especially for those who inherit the assets. Properties are not always the only thing that is distressed. According to David Kim, managing partner of the Bascom Group, “Siblings who inherit multifamily assets are often facing new challenges of owner operating their properties while also experiencing serious internal friction from the stress of dealing with it all.”
And this problem is not going away. In fact, at no other time in history is more wealth beginning to shift in the market. “There is a $30 trillion wealth and estate transfer that is going to happen over the next 30 years,” Kim says. “The next generation will inherit a lot of money, and for many, multifamily investments to deal with.” This handoff from baby boomers to millennials will have a massive impact on the multifamily industry. For a large majority, decisions often revolve around tax ramifications and exchange, rather than the properties themselves.
For The Bascom Group (Bascom), dealing with these types of situations is becoming a regular occurrence. It also has provided a new opportunity for Bascom to bring institutional investment strategy, capital and property management to non-institutional, high net worth, private lifestyle companies.
With inherited properties, the simple solutions may be to either limp along with low-returns or liquidate the asset, but Bascom is now offering a consultative approach to lifestyle owners. By helping with evaluation and strategy, Bascom is positioned to help provide another solution: a value-add reposition on a current property. “We can typically work with any property above 50 units,” Kim says. “From taking over management to bringing capital to the table, we are here to help provide guidance to individuals facing a lifestyle property situation.” The experts at Bascom can provide experience-driven data, market analysis and even become an equity partner.
“This is essentially a tenant/landlord joint venture,” according to Kim. “We operate as the asset manager investing in the landlord.” For lifestyle owners and their families, this means no more tension over management or profits. Bascom manages the property and the annual reporting. This can also mean much greater returns for owners.
When financing is needed, Bascom’s institutional lending power positions lifestyle owners for better terms when financing a property reposition that results in a lower cost of capital. History speaks for itself. Since 1996, Bascom has acquired over 300 multifamily value add reposition projects totaling 81,000 units and over $13 billion in total transactions. They have worked with some of the biggest names in institutional investing, including Carlyle Group, JP Morgan Chase, Pacific Life and Morgan Stanley.
Bascom currently targets single asset or portfolio acquisitions of $10M or more through broker listed sales, off-market offers, and direct lender/owner relationships. They currently own 81 assets across 13 states totaling 19,382 units.
The unprecedented wealth handoff from baby boomers to millennials is coming, and with it will come a large amount of multifamily assets.Bascom is focused on helping owners in this position succeed through consultation and partnership. When facing these types of situations, lifestyle owners do not have to limp along alone, but can turn properties into profitable investments for the future.