Generated by All in One SEO Pro v5.0.1.1, this is an llms-full.txt file, used by LLMs to index the site. # Passco Companies Passco is a trusted 1031 DST exchange expert with $8B in acquisitions and 26+ years of experience. Explore premier real estate investment opportunities. ## Posts ### [2027 NMHC Annual Meeting](https://www.passco.com/2027-nmhc-annual-meeting/) **Published:** August 1, 2026 **Author:** Dayna Abdel **Content:** Passco Companies will be attending the 2027 NMHC Apartment Strategies Conference and NMHC Annual Meeting. As a Beverage Break Sponsor, Passco is bringing a little fall style to the conference with jacket koozies designed to keep your drink cozy for the season! The NMHC Apartment Strategies Conference brings together multifamily executives, investors, economists, researchers and analysts to examine the economic, capital market and operating trends expected to shape apartment markets in the year ahead. Following the conference, the NMHC Annual Meeting will convene senior leaders from across the apartment industry for networking, relationship building and discussions focused on the future of multifamily housing. We look forward to connecting with industry colleagues and partners throughout both events. If you’ll be attending, we hope to see you there. *To register, please visit [NMHC.org](https://www.nmhc.org/meetings/calendar/annual-meeting/2027-nmhc-annual-meeting/)* **Categories:** Upcoming Events --- ### [IMN Southern California Middle-Market Multifamily Forum](https://www.passco.com/imn-southern-california-middle-market-multifamily-forum/) **Published:** August 2, 2026 **Author:** Dayna Abdel **Content:** Passco will attend IMN’s Southern California Middle-Market Multifamily Forum, September 15–16 at the Rancho Bernardo Inn in San Diego. The conference brings together multifamily owners, operators, developers, investors, lenders and other industry leaders to discuss the Southern California market, capital trends, investment opportunities, regulatory challenges and evolving strategies across the multifamily sector. *To register, please visit [informaconnect.com](https://informaconnect.com/imn-multifamily-california/)* **Categories:** Upcoming Events --- ### [ADISA’s 2026 Annual Conference & Trade Show](https://www.passco.com/adisas-2026-annual-conference-trade-show/) **Published:** August 2, 2026 **Author:** Dayna Abdel **Content:** The conference runs October 5–7, 2026 at The Cosmopolitan of Las Vegas and focuses on education, industry trends and networking across the alternative investment space. Passco Companies will be attending the 2026 ADISA Annual Conference & Trade Show, taking place October 5–7 at The Cosmopolitan of Las Vegas. The annual event brings together professionals from across the alternative investment industry for educational sessions, market insights and networking focused on the latest trends and developments shaping the space. We look forward to connecting with industry colleagues and partners throughout the conference. If you’ll be attending, we hope to see you there. *To register, please visit [ADISA.org](https://adisa.org/events/2026-annual-conference-trade-show)* **Categories:** Upcoming Events --- ### [FactRight Annual Due Diligence Conference 2026](https://www.passco.com/factright-annual-due-diligence-conference-2026/) **Published:** August 3, 2026 **Author:** Dayna Abdel **Content:** Passco Companies will be attending the FactRight Annual Due Diligence Conference 2026, taking place August 26–28 at the JW Marriott Nashville in Nashville, Tennessee. The annual conference brings together more than 200 wealth managers alongside product sponsors and other industry participants to exchange perspectives, connect with members of the due diligence community and explore developments across the alternative investment industry. We look forward to connecting with industry colleagues and partners throughout the conference. If you’ll be attending, we hope to see you there. *To register, please visit [info.factright.com](https://info.factright.com/factright-annual-due-diligence-conference-2026-industry-participants)* **Categories:** Upcoming Events --- ### [From Brand to Ambassador: Stacy Stemen's Passco Journey](https://www.passco.com/from-brand-to-ambassador-stacy-stemens-passco-journey/) **Published:** July 17, 2026 **Author:** Sarah Pratt **Content:** **Stacy Stemen Senior Vice President of Strategic Relations** Stacy Stemen is a real estate industry marketing specialist. Throughout her 20-year marketing career, she has successfully driven brand growth and business development for several national companies. As Senior Vice President, Strategic Relations for Passco Companies. In this role, she spearheads the development of the Passco brand and manages the strategic growth of the company’s visibility across the nation. She has helped the Company grow to over $4 Billion assets under management and over $8 Billion in acquisitions. Prior to joining Passco Companies, Ms. Stemen worked for nearly two decades in the marketing industry. **Discover how Stacy Stemen is strengthening relationships, elevating the resident experience, and bringing the Passco brand to life through authentic connections.** **Categories:** Conversations with the Experts --- ### [Conversations with the Experts: Alan Clifton on Leadership, Innovation, and Operational Excellence](https://www.passco.com/conversations-with-the-experts-alan-clifton-on-leadership-innovation-and-operational-excellence/) **Published:** June 10, 2026 **Author:** Sarah Pratt **Content:** **Alan Clifton, Chief Operating Officer** Alan Clifton is a real estate acquisitions, finance and management expert with more than three decades of experience. As Chief Operating Officer for Passco Companies, Mr. Clifton’s responsibilities include implementation and focus on operational excellence and efficiency, resource management and cross-functional collaboration both internally and externally driving and maximizing organizational success. He works with each individual group leader within Passco, moving necessary enhancements and changes forward in real time. This ensures that equal alignment internally is maintained and supports each leader’s execution with their team members of their group’s business plan. Mr. Clifton works along side Passco’s President in an aligned approach and management style to deliver both Company and individual employee achievement and job satisfaction. **In this episode of *Conversations with the Experts*, Alan Clifton shares how 25 years of leadership, innovation, and teamwork help drive Passco’s success and shape its future.** **Categories:** Conversations with the Experts --- ### [Protecting Value Through Development: A Conversation with Carey Levy](https://www.passco.com/protecting-value-through-development-a-conversation-with-carey-levy/) **Published:** April 20, 2026 **Author:** Sarah Pratt **Content:** **Carey Levy President, Passco Companies Development** Mr. Levy serves as the President of Passco Companies Development and is an integral member of the executive team. Mr. Levy has been instrumental in addressing policies that promote the company’s culture and vision, as well as championing comprehensive goals and strategic planning for performance and growth. He is a seasoned professional with substantial experience of over 30 years in all sectors of real estate investment, acquisitions & dispositions, development, construction, business management, operations and marketing. Mr. Levy pursued his educational interests with an emphasis in development and marketing with a degree in Construction Management. In addition, he held a general contractor’s license and realtor’s license, with additional experience in real estate law, finance and business management. Mr. Levy has been affiliated with numerous industry associations such as BIA, ASHA, NIC, ICSC, CIDA, NMUA and NAREIM. **In this episode, Carey shares with us his over 40 years in real estate development. He shares how a lifelong passion for building shaped his career and how he now helps maintain and enhance Passco’s portfolio.** **From sourcing opportunities to solving complex property challenges, his focus remains the same: protecting and growing value for investors.** **Categories:** Conversations with the Experts --- ### [Inside Escrow at Passco: Lynne Beverly on Detail, Discipline, and Investor Care](https://www.passco.com/inside-escrow-at-passco-lynne-beverly-on-detail-discipline-and-investor-care/) **Published:** April 6, 2026 **Author:** Sarah Pratt **Content:** **Lynne Beverly Senior Director Escrow** Lynne Beverly has worked with Passco Companies since 2004 and has been in the Real Estate Industry for 33 years. As Sr. Director of Escrow, Lynne works closing with our Investors, Qualified Intermediaries and Registered Representatives providing a seamless, efficient close and strong emphasis on compliance for our clients. She holds a Bachelor of Arts in Business from Vanguard University of Southern California. **In this episode we hear from Lynne. With over two decades at the firm, she shares her passion for the escrow process, her commitment to precision and compliance, and how her team delivers smooth, seamless closings. Discover how attention to detail and a white-glove approach help ensure every investor feels confident and cared for at every step.** **Categories:** Conversations with the Experts --- ### [Expanding our "Deal Flow" -- Looking for Additional Opportunities in New Marketplaces](https://www.passco.com/expanding-our-deal-flow-looking-for-additional-opportunities-in-new-marketplaces/) **Published:** March 2, 2026 **Author:** Sarah Pratt **Content:** **Colin Gillis, Chief Investment Officer** Colin Gillis has twenty years of experience in the multifamily industry. As Chief Investment Officer for Passco Companies, Mr. Gillis is responsible for directing the firm’s nationwide multifamily acquisition efforts. During his ten years with Passco, Mr. Gillis has acquired nearly 17,000 units across 55 transactions in eleven states for a total consideration in excess of $3.7 billion. Prior to joining Passco, Mr. Gillis served as Senior Acquisitions Associate for the Atlanta office of Los Angeles-based JRK Investors, as well as Senior Acquisitions Associate for Atlanta-based The Lane Company. In both of these roles Mr. Gillis was responsible for sourcing acquisitions for investments in the Southeast U.S. **This episode dives into the momentum we’re seeing in today’s investment market — from a major increase in underwriting activity and offer volume to nearly doubling our acquisition pace year over year. We’ll talk about why we’re expanding beyond our traditional Southeast focus, how we’re identifying overlooked markets like New Hampshire and Pittsburgh, and what’s driving our confidence in these new regions. Listeners should tune in to understand how disciplined underwriting, deep submarket research, and a flexible geographic strategy are creating new opportunities — and what that means for investors looking for smart growth in a shifting real estate landscape.** **WAYS WE ARE FINDING OPPORTUNITIES** - Expansive territory considerations, not limited to certain markets or geographic regions - Constant tracking of pipeline during marketing and post-marketing periods – “hanging around the hoop” - Nationwide networking / communicating efforts by Atlanta-based acquisitions team - Existing, long-term relationships with brokers and owners that can create unexpected opportunities - Targeting assets with existing, long-term, below-market Agency debt - Targeting assets with advantageous real estate tax situations, pushing for a strategic timing of purchases, and pursuing markets where entity purchases can have a meaningful impact to NOI **Categories:** Conversations with the Experts --- ### [Multifamily Investment Strategy in a Post-Supply Surge Market](https://www.passco.com/multifamily-investment-strategy-in-a-post-supply-surge-market/) **Published:** February 17, 2026 **Author:** Sarah Pratt **Content:** **Colin Gillis, Chief Investment Officer** Colin Gillis has twenty years of experience in the multifamily industry. As Chief Investment Officer for Passco Companies, Mr. Gillis is responsible for directing the firm’s nationwide multifamily acquisition efforts. During his ten years with Passco, Mr. Gillis has acquired nearly 17,000 units across 55 transactions in eleven states for a total consideration in excess of $3.7 billion. Prior to joining Passco, Mr. Gillis served as Senior Acquisitions Associate for the Atlanta office of Los Angeles-based JRK Investors, as well as Senior Acquisitions Associate for Atlanta-based The Lane Company. In both of these roles Mr. Gillis was responsible for sourcing acquisitions for investments in the Southeast U.S. **We discuss where we’re investing today, the realities of the current multifamily market, and what we expect as supply pressures ease and fundamentals rebalance.** ### Multifamily Portfolio **53** Properties; **14,600** Apartment Units; Operating in **17 States** ![](https://www.passco.com/wp-content/uploads/2026/01/MapForWebsite-scaled.jpg) ### Passco’s Target Acquisitions - - - Size: $40MM – $125MM - Target Markets: Willing to consider most markets nationally if there is a story, with few exceptions - Holding period: 6 – 10 years - Leverage / Debt: 55 – 65% Loaded LTV - Y1 Cap rates: 5.35 – 6.50% - Yields: 4.25% – 4.50% **Categories:** Conversations with the Experts --- ### [Leadership Spotlight: Meet Passco’s Chief Legal Officer, Tom Voekler](https://www.passco.com/leadership-spotlight-meet-passcos-chief-legal-officer-tom-voekler/) **Published:** March 11, 2026 **Author:** Sarah Pratt **Content:** **Tom Voekler Chief Legal Officer, Passco Companies** Mr. Voekler has been practicing law for more than 20 years. As Chief Legal Officer, Mr. Voekler oversees all legal, risk, compliance and regulatory functions and supporting Passco Companies’ growth initiative, governance framework and executive leadership team. Prior to joining Passco Companies, he was a partner at the firms of Williams Mullen, Kaplan, Voekler, Cunningham and Frank, PLC and Hirschler Fleicher, PC and worked at Hunton Andrews Kurth LLP. Mr. Voekler earned a JD from the College of William & Mary and a BS in Finance from George Mason University. He is an active member of ADISA, of which he served as a board member and president and he serves as general counsel. **Next up on *Conversations with the Experts*: Tom Voekler, Passco’s Chief Legal Officer.** **From Boston roots and years in the real estate legal world to joining Passco’s leadership team, Tom shares his story—and how he plans to help keep Passco among the best in the industry.