our investment committee performs thorough due-diligence on each prospective project.

Define capital commitment

We present the deal to our investor network and begin aggregating capital.