Trion Properties Reaches $1 billion Milestone
On December 30, 2021, Trion Properties, a prominent multifamily investment firm, hit a major milestone. According to a recent LinkedIn Post by Managing Director Farhan Mahmood, the Los Angeles and Florida based firm’s portfolio eclipsed $1 Billion in value at the end of December 2021. The remarkable achievement is even more impressive when you consider Trion’s portfolio sat at a comparatively paltry $13 million just under ten years ago, before a long run of success under the direction of Managing Partners Max Sharkansky and Mitch Paskover and with the assistance of Managing Director Farhan Mahmood and the rest of the Trion team.
The news comes on the heels of several recent major acquisitions by the firm, including the Latitude at West Ashley Apartments in Charleston for $51.8M, a $71.6 million portfolio of properties in Sacramento, as well as Patterson Court, a 384-unit luxury multifamily community in Orlando, Florida, which they acquired for a cool $107.75 million. Trion is currently offering its third multifamily-focused fund, the Multifamily Opportunity Fund III, with properties in Portland, Oregon, Fayetteville, North Carolina, Denver, Colorado, and in several other states.
According to a recent profile of the firm’s new fund on “The Real Deal,” Trion’s Multifamily Opportunity Fund III targets value-add multifamily properties across the West and Southeast. The firm is looking to raise $75 million in equity and $200 million buying power, with a $50,000 minimum contribution for interested investors. Trion seeks out older properties, up to 50 years, with value-add potential, and acquisitions will undergo extensive renovations and will also have added amenities like resident gyms and pool areas. They plan to acquire 8-12 properties in different areas of the West and Southeast, with a hold period of up to 8 years.
The explosive growth seen at Trion reflects the wider marketplace, with 2020 and 2021 seeing a slight dip for multifamily properties as a result of COVID-19 uncertainty, then roaring back with the end of eviction moratoriums in many regions, tight vacancy rates, positive migration patterns, and significant rent growth in markets across the US. Other factors driving growth in the sector in 2021 included:
-Cap-rate compression driving increases in apartment values of between 15-30%, mainly caused by pandemic-driven interest rate declines and higher rental rates, as evidenced by data in Newmark’s 3Q 2021 United States Multifamily Capital Markets Report
-Fundamentals in the sector improved as pandemic impacts drew down. By the end of 2021, rental rate, non-collection, and concession metrics improved. Additionally, rent relief funds approved by Congress helped tenants to catch up on back rent, lending strength to the workforce housing market.
-Multifamily properties saw rental rate growth of 10-20% nationwide, largely spurred by the Fed’s loose monetary policies and subsequent dollar destruction. Inflation is making a big splash in the sector, with property valuations and rents growing by significant amounts in most markets.