** **Categories:** Conversations with the Experts --- ### [Putting Investors First: Communication You Can Trust](https://www.passco.com/putting-investors-first-communication-you-can-trust/) **Published:** March 20, 2026 **Author:** Sarah Pratt **Content:** **Nicole Fullerton Senior Vice President, Investor Services** Nicole Fullerton has worked at Passco Companies since 2002, gaining more than 20 years of experience in real estate client relations. As Senior Vice President, Investor Services, Ms. Fullerton oversees all communications with Passco Companies’ investors and such investors’ registered representatives. Ms. Fullerton leads the investor services team, which is tasked with managing investor accounts, distributions, and reporting. Ms. Fullerton holds a Bachelor of Science in Business Administration with an emphasis on Marketing from California State University, Long Beach. **In this episode of *Conversations with the Experts*, we highlight the care and commitment that go into Passco’s investor communications.** **From proactive planning to clear and transparent updates, this conversation explores what it truly means to put investors first. Hear how accountability, precision, and a passion for service help ensure every investor feels informed, confident, and supported throughout their entire investment lifecycle.** **Categories:** Conversations with the Experts --- ### [Passco Companies Appoints Stacy Stemen as Senior Vice President of Strategic Relations](https://www.passco.com/passco-companies-appoints-stacy-stemen-as-senior-vice-president-of-strategic-relations/) **Published:** November 20, 2025 **Author:** Sarah Pratt **Content:** **Irvine, Calif. — November 4, 2025** — Passco Companies, a leading national real estate investment firm, is proud to announce the appointment of **Stacy Stemen** as **Senior Vice President of Strategic Relations**. In this newly defined role, Stemen will lead the company’s strategic growth initiatives through the cultivation and expansion of business development efforts, and oversight of the Passco Ambassador Program. “Stacy has been a driving force behind Passco’s brand presence, client relationships, and national recognition,” said **Larry Sullivan, President of Passco Companies**. “Her ability to build authentic connections and create meaningful collaborations has been instrumental to our continued success. This new role allows her to further elevate Passco’s market leadership through innovation, strategy, and relationships.” As **Senior Vice President of Strategic Relations**, Stemen will focus on expanding Passco’s investment reach and influence within the broader commercial real estate and alternative investment communities. Her responsibilities include identifying and executing strategic relationships, leading a national business development strategy, and strengthening the firm’s brand visibility through targeted initiatives and thought leadership. She will also work closely with the existing marketing team to attract equity through the broker-dealer, RIA, family office, and investment communities—continuing to cultivate and grow relationships across the industry. Stemen will additionally oversee the **Passco Ambassador Program**, an initiative designed to deepen engagement with onsite staff, enhance property-level marketing effectiveness, and foster brand loyalty throughout Passco’s growing portfolio. Her marketing expertise and relationship-driven approach will continue to play a central role in ensuring consistent messaging, community engagement, and strong advisor and investor relations. A recognized leader in marketing and business development, Stemen has served as **Senior Vice President of Corporate Marketing and Business Development** at Passco since 2013. During her tenure, she led initiatives that significantly expanded the company’s national footprint, strengthened investor relations, and positioned Passco as a respected voice within the alternative investment and real estate sectors. In her new capacity, Stemen will represent Passco at key industry events and various alternative investment conferences. Stemen also sits on Advisory Board for the UCI Paul Merage School of Business and The American Cancer Society. “I’m deeply honored to take on this new role and continue advancing Passco’s mission of delivering value through relationships, integrity, and innovation,” said **Stemen**. “Our growth has always been built on strong partnerships and a shared commitment to excellence — and I look forward to expanding those opportunities in meaningful, authentic ways. [READ PRESS RELEASE HERE](https://bit.ly/3XFlQMp) **Categories:** Passco News --- ### [Passco Makes Top Multifamily Owners List](https://www.passco.com/passco-makes-top-multifamily-owners-list/) **Published:** November 18, 2024 **Author:** Sarah Pratt **Content:** Exciting News! Passco made the [Multi-Housing News](https://www.linkedin.com/company/multi-housing-news/) Top Multifamily Owners list! This achievement highlights our commitment to creating quality communities for our residents. A heartfelt thanks to everyone that helped us achieve this milestone. We’re excited to continue growing and innovating in the multifamily space! [Read the full list HERE](https://www.multihousingnews.com/top-multifamily-owners/) **Categories:** Passco News --- ### [CPE 2024 Top Commercial Real Estate Owners](https://www.passco.com/2024-cpe-2024-top-commercial-real-estate-owners/) **Published:** November 25, 2024 **Author:** Sarah Pratt **Content:** Another top placement for Passco! A huge congratulations for earning a spot among the 2024 Top Commercial Real Estate Owners at [Commercial Property Executive](https://www.linkedin.com/company/commercial-property-executive/ "https://www.linkedin.com/company/commercial-property-executive/")! We are proud to celebrate this recognition. Thank you to all who have helped us achieve this milestone! [Read the full list HERE](https://www.commercialsearch.com/news/top-commercial-real-estate-owners/?utm_source=WhatCountsEmail&utm_medium=Monthly%20Magazine&utm_campaign=CPE%20November%202024%20Digest) **Categories:** Passco News --- ### [Passco Plants Trees in Honor of Employees](https://www.passco.com/passco-plants-trees-in-honor-of-employees/) **Published:** May 2, 2025 **Author:** Sarah Pratt **Content:** At Passco, we believe in creating a positive impact—not just in our communities, but for the planet we all share. In celebration of Earth Day, we’ve planted a tree in honor of each and every one of our employees. It’s a small gesture with a big purpose: restoring ecosystems, supporting biodiversity, and investing in a greener future for generations to come. Together, we’re helping the world grow a little greener. ![](https://www.passco.com/wp-content/uploads/2025/05/Celebration-Passco-Employees-3408336FullSize.jpg "Celebration-Passco Employees-3408336FullSize - Passco Companies") **Categories:** Passco News --- ### [A Legislative Update on Section 1031 Like-Kind Exchanges](https://www.passco.com/a-legislative-update-on-section-1031-like-kind-exchanges/) **Published:** May 17, 2017 **Author:** Synoptek Web Dev **Content:** Larry Sullivan, ADISA board member and president of Passco Companies, discusses Section 1031 Like-Kind Exchanges and what to watch for on the tax reform front. https://player.vimeo.com/video/217660760?color=e3e3e3&byline=0&portrait=0 *This video was originally published on [ADISA.org](http://www.adisa.org/education/adisa-raa-educational-video-series/leg-update-1031s).* ***Disclaimer:** The Alternative and Direct Investment Securities Association, Inc. (ADISA) has made this video available to you as a current member of ADISA. The video is provided to ADISA members solely for informational purposes. The video presentations are the copyrighted content of ADISA and Real Assets magazine. You may access, review, and use this information, but may not republish it in any manner without the express written permission of ADISA. Neither ADISA, nor any of its directors, officers, employees or agents, makes any representations or warranties, express or implied, or assumes any legal responsibility for the information provided in the presentations. The contents of the presentations are not the views or opinions of ADISA and its staff. By using the video, you agree that you will not rely on the video and any reliance on the video is done so strictly at your own risk. ADISA is not liable for any damages of any nature incurred as a result of or in connection with the use of the information contained in the video. The information in the video should also not be viewed as industry guidelines or standards. The video does not constitute legal or other professional advice. It is recommended that you seek legal or other professional advice to determine whether any advice, actions or practices contained in the video are appropriate and legal in your jurisdiction.* **Categories:** Passco News --- ### [1031 Exchanges Pertain To More Than Real Estate](https://www.passco.com/1031-exchanges-pertain-to-more-than-real-estate/) **Published:** June 12, 2017 **Author:** Synoptek Web Dev **Content:** Used by industries as diverse as rental cars and farming, 1031 exchangesaffect a broader swath of the business world than many commercial real estateexecutives realize, making them an even more significant part of the tax-reform issue, Passco Cos.’ president Larry Sullivan tells GlobeSt.com. With tax reform being a hot-button issue right now—and one of concern to the CRE industry—we spoke with Sullivan, an expert on the subject, about what we should know about tax reform and 1031 exchanges. “First of all, I can only talk to you about tax reform as of this moment because it can change, and the whole situation is very fluid,” Sullivan tells us. “As I have told several conference audiences, expect the tax-reform journey to be a road trip filled with many rights, lefts, roundabouts and unexpected detours. At this time, tax reform is at the stage of President Trump issuing what effectively amounts to a one-page summary and the House having a blueprint for tax reform from a year or so ago. There hasn’t been a public coalescing between Congress and the White House yet, so it’s tough to gauge where we are in the process.” The House has only just commenced tax-reform committee hearings, and the Senate is consumed with the Obamacare repeal and replace, so tax reform hasn’t yet even taken shape over there, says Sullivan. “What we do know is that, so far, no one has mentioned anything about 1031 exchanges, on record, in any regard, so you have to remain thoughtful about the direction it might take going forward.” We also know that 1031 exchanges have been around for 100 or so years, and many industries beyond real estate use it: aviation and automotive, just to name a couple, says Sullivan. “Its use impacts a wide part of the economy. I say that because the overarching goal of the White House in tax reform is making sure that GDP is over 3% and making sure that there are lots and lots of jobs created (or preserved) in the US—not in foreign countries. Promulgating job growth in America and raising the GDP to over 3% are the primary drivers of this Administration. Tax reform is a means to that end.” 1031 exchanges and the industries surrounding its use certainly impact job creation—probably wider than most people on the Hill realize. “The utilization of 1031s also contributes positive basis points to GDP,” says Sullivan. “So, the chances of a group attempting to eliminate something that would reduce jobs and lower GDP is not very high, from an intellectual standpoint. But sometimes intellectual standpoints don’t win in DC, and that is why the industry needs to remain very attentive.” What we need to watch first is the repeal and replacement of Obamacare, Sullivan continues. “Why? Congress needs the repeal tax and cost saving (perhaps as much as $500 billion) to help tax reform remain revenue neutral and not create the opportunity to look for ‘pay for’ offsets (which could include 1031 exchanges). Second: the fate of the House-proposed border-adjustment tax. That tax, or something similar to it, could deliver another $1.2 trillion in budget buffer to the overall tax reform initiative and also insulate the need for ‘pay for’ offsets.” Third, says Sullivan, Congress has proposed eliminating depreciation and replacing it with a new concept: immediate expensing. For example, you could buy an apartment project and immediately expense it (not including the land allocation) and carry forward any net losses. Some in Congress view this as a new alternative to 1031 exchanges. But no one knows the rules surrounding its implementation, and land is specifically excluded, so farm states are likely to not get on board. “You need to really watch that concept,” says Sullivan. At this point, Sullivan says it’s too early in the game to know the fate of 1031 exchanges. When asked how investors’ views on 1031 exchanges might change if the tax benefits were removed, he says, “I don’t go with assumptions or conjectures. I don’t worry about what could happen nine or 12 months from now—or never. I focus on where we are today, and the next job is to make sure we’re informing congressmen and senators about what role 1031 plays in the overall job market and in the country’s overall economy. Keep building on that because it’s much brawnier than just the real estate side of things. Keep educating people.” Finally, we asked Sullivan if, or when, tax reform is likely to happen. “I believe it will happen and will happen sometime between after October 1st of this year and the end of the first quarter of 2018.” *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/carrierossenfeld/2017/06/12/1031-exchanges-pertain-to-more-than-real-estate/).* **Categories:** Passco News --- ### [Test Post about DST](https://www.passco.com/test-post-about-dst/) **Published:** October 15, 2025 **Author:** Sarah Pratt **Content:** dfsdfdsfsdfsdfsdf **Categories:** Thought Leadership --- ### [Passco Acquires New, Best-In-Class Multifamily Community in Gainesville, Georgia for $65 Million](https://www.passco.com/passco-acquires-new-best-in-class-multifamily-community-in-gainesville-georgia-for-65-million/) **Published:** January 21, 2021 **Author:** Synoptek Web Dev **Content:** Passco Companies, a privately held California-based commercial real estate company that specializes in acquisition, development, and property and asset management throughout the U.S., has acquired The Mill at New Holland, a new, best-in-class multifamily property located in Gainesville, Georgia, 40 miles northeast of Atlanta. The 284-unit, highly amenitized community, which was completed in 2020, was purchased from the developer, Mesa Capital Partners, for $65 million. According to Colin Gillis, Vice President of Acquisitions at Passco, the firm identified the opportunity to preempt the marketing process through close relationships with the brokers and seller in order to secure this extremely high-performing asset. “The momentum of The Mill at New Holland is incredibly strong and unmatched by almost anything we’ve seen previously,” explains Gillis, noting that the property reached stabilized occupancy in 9 months and was 75 percent leased before amenities were available. “The community’s rapid lease up, which occurred entirely during the pandemic, demonstrates the significant pent-up demand in the submarket, as several months saw leasing activity nearly exceed 50 per month. While Gainesville is a bedroom community of Atlanta, it enjoys its own identity and distinct economic drivers. The MSA consists of about 200,000 residents and the market is vastly underserved when it comes to the availability of luxury units.” According to Gillis, Gainesville has experienced steady population increases over the past decade and is well positioned for future growth, with Moody’s giving the city a projected ‘first quintile’ ranking out of the 410 markets tracked for percentage job growth through 2024 – up significantly from the 2019 through 2021 rankings. Further, the Milken Institute consistently places Gainesville on its Top-10 Best-Performing Small U.S. Cities list. The city is also known as the medical and education hub of Northeast Georgia. Northeast Georgia Medical Center, a sprawling and expanding medical campus that employs more than 8,000 people, is located in close proximity to The Mill at New Holland, and there are three universities in the city with a total of over 17,000 students. The industrial sector in the region is also rapidly growing, Gillis notes. “Gainesville checks all the major boxes we evaluate when identifying opportunities in high-growth suburban areas, and we’re excited to enter the submarket while expanding our Southeast portfolio with The Mill at New Holland,” explains Gillis. “The property immediately attracted residents with an average household income of nearly $100,000 and has experienced no delinquency issues despite the challenges of the pandemic. In addition to the strength of the submarket as a whole, the asset’s success is also a testament to its exceptional quality and strategic location within walking distance of desirable neighborhood amenities, including over 138,000 square feet of retail anchored by one of the largest Kroger Marketplace stores in the region.” Downtown Gainesville is just two miles from The Mill at New Holland and is home to several boutique stores, a wide variety of restaurants, and an entertaining and vibrant downtown nightlife. “With only one nearby multifamily delivery in the near-term pipeline, located 10 miles south of The Mill at New Holland, this asset provides us with immediate and ongoing growth potential,” adds Gillis. “Mesa Capital Partners delivered a fantastic asset in an unmatched suburban location and we are extremely thankful for their team for delivering us a 100 percent leased property at closing.” The Mill at New Holland’s competitive amenities include a 24-hour fitness and yoga/cross-training studio with fitness on-demand kiosks featuring Peloton bikes; a resort style pool with a sun shelf; an outdoor grilling station and TV area; an outdoor firepit; a cyber café; a community study and conference room; a club room with billiards and entertainment kitchen; a concierge package room; a dog park; a luxury pet spa; and a rideshare waiting area. The property’s studio, one-, two-, and three-bedroom units feature granite countertops, stainless steel appliances, designer ceramic tile backsplash, 42-inch cabinets, wood plank flooring, 9-foot ceilings, and washer/dryers. The Mill at New Holland is Passco’s fifth multifamily property acquisition within five months, bringing the firm’s total units added since September to 1,831. Paul Berry and Shea Campbell of CBRE Southeast Multifamily represented the seller in this transaction. The community is located at 1000 New Holland Way NE in Gainesville, Georgia. Caleb Marten of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing on behalf of Passco Companies. *Originally published on [Yield PRO](https://yieldpro.com/2021/01/passco-acquires-new-best-in-class-multifamily-community-in-gainesville-georgia-for-65-million/)* **Categories:** Passco News --- ### [Passco Companies Strengthens Foothold in Louisiana with Acquisition of Two Luxury Multifamily Communities Totaling 600-Units](https://www.passco.com/passco-companies-strengthens-foothold-in-louisiana-with-acquisition-of-two-luxury-multifamily-communities-totaling-600-units/) **Published:** May 25, 2022 **Author:** Sarah Pratt **Content:** Passco Companies, a privately held California-based commercial real estate company that specializes in real estate acquisition, development, and asset management throughout the U.S., has acquired two luxury multifamily communities totaling 602 units: Canal 1535, a 330-unit asset in Downtown New Orleans, and Sawgrass Point, a 272-unit asset in the Baton Rouge metropolitan area submarket of Gonzales, Louisiana. Both assets closed at contract pricing despite a volatile capital markets environment. These acquisitions bring Passco’s current holdings in the state to 1,690 units and exemplifies the firm’s strategy of identifying highly amenitized, best-in-market multifamily properties poised to benefit from strong fundamentals and growing renter demand, according to Colin Gillis, Senior Vice President of Acquisitions at Passco. “Based on our long-standing relationships and deep experience in multifamily throughout market cycles, our team has continued to successfully identify and secure top assets in growing business and cultural hubs throughout the country,” explains Gillis. Caleb Marten of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing on behalf of Passco Companies for both transactions. Passco’s two recent acquisitions include: **Canal 1535** Passco Companies has acquired Canal 1535, a 330-unit luxury Class A multifamily high-rise community situated within the heart of historic Downtown New Orleans, marking the firm’s first asset in the city. “This community is a one-of-a-kind property in an irreplaceable location, situated within a market that rarely sees apartment trade activity,” says Gillis. “We were able to take advantage of a truly once-in-a-generation opportunity to acquire a property of this caliber for a basis far below today’s replacement cost.” Gillis adds that New Orleans has an oft-overlooked, high-end demographic that is paying rents for top-end assets that are on par with the country’s gateway markets. “Canal 1535 is one of the most special and unique assets in the Passco portfolio that offers elevated, convenient living with easy access to the vibrancy of New Orleans,” continues Gillis. “Residents at the community benefit from the region’s diverse, thriving economy and exceptional walkability, by being embedded within one of the best dining, entertainment, and cultural destinations in the country.” Gillis also adds that the Passco team identified an opportunity to obtain a Green Globes certification, which help secure competitive financing terms. Both Passco and the seller were represented by Mike Kemether of Cushman & Wakefield and Larry Schedler, Cheryl Short, and Christian Schedler of Larry G. Schedler & Associates, Inc. Kemether says: “The Passco team recognized the tremendous value of this property’s best-in-class amenities package and central location, in close proximity to the plentiful employment of the New Orleans CBD and BioDistrict Medical Center. Provident, the community developer, foresaw the area’s strong potential when carrying out the vision for this community, which led to a successful transition from developer to owner.” Schedler adds: “Canal 1535 is a premier mid-rise multifamily community in the state of Louisiana. The property is strategically positioned in the center of downtown New Orleans and within walking distance to the French Quarter – a truly irreplaceable asset on Historic Canal Street.” The property, which will be managed by Greystar, provides residents with garage parking, a well-appointed clubhouse with resident lounge, a resort-style heated swimming pool, a state-of-the-art fitness center, resident business center with PC and Mac computers, a private conference room, a community kitchen and courtyard entertainment area, a 5th-floor deck overlooking Canal Street, a covered putting green, a covered outdoor dog park and dog grooming station, bike storage, package lockers, rentable storage rooms, valet dry cleaning delivery services, a furnished guest suite, and trash chutes on each floor. Unit amenities include panoramic city views, quartz countertops, espresso kitchen cabinetry, GE stainless steel appliances, built-in microwave ovens, tiled backsplash, undermount sinks, high arc faucets, full-size washer and dryer appliances, smart home locks with keyless entry, Nest thermostats, USB ports throughout, private balconies, garden tubs, walk-in showers with frameless glass doors, and walk-in closets. Canal 1535 is located at 1535 Canal Street in New Orleans, Louisiana. **Sawgrass Point** Passco Companies has also purchased Sawgrass Point, a 272-unit luxury, Class AA multifamily community in the Baton Rouge submarket of Gonzales, Louisiana. This acquisition brings the firm’s portfolio in the Baton Rouge metropolitan area to three multifamily properties exceeding 800 units, notes Gillis. “We’ve identified greater Baton Rouge as a market with solid fundamentals that is poised for significant long-term growth,” says Gillis. “This asset is situated within one of the best submarkets, Ascension Parish, which has the highest per capita income in Louisiana and ranks #1 in the state for population growth. Further, we will continue to benefit from amassing economies of scale in the market, with all three of our Baton Rouge assets managed by Arlington Properties.” “This is an exceptionally crafted community that is well aligned with our strategy to acquire multifamily properties in secondary and tertiary markets that capture the lifestyle-oriented, renter-by-choice demographics,” says Gillis. “The developer had the foresight to incorporate several next-generation amenities, as well as build the asset to the highest National Green Building Standard.” Passco and the seller were represented by Chad Rigby and Saban Sellers of Stirling Investment Advisors (SIA) and Telly Fathaly of Walker & Dunlop. Rigby notes: “Multifamily assets remain an attractive investment, especially in high-growth submarkets like Gonzales and the surrounding Baton Rouge area. We enjoyed working with Passco and our partners at Walker & Dunlop through this process and are excited to see this deal come to fruition. SIA and Walker & Dunlop are proud to have played a role in such an excellent acquisition and disposition opportunity for our clients.” Sawgrass Point, which has maintained an occupancy of 97% and higher since lease-up, provides residents with immediate access to Interstate 10 and is located within a 20-minute drive of the major employment centers of East Baton Rouge, and an approximately 45-minute drive from New Orleans. The gated community offers a car wash station, 24/7 package lockers, a resort-style pool, a large fitness center and yoga room, group fitness classes with fitness on demand, an outdoor kitchen pavilion, a spacious dog park, a dog washing salon, a playground, 24-hour emergency maintenance, pool table, elevator service, air-conditioned interior corridors, a gift-wrapping room, ice machines, an on-site coffee bar, and a business center. Best-in-market unit amenities include quartz countertops, stainless steel appliance packages, walk-in showers and soaking tubs, kitchen islands, spacious balconies, walk-in closets, faux wood blinds, and garages with select townhomes. Sawgrass Point is located at 2163 Veterans Boulevard in Gonzales, Louisiana. *Originally published by [www.multifamilybiz.com](https://www.multifamilybiz.com/pressreleases/14929/passco_companies_strengthens_foothold_in_louisiana...).* **Categories:** Passco News --- ### [Passco Buys 278-Unit St. Louis Community](https://www.passco.com/passco-buys-278-unit-st-louis-community/) **Published:** December 7, 2023 **Author:** Sarah Pratt **Content:** ### KeyBank originated a $33.7 million Fannie Mae loan for the acquisition Passco Cos. has purchased Cortona at Forest Park, a 278-unit community in St. Louis, from Invesco Real Estate. JLL Capital Markets facilitated the transaction, while KeyBank Real Estate Capital originated a $33.7 million Fannie Mae loan, public records show. The purchase price could not immediately be learned. The previous owner acquired the building in a two-asset portfolio transaction in 2021, Yardi Matrix data shows, and took out a $45 million permanent loan from Metropolitan Life Insurance. The Class A property was 93 percent occupied at the time of the current sale. Dating back to 2014, the five-story building encompasses studio, one- and two-bedroom layouts, varying between 575 and 1,264 square feet. Apartments feature washers and dryers, together with private balconies or patios in select units. Common-area amenities at the 4.8-acre community consist of a fitness center, business center, clubhouse, community room and a spa. In addition, the are two swimming pools with cabanas, a coffee bar, a dog park and some 350 parking spaces. Located at 5800 Highlands Plaza Drive, the building is close to Forest Park and several dining options. Brentwood Pointe, Brentwood Square and a Target are within 4 miles, while downtown St. Louis is 6.2 miles away. St. Louis Downtown Airport is 10 miles southeast. The JLL Capital Markets team involved in the transaction included Senior Director Kevin Girard, Managing Director Mark Stern and Director Zach Kaufman. Earlier this fall, the same team brokered the $95 million sale of Woodlands of Crest Hill, a 730-unit community in Crest Hill, Ill. According to a Yardi Matrix report, the St. Louis market remains steady, with an under-construction pipeline of 4,464 units as of August. In terms of supply, some 1,230 apartments came online through October, accounting for 1.0 percent of the existing stock. A total of 2,506 units are expected to be delivered until the end of the year, the same source shows. However, multifamily transactions in the metro saw a steep decline, from $823 million in sales during the first eight months of 2022, to $404 million in the same period this year. *Originally published by [www.multihousingnews.com.](https://www.multihousingnews.com/passco-buys-278-unit-st-louis-community/)* **Categories:** Passco News --- ### [Passco Sells Tampa-Area Community for $115M](https://www.passco.com/passco-sells-tampa-area-community-for-115m/) **Published:** December 21, 2022 **Author:** Synoptek Web Dev **Content:** Passco Cos. has sold off another one of its Florida communities. The company sold Longitude 82 Apartments, a 360-unit community in Sarasota, Fla., for $115 million to an undisclosed buyer. JBM Institutional Multifamily Advisors brokered the sale of the community for the second time since it was built in 2017. The Class A community is comprised of studio, one-, two- and three-bed units averaging 971 square feet. The units were built with granite countertops, faux wood flooring, kitchen islands, nine-foot ceilings, washer/dryer units and walk-in closets. The community’s amenities include a saltwater pool, fitness center, resident clubhouse, social lounge, coffee bar, catering kitchen, poolside kitchen, pet spa, car care center, outdoor fire pit and two dog parks. Located on a more than 32-acre site at 5900 Wilkinson Road, Longitude 82 is less than a mile from a Publix supermarket and the HCA Florida Sarasota Doctors Hospital. Residents also have nearby access to Interstate 75, which connects them to major nearby cities like Tampa, St. Petersburg and Fort Myers. The Sarasota submarket has been seeing explosive growth, according to CBRE’s [third quarter report](https://www.cbre.us/-/media/cbre/countryunitedstates/media/files/team/invtampamultifamily/multifamily-report_florida_q3-2022.pdf) for Florida’s multifamily market in 2022. There are currently 5,026 units under construction, while 6,2000 units were delivered in the last three years in the Sarasota submarket. The steady development of units, however, has done little to suppress rents. The adjacent markets of North Port, Bradenton and Sarasota saw 16.2 percent annual rent growth, with average rents rising to $1,949. According to the report, these Southwestern Florida markets also saw the average occupancy rate grow to 94.8 percent. Based out of Irvine, Calif., Passco Cos. has taken advantage of Florida’s rapid growth. The company purchased the recently-completed 300-unit [Sea Sound Apartments](https://www.multihousingnews.com/passco-cos-pays-93m-for-florida-asset/) in Panama City Beach, Fla. On Florida’s eastern coast, Passco Cos. sold [The Haven](https://www.multihousingnews.com/jt-capital-pays-85m-for-florida-asset/), a garden-style community in West Melbourne, Fla., in January. *Originally published by [Multi-Housing News](https://www.multihousingnews.com/passco-cos-sells-tampa-area-community-for-115m/).* **Categories:** Passco News --- ### [Passco, Greystone Purchase Independent Living Community in Knoxville](https://www.passco.com/passco-greystone-purchase-independent-living-community-in-knoxville/) **Published:** December 29, 2022 **Author:** Synoptek Web Dev **Content:** *145-unit Former Prime West Knoxville rebranded as Trustwell Living of West Knoxville.* Passco Companies in conjunction with Greystone, has acquired a Class A Independent Living Community in Knoxville TN. Greystone provided the funding while Passco Companies will be the owner and asset manager. Trustwell Living will manage the property. The community is located at 1932 Falling Waters Road. Formerly known as Prime West Knoxville, it will be renamed and branded as Trustwell Living of West Knoxville. The 145-unit community was built in 2020 and is currently 98% leased, with a waitlist. The three-story community is approximately 163,000 gross square feet and features a mix of spacious one- and two-bedroom units, with a fitness center, game room, theater, activities area, greenhouse, dog park, putting green, pickleball court, library, indoor pool, and dining room. The community will feature a number of on- and off-site activities, which range from artistic endeavors to musical entertainment, Happy Hours, and spiritual pursuits. The property is adjacent to two nationally anchored shopping centers. The Cushman & Wakefield Senior Housing Capital Markets team including Richard Swartz, Jay Wagner, Dan Baker, Aaron Rosenzweig, and Bailey Nygard, advised the seller. *[Originally published by GlobeSt.](https://www.globest.com/2022/12/29/passco-greystone-purchase-independent-living-community-in-knoxville/)* **Categories:** Passco News --- ### [Second Women’s VIP Brunch Brings Multifamily Women Together at NMHC Conference](https://www.passco.com/second-womens-vip-brunch-brings-multifamily-women-together-at-nmhc-conference/) **Published:** February 15, 2023 **Author:** Synoptek Web Dev **Content:** In 2019, Stacy Stemen, SVP of corporate marketing and business development at Passco Companies; Gina Johnson, VP of institutional sales at iApartments; and Janis Rossi, SVP of Marketing at Pay Ready devised a plan to host an exclusive event during NMHC’s Annual Meeting where women in multifamily could connect, network, and give back to a good cause simultaneously. In former years, the conference floors at NMHC were daunting for women when they were confronted by a sea of blue suits and maybe a few familiar faces of women they’d met at various events throughout the years. “We knew there was an opportunity to bring these powerhouse women together to be able to recognize a familiar face in the crowd, so they would have the ability to network and do deals together,” said Stemen. The first Women’s VIP Brunch was held at the Waldorf Astoria in Orlando in 2020. Fast forward to 2023 and the founders have just completed their second annual event. More than 50 women from various ownership, management, financing and service providers companies attended. Brunch was served, complete with a popcorn and champagne pairing, while attendees shopped an exclusive Kendra Scott pop-up store. Kendra Scott has become the exclusive partner for this event and donates 20% of all sales made during the brunch to any charity of choice. Each attendee also received a complimentary piece of jewelry from Kendra’s collection. Commercial Real Estate Women Network (CREW Network) was elected recipient of the proceeds. This donation will support CREW Network Foundation’s scholarship fund for women pursuing a degree in a commercial real estate-related field of study. “We posed the question to everyone: what did your 10-year-old self-want to be and what do you aspire to achieve in your career now?” Stemen said. “It was inspiring to see how many of these women just want to give back and make a difference. From mentoring the next generation to animal rescue to becoming a pilot to visit clients faster, the drive and passion these women have is unparalleled.” Event sponsors include Passco, iApartments, Pay Ready, ePremium, Valet Living, Resman and ResidentIQ. *Originally published by [Connect CRE](https://www.connectcre.com/stories/second-womens-vip-brunch-brings-multifamily-women-together-at-nmhc-conference/).* **Categories:** Passco News --- ### [Passco Adds Vice President of Marketing](https://www.passco.com/passco-adds-vice-president-of-marketing/) **Published:** March 1, 2023 **Author:** Synoptek Web Dev **Content:** Passco Companies LLC, a sponsor of Delaware statutory trust offerings and other alternative investments, announced the addition of Clayton Coleman as vice president of marketing. Coleman, who has nearly 10 years of experience in the real estate industry, joins Passco from RK Properties, where he served as director of sales for the company’s central and eastern U.S. territories since March 2021. Prior to that, he worked for NexPoint Securities, where he was a Delaware statutory trust product specialist for nearly five years. Coleman earned a bachelor’s degree in communications from The University of Kentucky. “We are thrilled to have Clayton on board as vice president of marketing,” Adriana Olsen, national sales manager of Passco Companies LLC, said. “His experience and expertise in the industry will be invaluable to our team as we continue to grow and expand our business. We look forward to working with him and seeing the impact he will make on our company.” Headquartered in Irvine, California, Passco Companies is a full-service real estate company that acquires, develops, and manages multifamily and commercial properties throughout the U.S. Passco currently has $3.9 billion assets under management. *Originally published by [The DI Wire](https://thediwire.com/passco-adds-vice-president-of-marketing/).* **Categories:** Passco News --- ### [Dynamic Insights: Multifamily Marketing](https://www.passco.com/dynamic-insights-multifamily-marketing/) **Published:** April 20, 2023 **Author:** Synoptek Web Dev **Content:** Passco’s Senior Vice President of Corporate Marketing & Development, Stacy Stemen, joined Mike Wolber, Chief Revenue Officer at Rent Dynamics and Host of the Modern Multifamily Podcast for a live and in-person interview at the 2023 Multifamily Social Media Summit in Napa Valley. Wolber describes Stemen as having “an incredible background leading initiatives in multiple industries ranging from non-profits, to hospitality, to fitness that all play into the marketing campaigns she and her team run today!” To listen to the full Podcast, visit the [**Dynamic Insights YouTube channel**](https://youtu.be/InDPgQ6mcjc). **Categories:** Passco News --- ### [In Loving Memory of John W. “Jack” Fitzgibbon](https://www.passco.com/in-loving-memory-of-john-w-jack-fitzgibbon/) **Published:** June 12, 2023 **Author:** Sarah Pratt **Content:** It is with heavy hearts that we announce the passing of our dearest friend and esteemed colleague, John “Jack” Fitzgibbon, Senior Vice President & General Counsel at Passco Companies. Jack Fitzgibbon was an integral part of our Passco Family and we remember him as an outstanding individual who has made an impact on our company and the lives of all who had the privilege of knowing him. Jack was born in Newark, New Jersey on June 17, 1954, the eldest of four children of Kathleen R. and John T. Fitzgibbon. Jack attended the Holy Family School in Florham Park and spent his high school years at St. Benedict’s Prep in Newark. Jack received his undergraduate degree from Bucknell University, spending 4 years as a member of the men’s golf team. He began his legal career in New Jersey, however Jack’s interest in real estate law led him to leave the East Coast for Southern California. Jack joined Passco 9 years ago and is remembered for his unwavering dedication that exemplified the values and principles that define our organization. Jack has spent 20+ years in the field of real estate law as a well-respected and recognized expert, winning the 2022 Connect CRE Lawyers in Real Estate Award. Beyond his professional achievements, Jack was known for offering support that extended beyond the workplace. He actively participated in various charitable endeavors and leaves a legacy of compassion and generosity. Jack’s Catholic Faith was one of the cornerstones of his life, and he quickly became engaged with the community at Our Lady Queen of Angels Roman Catholic Church in Newport Beach. He volunteered much of his time to different ministries within the parish and was fondly referred to by many as the community’s Minister of Hospitality. Throughout Jack’s life, he was many things to many people: a loving husband, son and brother; an engaging and entertaining companion and friend; and a most trusted advisor. His quick wit and easy smile brought charm and warmth to any gathering. We invite all who knew and admired Jack to join us in celebrating his remarkable life. We extend our deepest condolences to Jack’s family and loved ones as we share in their grief and cherish the memory of him. **Categories:** Passco News --- ### [Passco Travels Back in Time to Celebrate 25th Anniversary](https://www.passco.com/passco-travels-back-in-time-to-celebrate-25th-anniversary/) **Published:** June 24, 2023 **Author:** Sarah Pratt **Content:** Passco Companies recently celebrated its 25th anniversary. To commemorate the occasion, the Passco team traveled from their Irvine headquarters to the site of the transaction that put the company on the map: a 1031 exchange acquisition of the Puente Hills Mall in City of Industry. The 2003 deal, involving Passco and 32 other investors, was the largest 1031 transaction to date, valued at $148 million. Two years later, Passco traded the 65-acre property for $170 million. The shopping center was already a part of history even before it figured in a landmark real estate deal. It stood in for the fictional Twin Pines Mall in the hit 1985 movie *Back to the Future*, marking the spot where Marty McFly (Michael J. Fox) and Doc Brown (Christopher Lloyd) began their trip back in time in a Delorean. The celebrants at the Passco anniversary arrived by bus rather than gull-winged sports car, but they were greeted by a replica of Doc Brown’s time machine when they arrived at the mall. The group then proceeded into the mall, where the “Twin Pines Mall” signage from the movie is displayed. They presented the property manager, Ken Mason, with a lifetime achievement award, since he was the manager in 2003 when Passco purchased the asset. Since the Puente Hills Mall deal put Passco on the map, the company has built a name for itself throughout the industry. Currently it has $3.9 billion in assets under management and owns properties across 15 states, primarily multifamily. They include Pearce at Pavilion in Riverview, FL (pictured). In the video below, you’ll get a recap of the 25th anniversary celebration. *Originally published by [Connect Media](https://www.connectcre.com/stories/passco-travels-back-in-time-to-celebrate-25th-anniversary/?utm_medium=email&_hsmi=266404938&utm_content=266404938&utm_source=hs_email). Photo courtesy of Lapporte Photography.* **Categories:** Passco News --- ### [Passco’s 25th Anniversary Celebration Continues in Style](https://www.passco.com/7163-2/) **Published:** July 19, 2023 **Author:** Sarah Pratt **Content:** At Passco, we work hard and play harder! We continued the celebration of our 25 years in business with a spectacular summer party that left everyone buzzing with excitement. This years’ party was a testament to our success and growth over the years, as well as an opportunity to express gratitude to all those who have been part of our journey. With a Duffy boat scavenger hunt, a cookout at the American Legion, live music by the band Common Sense, and an enthusiastic crowd that included our entire Passco family from across the country, this summer party was a huge hit! Adding to the celebration’s success, we are proud to have incredible sponsors like Entrata, Marsh, Mayer Brown, and Partner Engineering who contributed to making our summer party an unforgettable experience. As we continue our journey, this event will be remembered as a milestone celebration that embodies our spirit of growth, community, and unwavering commitment to excellence. We would like to thank Connect Media for their exclusive coverage of our event. Please click on the video below to relive our biggest summer party yet! **Categories:** Passco News --- ### [Passco Sells Southwest Florida Community for $102M](https://www.passco.com/passco-sells-southwest-florida-community-for-102m/) **Published:** November 14, 2023 **Author:** Sarah Pratt **Content:** Goldelm has purchased ParkCrest Landings, a 400-unit community in Bradenton, Fla., for $102 million. JBM Institutional Multifamily Advisors represented the seller, Passco Cos. Arbor Realty Trust provided a $62 million loan with a September 2024 maturity date, according to public records. Yardi Matrix data shows that the buyer also assumed an existing $48.8 million Fannie Mae loan, originated by KeyBank in 2016. That same year, Passco acquired the asset for $75 million. ParkCrest Landings came online in 2015 and encompasses 17 two- and three-story buildings. Units offer one-, two- and three-bedroom floorplans, ranging between 612 and 1,404 square feet. Common-area amenities of the Class A property include a fitness center, clubhouse, business center, volleyball court, as well as two swimming pools and a spa. Residents also have access to around 920 parking spaces. The 78.4-acre property is at 5725 1st Ave. East, close to a Walmart Supercenter and a few dining options. Ellenton Premium Outlets is 6 miles northwest, while The Mall at University Town Center is some 9 miles away. Tom Bennett Park is within walking distance. Earlier this year, Passco Cos. sold a 260-unit luxury community, also located in Southwest Florida. Longitude 81 Apartments traded for $78.8 million, Yardi Matrix data shows. *Originally published by [Multi-Housing News](https://www.multihousingnews.com/passco-sells-southwest-florida-community-for-102m/).* **Categories:** Passco News --- ### [Passco Closes On Largest Apartment Acquisition In Passco History](https://www.passco.com/passco-closes-on-largest-apartment-acquisition-in-passco-history/) **Published:** November 28, 2023 **Author:** Sarah Pratt **Content:** *303-unit Luxury Multifamily Community in Knoxville, TN trades for $120.7M* Passco Companies, a privately held California-based commercial real estate company that specializes in acquisition, development, and property and asset management throughout the U.S., in conjunction with its joint venture partner, Greystone, a national commercial real estate finance and investment company, has acquired One Riverwalk, a 303-unit luxury apartment community completed in 2019 and located within Knox County in the Knoxville, TN MSA. The property is 97% occupied. Through a long-term relationship with Augusta-based Southeastern, the developer of One Riverwalk, Passco was able to negotiate the direct purchase of the property, which represents the third direct transaction between the two firms since 2019. The total consideration of transactions between Passco and Southeastern has now exceeded $250MM. The other two assets include Grand Oaks at Crane Creek in Augusta, GA and One Hampton Lake in Bluffton, SC. The purchase was subject to the assumption of a 10-year, $64.29MM Freddie Mac loan bearing a 3.12% fixed rate with over 3 years interest only periods remaining. The loan assumption was key to both firms finding mutually beneficial motivations to transact, during a time where multifamily transactions are down nationally nearly 75% since last year. Passco was very attracted to the opportunity to expand their holdings in the Knoxville market and has experienced tremendous success from their performance of their other two multifamily assets in the market, Tapestry Turkey Creek and Trustwell Living of West Knoxville. Both assets have been outsized performers within Passco’s $4 billion portfolio. According to Colin Gillis, Senior Vice President of Acquisitions at Passco, “One Riverwalk has exhibited phenomenal performance metrics since reaching stabilization in 2020 which underscores how special the asset and location are. Apartment fundamentals within the Knoxville MSA are some of the strongest in the country and have remained consistently robust in a time where there has been significant softness across the rental sector nationally.” “One Riverwalk is a one-of-a-kind generational opportunity to own what is arguably one of the best assets in one of the best locations in the state of Tennessee. The property has an unbelievable setting overlooking the Tennessee river and can be seen from nearly all parts of downtown. Having been built on top of the former abandoned Baptist Hospital in an underutilized blighted pocket of town, the property single handedly transformed the south side of Knoxville into a burgeoning hub of exciting new developments. Southeastern had tremendous vision when they undertook this project and the impact that One Riverwalk had on the immediate area has been truly phenomenal”, explains Gillis. “We’re thrilled to partner with Passco on this transaction. The ongoing collaboration serves as a testament to our relationship and further demonstrates our ability to execute within these market conditions,” said Stanley Wuu, Director, Greystone, who works closely with Passco to help grow a portfolio of attractive multifamily investments for the two companies’ joint venture DST platform. This waterfront property sits upon 3.35 acres boasting views of Downtown Knoxville. One Riverwalk is comprised of two 5-story residential buildings offering a mix of studio, 1, 2-bedroom units averaging 884 square feet. Each unit is modern with quartz countertops, luxury faux wood flooring, tile backsplash, stainless steel appliances, full lighting packages and beautiful views of the Tennessee River. The community is just a bridge away from everything and located at 151 E. Blount Ave. Knoxville, TN. *Originally published by [Yahoo! Finance](https://finance.yahoo.com/news/passco-closes-largest-apartment-acquisition-154500797.html).* **Categories:** Passco News --- ### [Celebrating Three Years of Empowerment: Annual Women's VIP Brunch at NMHC](https://www.passco.com/celebrating-three-years-of-empowerment-annual-womens-vip-brunch-at-nmhc-annual/) **Published:** February 5, 2024 **Author:** Sarah Pratt **Content:** In the traditionally male-dominated realm of commercial real estate, Stacy Stemen, the Senior Vice President of Corporate Marketing and Development at Passco Companies, is recognized for her visionary initiative. Three years ago, she spearheaded the creation of the Women’s VIP Brunch, an event designed to unite and empower women professionals within the industry. Now in its third successful year, this brunch has become a cornerstone at the National Multifamily Housing Council (NMHC) annual conference. Stacy Stemen’s foresight was fueled by a desire to foster a sense of community among women working in an industry where they often find themselves navigating a sea of male counterparts. Recognizing the need for a dedicated space where women could connect, network, and support each other, she proposed the idea of an exclusive brunch during the NMHC annual conference. This year’s Women’s VIP Brunch, held at the San Diego Wine & Culinary Center, was a resounding success! Attendees were welcomed with an intimate and conducive environment for networking and collaboration, breaking away from the usual conference setting and allowing for meaningful connections to flourish. Adding a touch of glamour and philanthropy to the event, the Women’s VIP Brunch partnered with renowned jewelry brand Kendra Scott. Kendra Scott generously donated gifts to all attendees, providing a token of appreciation for their presence. Additionally, Kendra Scott set up a jewelry display at the event, with all sales proceeds dedicated to CREW (Commercial Real Estate Women) Network’s local Orange County chapter. This partnership contributed to supporting CREW’s mission of empowering women in the CRE industry. The Women’s VIP Brunch at the NMHC annual conference stands as a testament to the power of vision and the impact that can be achieved when women come together to support one another. As the brunch celebrates its third year, it is clear that this annual tradition is here to stay, providing inspiration and empowerment for years to come. We extend our heartfelt gratitude to the event’s esteemed sponsors: Apartment Snapshot, Asset Essentials, ePremium, Flex, iApartments, Passco Companies, Pay Ready, ResidentIQ, ResMan, and Valet Living. Your generous support is truly appreciated. **Categories:** Passco Exchange --- ### [Larry Sullivan Speaks at UCI’s Paul Merage School of Business Center for Real Estate Breakfast Meeting](https://www.passco.com/larry-sullivan-speaks-at-ucis-paul-merage-school-of-business-center-for-real-estate-breakfast-meeting/) **Published:** February 1, 2024 **Author:** Sarah Pratt **Content:** University of California, Irvine’s Paul Merage School of Business Center for Real Estate kicked off the New Year with an insightful Breakfast Meeting held at the Pacific Club in Newport Beach. Titled “The Great Repositioning of CRE, Money, and Assets,” the event drew real estate enthusiasts, professionals, and students alike. The panel, comprised of Orange County’s leading industry experts, examined the critical theme of “repositioning” in commercial real estate by discussing the dynamic intersections of money and assets in the ever-evolving market. A featured speaker at the event was Larry Sullivan, President of Passco Companies, who shared his perspective on the challenges and opportunities within the real estate landscape. Larry’s contribution brought an additional layer of insight to the panel, enriching the discourse with Passco’s innovative ideas that are influencing and shaping the industry. The diverse perspectives shared by the panelists provided a platform to share growth strategies in the ever-dynamic field of commercial real estate. Marking calendars for future events hosted by the Center for Real Estate is undoubtedly a wise decision for those eager to stay at the forefront of industry developments. **Categories:** Passco Exchange --- ### [Passco Companies Shares Social Media Marketing Expertise with Newport Harbor High School Students](https://www.passco.com/passco-companies-shares-social-media-marketing-expertise-with-newport-harbor-high-school-students/) **Published:** December 19, 2023 **Author:** Sarah Pratt **Content:** Passco recently extended its commitment to community engagement by providing invaluable insights into the world of social media marketing. Stacy Stemen, Passco’s Senior Vice President of Corporate Marketing & Development, lead a conversation around social media marketing at Newport Harbor High School in Orange County, addressing the ASB students interested in practicing effective digital marketing strategies for the high school’s social pages. Stacy Stemen’s discourse not only highlighted the power of social media as a marketing tool but also emphasized the ethical considerations and responsible practices necessary for effective and sustainable marketing. The event bridged between the corporate world and young minds, aiming to equip the students with essential knowledge about navigating the dynamic landscape of social media marketing. Stacy Stemen shared the core principles and best practices essential for success in this ever-evolving field. Passco strives to be a catalyst for educational growth within the communities it serves. By engaging with schools like Newport Harbor High School, Passco demonstrates its dedication to fostering growth in the next generation of marketers and professionals. As Passco continues its journey as an industry leader, it remains committed to creating meaningful connections, sharing expertise, and inspiring others to explore opportunities. **Categories:** Passco Exchange --- ### [Passco Supports the 2022 Komen Orange County MORE THAN PINK Walk](https://www.passco.com/passco-supports-the-2022-komen-orange-county-more-than-pink-walk/) **Published:** September 25, 2022 **Author:** Synoptek Web Dev **Content:** September 25, 2022 “We walk for the people who can’t: for those too weakened by treatment to join. For those who are suffering. For those we have lost. Together we will fight back against breast cancer.” On September 25th, we gathered together as ONE at the Orange County MORE THAN PINK Walk to support Susan G. Komen and their ONE goal: to end breast cancer forever. The MORE THAN PINK Walk is Komen’s signature fundraising event where everyone can come together and share stories, laughter, and tears to raise money that saves lives while celebrating survivors, those living with breast cancer, and honoring loved ones lost. Komen’s comprehensive 360-degree approach to fighting this disease across all fronts includes advocating for patients, driving research breakthroughs, improving access to high-quality care, offering direct patient support and empowering people with trustworthy information. Komen’s mission supports millions of people in the U.S. and in countries worldwide. We are excited to share that, together, we helped raise $564,053! Team Passco significantly surpassed our fundraising goal and hit a total of $6,872! Komen’s mission is only as strong as the community that supports it and what we have accomplished together is no small feat. We are proud to have demonstrated true passion and commitment to the breast health community through our sponsorship. *To learn more about the Susan G. Komen Orange County MORE THAN PINK Walk, please visit [www.Komen.org](https://www.komen.org/)* **Categories:** Passco Exchange --- ### [Passco Welcomes UCI Students at Corporate Office](https://www.passco.com/passco-welcomes-uci-students-at-corporate-office/) **Published:** February 22, 2023 **Author:** Synoptek Web Dev **Content:** February 22, 2023 Passco Companies held its annual Executive Roundtable for the University of California, Irvine’s Center for Real Estate. The event brought together some of the most prominent commercial real estate executives in Orange County to provide valuable career information and advice to the Center for Real Estate students. Passco Companies presented Larry Sullivan, Stacy Stemen, Grant Foster and Dayna Abdel as their representatives for the event. Chris Voros, Project Executive at Snyder Langston, and Michelle Schieberl, Senior Vice President at Kidder Mathews, also shared their experiences and expertise with the students. The event offered the Center for Real Estate students an exclusive opportunity to interact with seasoned professionals and learn about the industry’s inner workings. Students were eager to learn from the panelists about their pathway to success and what they wished they knew when they started in commercial real estate. The speakers shared personal stories of their career journeys, including their successes and challenges, as well as valuable insights into what it takes to succeed in this competitive industry. We thank Snyder Langston and Kidder Mathews for their time and expertise, which made the event a huge success. The Executive Roundtable was an excellent opportunity for students to gain valuable insights and knowledge from successful industry leaders. Passco looks forward to hosting more events like this for University of California, Irvine’s Center for Real Estate in the future. **Categories:** Passco Exchange --- ### [Enhancing Community Performance: Unveiling the Power of Passco Road Shows](https://www.passco.com/enhancing-community-performance-unveiling-the-power-of-passco-road-shows/) **Published:** June 6, 2023 **Author:** Sarah Pratt **Content:** June 6, 2023 In the realm of property management, the pursuit of excellence is a never-ending journey. As regional and community managers strive to deliver exceptional results, embracing best practices becomes crucial. Enter: Passco Road Shows – an innovative initiative designed to bring together multiple departments, foster collaboration, and empower management teams with the knowledge to enhance efficiencies and overall performance within their communities. After the success of the inaugural Road Show in Houston, Texas, Passco will continue to host a series of events for their management partners in Atlanta, Georgia this summer. **Collaborative Training Sessions** Passco Road Shows encompass a series of training sessions where PMC Regional Managers, Onsite Community Managers, and the PMC Accounting Team gather to engage in insightful discussions. The objective is to share and explore best practices from various departments and foster a cross-functional approach to property management across Passco’s portfolio of $3.9B AUM. By creating a collaborative environment, the Passco Road Shows encourage the exchange of ideas and experiences, enabling participants to gain a holistic understanding of the industry’s most effective strategies. **Departments at the Forefront** To ensure a comprehensive exploration of property management excellence, Passco Road Shows incorporate multiple departments, each contributing their unique insights and expertise. Accounting, Software, Performance Analytics, and Investment Management are among the key areas covered during these sessions. This diverse representation ensures that all facets of community management are addressed, allowing participants to broaden their knowledge base and develop a more well-rounded approach to their roles. **Unveiling Best Practices** One Passco’s primary goals of the Road Shows is to unveil best practices and equip attendees with practical tools to elevate their day-to-day operations. By sharing experiences and success stories, the Road Shows inspire participants to think creatively, adapt to evolving industry trends, and implement effective strategies that can yield tangible results. The collective wisdom of the experts involved creates a dynamic learning environment that encourages innovation and growth. **Enhancing Efficiencies and Performance** At the heart of the Road Shows lies the desire to enhance efficiencies and overall performance across Passco’s portfolio. By applying the best practices shared during these sessions, community teams gain invaluable insights into streamlining processes, optimizing resources, and improving the overall resident experience. From innovative software solutions to data-driven performance analytics, participants are empowered to take tangible steps towards achieving operational excellence. Passco Road Shows are replete with key takeaways that community managers and PMC Accounting teams can bring back to their organizations in order to enhance operations. **Strategic Partnerships** We would like to take a moment to extend our gratitude to the event sponsors who have played a pivotal role in making the Passco Road Shows a resounding success. Their generous contributions and support have enriched the training sessions, enabling us to provide exceptional value to all participants. We would like to express our sincere appreciation to the following sponsors: - iApartments - JRC Nationwide Construction - National Credit Systems, Inc. - Valet Living Passco Road Shows offer a unique opportunity for regional and community managers to come together, learn from each other, and discover innovative strategies to enhance efficiencies and overall performance. By implementing best practices, communities can elevate their operations, improve resident satisfaction, and thrive in the competitive landscape of property management. The collective wisdom and collaborative spirit fostered by Passco serve as a beacon of inspiration, setting the stage for a brighter future in the realm of community. **Categories:** Passco Exchange --- ### [Multifamily Leadership Recognizes Passco Companies as the Best Place to Work in Multifamily for Women](https://www.passco.com/multifamily-leadership-recognizes-passco-companies-as-the-best-place-to-work-in-multifamily-for-women/) **Published:** December 8, 2021 **Author:** Synoptek Web Dev **Content:** December 8, 2021 Passco Companies has ranked #1 in the nationwide Top 35 Best Places to Work Multifamily® for Women. This is an exciting list based on data gathered from the research conducted through the national Best Places to Work Multifamily® program. The only way to earn a rank on this prestigious list is to have participated and ranked as one of the Official Top 50 National Best Places to Work Multifamily® that was revealed on December 8, 2021, at the Multifamily Awards Show. This award show was broadcast live to an audience of thousands of industry professionals. Of those 50 best-in-class organizations, 35 have earned a spot on this list by having created cultures in which the women who were surveyed provided positive responses about where they worked. Ranking companies need a minimum of 15 females working in the organization or 25%, whichever is greater. The female response rate must be 40% or greater unless the total female count is less than 25 at which point the response rate must be 80% or greater. The ranked order is determined by the female percent of positive response, largest to smallest. This type of program is the voice of the employees in the apartment industry reaching beyond membership and trade organizations. It is not based on judges from suppliers or company volunteers and cannot be influenced by sponsorship or fundraising campaigns. The national research and benchmarking program demonstrates the industry’s focus on people while illustrating its overall potential — as the Multifamily Industry, serving apartments and their residents, contributes more than 3.4 trillion dollars to the U.S. economy and supports more than 17.5 million jobs. The 2022 Best Places to Work Multifamily® for Women, in ranking order, are: 1. Passco Companies, LLC 2. The Garrett Companies 3. Hankin Apartments 4. StoneRiver Company 5. The Franklin Johnston Group 6. Perennial Properties 7. SYNC Residential 8. Knock 9. DLP Capital 10. Scully Company 11. Laramar Group LLC 12. RealSource Properties 13. The REMM Group 14. ResMan 15. Chestnut Hill Realty Corp 16. PLK Communities 17. The RADCO Companies 18. Respage 19. Apartment Dynamics 20. Stoa Group 21. APARTMENT SEO, LLC 22. The Westover Companies 23. Portico Property Management 24. IMT Residential 25. Dasmen Residential 26. WRH Realty Services 27. ALCO Management, Inc. 28. Presidium 29. Milhaus 30. Valiant Residential 31. American Communities 32. ITEX 33. JVM Realty 34. Carter-Haston Real Estate Services 35. Reliant Property Management, Inc. For more information about, and to register for, the “Best Places to Work Multifamily®” program, go to [www.multifamilyleadership.com](http://multifamilyleadership.com/). *Originally published by [MultifamilyBiz](https://www.multifamilybiz.com/pressreleases/14330/multifamily_leadership_announces_the_top_35_nation)* **Categories:** Passco News --- ### [Passco IDs Baton Rouge’s Potential with $130M Multifamily Buys](https://www.passco.com/passco-ids-baton-rouges-potential-with-130m-multifamily-buys/) **Published:** December 7, 2021 **Author:** Synoptek Web Dev **Content:** December 7, 2021 Passco Companies has purchased two multifamily communities in Baton Rouge, LA submarkets for a combined $130 million. The Class A properties span 552 units and bring the firm’s year-to-date volume to $792 million. Passco acquired 276-unit Tapestry Long Farm from Arlington Properties and 276-unit Sweetwater Apartment Homes from Stoa Group. Arlington Properties will manage both assets moving forward. In the Tapestry Long Farm transaction, both Passco and the seller were represented by Mike Kemether and Larry Schedler of Cushman & Wakefield. In the Sweetwater Apartments transaction, both Passco and the seller were represented by Jeffery Glassover and Matthew Raitz of Glassover & Raitz, LLC. The buys represent Passco’s entrance into the Baton Rouge market. “These acquisitions exemplify Passco’s long-term strategy of identifying exceptional assets in up-and-coming markets where value creation is still possible,” said president Larry Sullivan. “Baton Rouge is an often-overlooked investment market with solid fundamentals poised for substantial long-term growth. *Originally published on [Connect Media](https://www.connectcre.com/stories/passco-ids-baton-rouges-potential-with-130m-multifam-buys/?utm_medium=email&_hsmi=192688947&utm_content=192688947&utm_source=hs_email).* **Categories:** Passco News --- ### [Greystone Forms JV with Passco Cos. for DST Investment Sector](https://www.passco.com/greystone-forms-jv-with-passco-cos-for-dst-investment-sector/) **Published:** January 20, 2022 **Author:** Synoptek Web Dev **Content:** January 20, 2022 Greystone, a national commercial real estate finance company, and Passco Cos., a privately held California-based commercial real estate company specializing in real estate acquisition, development and asset management throughout the United States, have announced a strategic alliance to provide their respective clients and investors with enhanced benefits surrounding the Delaware Statutory Trust (DST) commercial real estate (CRE) investment channel, as well as other real estate investment opportunities in the future. The Greystone-Passco alliance creates an institutional sponsor in the DST investment sector. The Greystone-Passco alliance will provide a broader range of acquisition opportunities including post-construction and pre-stabilized properties. *Originally published by [Institutional Real Estate, Inc](https://irei.com/news/greystone-forms-jv-passco-cos-dst-investment-sector/).* **Categories:** Passco News --- ### [Passco Hosts "MBA to Executive Roundtable" Event](https://www.passco.com/passco-hosts-mba-to-executive-roundtable-event/) **Published:** February 24, 2022 **Author:** Synoptek Web Dev **Content:** February 24, 2022 The University of California, Irvine advisory board member Passco Companies hosted an in-person meeting entitled “MBA to Executive Roundtable” at Passco’s corporate headquarters in Irvine. The event featured speakers from different industry backgrounds who shared tips on getting hired in the remote world, insights into their careers and thoughtful advice. Students and attendees were able to ask candid questions about their career journeys. The event was organized by Passco’s Senior Vice President of Corporate Marketing & Development, Stacy Stemen. Passco’s President, Larry Sullivan, participated as a panelist in this unique and valuable student event. To lear more about the UCI Paul Merage School of Business’ Center for Real Estate, please visit [www.merage.uci.edu/cre](http://www.merage.uci.edu/cre). **Categories:** Passco News --- ### [Passco Appoints Adriana Olsen to National Sales Manager](https://www.passco.com/passco-appoints-adriana-olsen-to-national-sales-manager/) **Published:** May 4, 2022 **Author:** Synoptek Web Dev **Content:** May 4, 2022 Passco Companies has appointed Adriana Olsen to national sales manager. With this promotion, Olsen, who previously served as the firm’s senior vice president of marketing, “deepens her role” across all marketing efforts on a national scale, said Belden Brown, executive vice president and partner at Passco. “Adriana has played an instrumental part in Passco’s success over the past two decades, spearheading our firm’s marketing efforts and helping to cultivate our exceptional reputation among broker-dealer and investor communities throughout the country,” said Brown. “In her new role, she will oversee the marketing department’s initiatives to continue to strengthen Passco’s presence in the securities industry. Prior to joining Passco roughly two decades ago, Olsen served as a licensed real estate agent with Prudential Real Estate. She holds a bachelor’s degree from the University of Delaware and is an active member of the Alternative & Direct Investment Securities Association (ADISA). Passco noted that Olsen’s appointment coincides with its “ongoing expansion,” as it continues to grow its capabilities and potentially move into new markets, product types, and investment channels. Greystone, a commercial real estate finance company, acquired a minority ownership stake in Passco earlier this year. In addition, Passco said that it added 10 new team members in 2021 and nine year-to-date. Passco Companies, a full-service real estate company, acquires, develops, and manages multifamily and commercial properties throughout the U.S., and provides other services such as asset management, property development and construction. The firm currently has $3.7 billion assets under management. *Originally published on [The DI Wire.](https://thediwire.com/passco-appoints-national-sales-manager/)* **Categories:** Passco News --- ### [Passco Ranks Among Orange County Business Journal's Top Private Companies List](https://www.passco.com/passco-ranks-among-orange-county-business-journals-top-private-companies-list/) **Published:** June 12, 2022 **Author:** Synoptek Web Dev **Content:** June 12, 2022 Orange County’s biggest private companies are getting bigger. The 35 companies on the Business Journal’s annual list reported a 25% jump in revenue to $100 billion last year. That compares to a 1% gain in revenue in 2020 and a 3.1% increase in 2019. The boom was widespread-19 increased their sales, including 14 by more than double digits. The largest gainer on the list was Passco Cos., an Irvine-based developer and real estate apartment investor with nearly 14,500 units in its portfolio. Its revenue more than doubled to $1.8, billion, as it climbed from No. 24 to No. 12. “Last year was our busiest ever with $1.7 billion in transactional volume,” Senior Vice President of Corporate Marketing Stacy Stemen told the Business Journal in a recent interview. *Originally published by [Orange County Business Journal](https://www.ocbj.com/economy/largest-private-companies-report-25-jump-in-sales/).* **Categories:** Passco News --- ### [Multifamily Leadership Recognizes Passco as an Official Best Place to Work Multifamily®](https://www.passco.com/multifamily-leadership-recognizes-passco-as-an-official-best-place-to-work-multifamily/) **Published:** December 8, 2022 **Author:** Synoptek Web Dev **Content:** December 8, 2022 Passco Companies has ranked #14 in the nationwide Best Places to Work Multifamily®, published annually by Multifamily Leadership. We were honored at the Multifamily Innovation® Summit in Scottsdale, AZ on December 7-8, 2022 where we not only found out our nationwide ranking, but we also had the opportunity to attend the Multifamily Innovation® Showcase and network with other executive level multifamily professionals. The Multifamily Industry, serving apartments and their residents, contributes more than $3.4 trillion to the economy annually, supporting more than 17.5 million jobs. Not only do apartment homes drive jobs that strengthen local communities, individuals and families realize the value of renting as a smart choice in today’s economy. As CEOs and executive teams create culture and innovation around the resident experience, employee engagement is seen as a key driver to meet multiple challenges. The Best Places to Work Multifamily® program recognizes those companies who have established and consistently foster outstanding workplace environments. The rigorous assessment process evaluated each company’s employee policies and procedures as well as responses from the company’s employees. The program is part of a long-term initiative to encourage growth and excellence throughout the Multifamily Apartment Industry and to attract new leaders to the industry. If you want to know if it’s a great place to work, you ask the people who work there. Patrick Antrim, Founder and CEO of Multifamily Leadership says, “Employee engagement is actually a much more powerful indicator of organizational success than the size of the company, as employee engagement is tied to behavior and higher performance.” The program also helps companies who want to improve their business. The “Insights Report” is presented to each participating company, even if it did not make the list. The report summarizes employee engagement and satisfaction data, the “Multifamily Leadership Benchmark Report,” and the transcript of employee written comments. The report is used by many organizations to make significant improvements in their workplace culture. Antrim further states, “Next generation leaders want to know their company is making a positive impact on the world. They want to know the vision and mission of the organization and that the leaders of the organization are going to drive that mission and vision. This is becoming increasingly more important as society is asking businesses to play a bigger role. The Best Places to Work Multifamily® companies have stepped up to play that role and will have a much bigger voice in the future.” *Originally published by [Multifamily Leadership](https://multifamilyinnovation.com/national-best-places-to-work-multifamily-2023-official-ranking-announced/).* **Categories:** Passco News --- ### [Passco Ranks Amongst The OC Register’s Top Workplaces in 2022](https://www.passco.com/passco-ranks-amongst-the-oc-registers-top-workplaces-in-2022/) **Published:** December 9, 2022 **Author:** Synoptek Web Dev **Content:** December 9, 2022 It was a record-setting year for the 15th annual Top Workplaces program in Orange County. In all, 169 companies, the most ever honored in the program, made the list for their top-notch work culture in 2022. The first year unshackled by the pandemic brought a number of milestones to many companies while others began to brace for a looming recession. At the center of all the accolades were two words: “our people.” Not the bosses, not the bottom lines. The people. As it goes for most thriving workplaces, putting employees front and center helped to create a collaborative and career-nurturing culture that rose above all others. This year, 4,180 employers in the county were invited to have their employees take a survey managed by Energage. Combined, the companies surveyed employed 49,384 people in the county. The program also welcomed 48 newcomers, including honoree Passco Companies. *Originally published by [The Orange County Register](https://topworkplaces.com/award/ocregister/).* **Categories:** Passco News --- ### [John "Jack" Fitzgibbon Awarded Connect CRE's 2022 Lawyers in Real Estate Award - California](https://www.passco.com/john-jack-fitzgibbon-awarded-connect-cres-2022-lawyers-in-real-estate-award-california/) **Published:** December 12, 2022 **Author:** Synoptek Web Dev **Content:** December 12, 2022 For its third annual Lawyers in Real Estate Awards, Connect CRE chose 110 attorneys from around the U.S. representing a variety of disciplines. They were selected for excelling in their practices as well as their contributions to the community. The award celebrates real estate attorneys who have distinguished themselves in their practice and the larger community. As done in 2021, Connect CRE spotlighted 10 attorneys nationally and from each of the 10 areas covered by their regional newsletters: California, Texas, New York, Chicago, Atlanta, Boston, Florida, Seattle, Phoenix and Washington, DC. Passco Companies is proud to congratulate Senior Vice President & General Counsel John “Jack” Fitzgibbon, Esq. for being recognized this year. In his role as General Counsel with Passco, Jack Fitzgibbon handles all legal matters pertaining to the company’s property investments. He also provides counsel, while managing the firm’s overall corporate governance matters. Fitzgibbon oversaw and closed more than $1 billion in multifamily acquisitions and dispositions on behalf of Passco over the past 12 months. *Originally published by [Connect Media](https://www.connectcre.com/awards/2022-lawyers-in-real-estate-awards/california/john-fitzgibbon/).* **Categories:** Passco News --- ### [Introducing Passco Exchange: Your Ultimate Source for Industry News and Insights](https://www.passco.com/introducing-passco-exchange-your-ultimate-source-for-industry-news-and-insights/) **Published:** October 23, 2023 **Author:** Synoptek Web Dev **Content:** In a world that’s constantly evolving, staying informed and ahead of industry trends is vital. At Passco Companies, we understand the importance of providing valuable insights to the commercial real estate community. That’s why we are thrilled to introduce our all-new industry news and insights channel – Passco Exchange! Passco Exchange is a groundbreaking concept that aligns seamlessly with our revamped website, brand, and digital communication strategy. This dynamic channel is where our executive leadership unites to share their deep insights into industry trends, offer updates on the remarkable performance of our portfolio, and candidly discuss our perspectives and strategies in today’s ever-evolving markets. Passco Companies has a long-standing reputation for excellence and innovation in the commercial real estate industry. We’ve harnessed our expertise to create Passco Exchange, which will serve as a beacon of knowledge and innovation in the industry. We want to empower you with the knowledge and insights you need to make informed decisions in your investment journey. We will offer a mix of video and written content, allowing you to choose the format that best suits your preferences and needs. Passco Exchange is designed to be a forward-thinking resource that adapts to the changing landscape and keeps you updated with the latest industry developments. As we launch this new initiative, we invite you to explore this exciting addition to our online presence. Whether you’re a seasoned industry professional or just beginning your journey, Passco Exchange will prove to be an invaluable resource. We’re dedicated to delivering the highest quality of content and fostering a community that values knowledge and innovation. Stay tuned for our upcoming content releases and be sure to follow Passco Companies on LinkedIn and Instagram to get the latest updates. **Categories:** Passco Exchange --- ### [AIM Conference](https://www.passco.com/aim-conference/) **Published:** April 20, 2022 **Author:** Synoptek Web Dev **Content:** April 25 – 25, 2022 Hyatt Regency Huntington Beach Resort & Spa | Huntington Beach, CA Founded in 2005, the Apartment Internet Marketing Conference (AIM Conference) is the most detailed and informative event in the industry, and is sure to attract the industry’s leading buyers of online and transactional services again in 2022. AIM has been the only multifamily industry conference that focuses on marketing technology, the psychology of marketing, automation and artificial intelligence, leasing technology, future tech, transportation and logistics, innovation in real estate, ethics of personalized data-gathering and marketing, selling and marketing cutting-edge enhancements to rental living, service amenities, new technology, and shared revenue. **Featured Panel: Lifecycle Marketing & New Age Amenity Packages** *Monday, April 25, 2022 | 2:45 PM – 3:30 PM* Multifamily leaders understand the challenge of dollars spent turning leads into leases, only to have those precious leases turn over in 12 months. Bringing in unique perspectives across the industry (and across different markets), hear from the experts how lifecycle marketing applies to multifamily, and how technology and amenities can play a central role in creating value through resident retention. Speakers: - **Stacy Stemen, SVP, Corporate Marketing Development, Passco Companies** - Kaino Clark, CMO, The Wasatch Group - Mike Wolber, CRO, Rent Dynamics - Travis Block, Director of Digital Marketing & Branding, Waterton Please visit [www.AIMconf.com](http://www.aimconf.com/) for full event details and to register online. **Categories:** Passco News --- ### [Passco Companies Acquires New 300-Unit Multifamily in Panama City Beach](https://www.passco.com/passco-companies-acquires-new-300-unit-multifamily-in-panama-city-beach/) **Published:** December 13, 2022 **Author:** Synoptek Web Dev **Content:** Irvine, CA-based real estate investment firm Passco Companies has acquired Sea Sound Apartments, a newly constructed 300-unit, Class A multifamily property located in Panama City Beach, FL. Cliff Taylor, Joe Ayers, Paul Berry and Don Hoffman of [CBRE](https://www.cbre.com/) represented the seller, Columbus, GA-based [Flournoy Development](https://flournoycompanies.com/). “Multifamily market fundamentals in the FL Panhandle have never been stronger,” said Ayers. “Since the onset of the pandemic, people from all over the country have been accelerating their plans to relocate to FL’s coastal communities.” Passco Companies‘ new gated property at 10400 Panama City Parkway features four four-story buildings. Sea Sound Apartments residents have convenient access to large brand-name retailers less than one-mile from the property, as well as Breakfast Point Marketplace, a 110,000-square-foot shopping center. Additionally, one of Panama City Beach’s top destinations, the 1.1 million square foot open-air regional lifestyle center Pier Park, is located less than 10 minutes from the property. *Originally published by [Connect](https://www.connectcre.com/stories/passco-companies-acquires-new-300-unit-multifamily-in-panama-city-beach/)[ Media](https://www.connectcre.com/stories/passco-companies-acquires-new-300-unit-multifamily-in-panama-city-beach/).* **Categories:** Passco News --- ### [Passco Ranks Amongst MHN’s 2021 Top Multifamily Property Owners](https://www.passco.com/passco-ranks-amongst-mhns-2021-top-multifamily-property-owners/) **Published:** October 28, 2021 **Author:** Synoptek Web Dev **Content:** **Passco ranks among Multi-Housing News’ Top 40 Multifamily Owners with an average occupancy higher than the national average. To view the full list of rankings, please visit [www.MultiHousingNews.com](https://www.multihousingnews.com/2021-top-multifamily-property-owners/).** Multifamily real estate has remained strong. Despite the setbacks of the past year and a half, the sector began making gains this past summer, both in investment activity and in rent growth. Owners, however, are still feeling the impacts of the pandemic, including eviction moratoria and renter assistance. Meanwhile, they must also grapple with updating their assets to ensure the health and safety of their residents. And, while costs continue to climb, owners are also faced with challenges surrounding rent collections, which fell to 72.0 percent for the week ending in Sept. 6, a 4.4 point decrease from the same time last year. On this year’s ranking of multifamily property owners, Greystar took pole position for the second consecutive year. At the end of June, the company’s 141,500 units were valued at $43.3 billion and located in all regions of the U.S. and a growing number of international markets. Nuveen ranked second, with more than 128,000 units valued at upwards of $25.6 billion. Rounding out the top three was Essex Property Trust, which owns and operates more than 60,000 units primarily located in western coastal markets including San Francisco, Los Angeles and Seattle. This year’s top 40 multifamily owners together boast 1.6 million units, with an estimated value of $358.5 billion. Close to 50 percent of the combined portfolio was classified as market rate, with luxury rentals and affordable housing comprising a respective 14.9 percent and 13.1 percent of the total. Owners are focusing on environmental concerns, with 16 firms reporting that 10 percent or more of their multifamily assets meet green building standards. Occupancy across all asset types was 95.3 percent at the end of June. The 2021 Multi-Housing News Top Owners ranking utilized self-reported data for all firms. The ranking results from a weighted formula based on a variety of factors (only a few of which are specified here), including the number of units owned, owned portfolio value, historic performance and a focused or diversified participation in property sectors. The ranking represents what we feel is a logical balance between firm growth and market share, as well as property diversity. *Originally Published by [Multi-Housing News](https://www.multihousingnews.com/2021-top-multifamily-property-owners/)* **Categories:** Passco News --- ### [Passco Takes Texas Acquisition Strategy Cues from Population Wave](https://www.passco.com/passco-takes-texas-acquisition-strategy-cues-from-population-wave/) **Published:** October 7, 2021 **Author:** Synoptek Web Dev **Content:** Texas household formation has been exceptionally strong in the past year, resulting in performance metrics now sitting at all-time highs. In fact, domestic migration totaled more than 150,000 individuals among the largest Texas metros in the past year, with each metro posting gains of 20,000 to 60,000 people. Bigger picture, recent population estimates from the Census show that Texas grew by 374,000 people. That’s a growth rate of 1.3 percent year-over-year and leads all 50 states. Austin had the biggest population gain at 3 percent, with other large Texas metros following closely behind with solid gains of roughly 1.5 percent. In addition to already strong population growth, Texas also gained a surge of individuals looking to relocate from expensive gateway areas such as New York and California. These coastal households bring typically high incomes and have fueled demand for higher-end luxury stock. “Lower income renters, who might’ve coupled up with roommates or moved back home with parents, are also getting back out into the market and leasing apartments in class-B and -C properties,” says Adam Couch, RealPage market analyst. So it’s no surprise that Passco has surpassed its eighth Texas acquisition, most recently closing the 297-unit Vecina Apartment Villas located at 20915 Wilderness Oaks in San Antonio. This buy comes on the heels of six properties in five different states totaling 1,781 units in the past six months that are now in the Passco coffers. Keanan Gomez, director of acquisitions at Passco, recently discussed the firm’s growth strategy, particularly as it relates to Texas. “We are currently targeting properties located in strong suburban submarkets, supported by higher demographic renters, good schools and a stable housing market where there’s long-term viability to hold value,” Gomez says. “Additionally, the areas in which we’ve had the most success have quick access to the city’s largest employment hubs and the future apartment supply pipeline is in check, meaning there’s not a building on every corner that we have to compete with.” Gomez points to two of Passco’s more recent acquisitions in the Stone Oak submarket in northern San Antonio, which has the highest concentration of affluence and highest-rated schools in the MSA. The aforementioned Vecina Apartment Villas and TruNorth at Bulverde (formerly Lenox Overlook), acquired by Passco in December 2020, have both seen significant rent growth and leasing activity in the past six months as that submarket has stabilized following a wave of new deliveries in 2019 and 2020, he says. According to RealPage research, economic diversity plays a key role in boosting those occupancy levels. Specifically, Texas markets don’t have an emphasis on leisure and hospitality, the employment sectors that often struggle during economic uncertainty. **Occupancy:** As of August, San Antonio occupancy came in 95.9 percent, up 180 basis points year-over-year. Performance in Far North Central San Antonio clocked in at 97.4 percent and ranks first among all metro submarkets. That’s also a 230-basis point increase annually, with each asset class in the submarket posting sizeable gains, says RealPage. **Rent:** Monthly rents in San Antonio are largely affordable by U.S. standards, at an average of $1,136 as of late. Also worth noting is the difference between asset class is among the lowest in the nation. This means renters can easily move up to the higher-end luxury stock without much difficulty, with class-A properties recently yielding the best results. Far North Central San Antonio rents now average $1,389 as of last month, ranking second highest among all metro submarkets, according to RealPage. “Absolutely. The entire state of Texas right now is benefitting from the lower cost of doing business with the affordability of housing relative to other major states,” Gomez says. “San Antonio, DFW, Austin and Houston have all experienced incredible growth; and while Houston suffered a little during COVID, it is now experiencing the strongest absorption and rent growth they’ve seen in 10 years.” With that being said, Gomez points out that most of the deals in Passco’s portfolio are 96 percent occupied. Without concessions for a couple months, it feels like the market has evened out, he says. “Deals that are finishing their lease-up are burning off concessions a lot faster than you would historically,” Gomez says. “I’m a big fan of the Texas market and I think there are still a lot of deals to be had.” **Some takeaways\*:** - DFW, Austin and Houston continue to rank among the top 10 markets for apartment construction in the nation - Construction levels continue easing after a surge in the middle part of the 2010s decade - Expectations are that performance in the next year or two will return to a long-term average *\*RealPage research* *Originally published by [Connect CRE Texas](https://www.connectcre.com/stories/passco-takes-texas-acquisition-strategy-cues-from-population-wave/?utm_medium=email&_hsmi=168414871&utm_content=168414871&utm_source=hs_email)* **Categories:** Passco News --- ### [ADISA Announces Award Winners for 2020 and 2021](https://www.passco.com/adisa-announces-award-winners-for-2020-and-2021/) **Published:** October 5, 2021 **Author:** Synoptek Web Dev **Content:** ADISA announces winners of its ACE, Distinguished Service and President’s Awards for 2020 and 2021. Congratulations to the winners of ADISA’s 2020 and 2021 A Champion of Excellence (ACE), Distinguished Service and President’s awards. The awards were presented during the welcoming ceremony last night at Annual Conference & Trade Show at the Wynn Las Vegas. The ACE Award is the highest honor bestowed on a member by ADISA. Recipients of this award have reached a pinnacle in their career and have brought credit to themselves and ADISA through distinguished accomplishments. The 2020 ACE Award was presented to Kevin Gannon, chairman and chief executive officer of Robert A. Stanger & Company, Inc. The 2021 ACE Award was presented to Bill Passo, chief executive officer and founder of Passco Companies. The Distinguished Service Award is presented to individuals and companies who have provided exceptional service to ADISA, the alternative investments industry and the overall community. The 2020 award was distributed to Sherri Cooke, senior vice president, business development of iCapital Network. This year’s Distinguished Service award was presented to Ann Moore, chief business development officer, International Assets Advisory, and Angela Barbera, managing director, national accounts of NexPoint. The President’s Award is given to an individual or organization that has made outstanding contributions in their chosen field by service in local, state, or national affairs, or in support of the advancement and continued excellence of ADISA. The 2020 President’s Award was presented to Tanisha Bibbs, CMP, CEM, director of event planning of ADISA. Snyder Kearney, an independently owned and managed law firm that provides due diligence services to broker-dealers and registered investment advisors, was awarded the 2021 President’s Award. “ADISA is proud to honor the recipients of this year’s awards as well as last year’s awards,” said ADISA Executive Director John Harrison. “Each of these recipients serve as premier examples of the ideal industry professional and are stewards of the growth and advancement of the alternative and direct investment space.” *Originally published by [ADISA](https://www.adisa.org/news-advocacy/article/adisa-announces-award-winners-for-2020-and-2021).* **Categories:** Passco News --- ### [Stacy Stemen Featured on 2021 Multifamily Women® Summit Podcast](https://www.passco.com/stacy-stemen-featured-on-2021-multifamily-women-summit-podcast/) **Published:** October 1, 2021 **Author:** Synoptek Web Dev **Content:** To listen to the full Podcast, please visit [www.multifamilywomen.com](https://multifamilywomen.com/give-a-damn/). The future is bright in Multifamily for people that give a damn. Good leadership is about developing strong relationships, supporting and developing other leaders. Stacy Stemen and Sarah Saglam highlight those who really care, are engaged, are involved, and how they manage their daily duties to stay so involved. Carrie Antrim, the Chief Operating Officer of Multifamily Leadership and Co-Founder of Multifamily Women®, kicked off Day 2 of the Multifamily Women® Summit by inviting Sarah Saglam and Stacy Stemen to discuss what sort of things they truly care about. Sarah Saglam is the Senior Vice President of Marketing and Sales Operations at LeaseHawk. Stacy Stemen is the Senior Vice President of Corporate Marketing and Development with a real estate investment company called Passco. Both are extremely focused on relationships and creating a sense of family within the office. The three are dressed in matching shirts that read in a graceful yet playful font, “I give a damn.” The word “damn” is underlined. The font and design match the lettering used as a centerpiece for the summit, with the words “Multifamily Women” hanging overhead between the chairs when the presenters sat. Antrim starts the discussion by getting right to the point: “We’re talking about giving a damn. What does that mean?” For Sarah Saglam, giving a damn means being passionate about the people you work with, the things you work for, and creating a culture of kindness. That requires recognizing milestones and being aware of what people are going through. Something as simple as a sticky-note showing your appreciation for someone can make a huge difference in someone’s day. You often spend more time with your work family than you do with your own spouse or children, so you should celebrate those relationships. Do things to lift each other’s spirits and support one another. “It’s a very competitive market right now, so the more things you can do to create a culture of kindness and a feeling of family will really resonate in retaining and attracting talent,” Saglam explained. Stacy Stemen says passion is the most important element of all this. It requires you to go outside the box, go beyond the norm, and create a powerful energy that people want to be around. Stemen says that needs to start from Day 1, and that you should always be welcoming and encouraging toward your teammates. Having an attitude like that helps people to be happier in the office, which makes them more excited about work and therefore more likely to stay with the company for a longer period of time. There are all sorts of ways to do that. Passco, for instance, has charity drives that give money to organizations chosen by people within the company and engages their employees with charity walks or runs. Things like that can make people feel bigger than themselves, as well as making people feel closer. A plus from that, Saglam says, is that people are more likely to buy from or contract with companies that are involved with nonprofits. Stemen says she gives a damn about giving back to the community. “It’s just important that you make yourself stand out. Everybody can be the norm. I live by a saying: ‘Live beyond your desk.’ You may be given a job – you may be in accounting, you might be in acquisitions, but do more than that. Get to know other departments. Get to know what they do so you can broaden your horizons and actually go and do a bunch of different jobs.” Stemen says there’s a difference between a sponsor and a mentor, but both are necessary in every industry. “When I think of a mentor, I think of somebody that is educating and training somebody maybe within your specific field. Whether it’s marketing, acquisitions, it’s someone you can look up to and actually feed off of their knowledge. You maybe have a call with them a week or a month, maybe go to lunch and do all that kind of stuff. Mentorship is definitely needed,” Stemen says, and brings up that her mentee was present in the audience during the presentation. “A sponsor, on the other hand, is somebody that’s out there promoting you when you’re not around. We’re here sitting here talking about people in this industry and they don’t even know it,” Stemen explains. “There’s sponsors that sponsor the event, but then you’re sponsoring an individual.” Saglam adds that being accessible to people in the workplace so that you’re available if someone needs to talk is important. You should offer yourself as a resource and support others. Stemen builds on that, suggesting you build groups within larger groups to build your network and knowledge base. For instance, she has a group that gets together monthly to brainstorm ideas, consider what conferences or meetings to attend, and feeds off each other’s energy. Stemen says telling people something isn’t your job is limiting. By doing other jobs, you can find what you’re passionate about. Antrim takes a pause to hand out cards that look similar to name tags, but instead say, “I give a damn about” with a blank space for people to fill out. They’re handed out amongst the crowd, inviting people to reflect on their values and their focus. Then, she uses that time to pivot the conversation. “I also wanted to touch on when you can tell – when you just know that someone in the organization doesn’t give a damn, and managing that, whatever it is,” said Antrim. “Either transition into a different position that maybe gets them fired up, or transitioning out, a different career path. How do you guys manage that type of – at least for me, it’s a little more difficult. I’m not one to have those types of conversations. How do you do that but maintain the relationship?” Saglam says being aware and noticing that person is struggling, and not being afraid to have a conversation about it is helpful. Often, people are going through something in their personal lives that’s distracting them. It’s all about communication, but the key is to go into the conversation with the right mindset. You should also try to meet them on their terms. For instance, if they’re a quiet person, they might not be comfortable talking in a large group. So instead, you could send them a note asking them to catch up, or invite them to lunch. That doesn’t have to come from a manager; anyone reaching out and showing they care is a good place to start. “Finding your advocate in the company, I think is big,” said Stemen. “That way, you become their confidante and you become that person who they come to and you can be the voice. This actually gives you more power, going and speaking to these executives and really understanding what the company is going through.” A common problem, Stemen says, is that people feel overworked, underpaid, or underappreciated. Those feelings can be exacerbated if certain employees’ bosses treat them differently than people in other departments are treated. “If you’re in a company where you don’t believe in the culture, something has to change,” Stemen says. She encourages you to be that change. Stemen brought a book called “The Power of Moments” by Chip and Dan Heath. They go over “Why certain experiences have extraordinary impact.” An example Stemen liked in the book is a Popsicle Hotline at the Magic Castle Hotel in Los Angeles. You pick up the phone and someone brings you a popsicle, delivered on a silver platter. Stemen says that’s a perfect example of thinking outside the box to create something that will make people happy in an unforgettable way. “I think everybody should have a Popsicle Hotline. Make it something cool that people will remember. It’s those moments that stand out.” Both Stemen and Saglam’s companies have something similar that’s meant to lighten the mood. Passco has breaks where the boss will pay for cookies and whatever else employees have their eyes on; Lease Hawk does impromptu ice cream parties. “It’s something to take your mind off everything that’s going on,” said Saglam. “And then we start talking. It just creates some fun.” Saglam points out that it’s always important to celebrate milestones, but it’s just as important to celebrate tiny moments. That can change your view of the workday and make you more invested in the workplace and your work family. Antrim invited everyone from the audience – either in-person or watching the stream of the conference remotely – to share their own perspectives. Some people had questions, others had bits of wisdom they hoped to share that they believed others might benefit from. Saglam and Stemen offered free “Give a Damn” books or shirts to anyone from the crowd who participated in a discussion. A woman named Teresa from the crowd at the summit had a question for the presenters. On a badge handed out during the conference where people were told to write what they give a damn about, Teresa wrote “inclusion and diversity.” Teresa asked, “What are some ideas or some things you’ve done to create culture when your team is not in the same place or the same office?” Saglam suggests having a name for the team, which makes people more excited about the unit they’re part of. Then, have regular meetings with that team. Start those meetings off by talking about three good things that happened in the past day, which encourages people to have an attitude of gratitude. A woman named Rebecca, who works with Chadwell Supply, says she sent a hand-written encouragement card to each employee and mailed them out, since the team is spread out across the country. She says it made a huge difference. “We have the Amazon Business Incentives Program,” said Stemen. “So we will send gift cards out to our teams. I also made a partnership with Uber Eats. If we’re going to have our monthly call, we’ll send out gift cards to them to let them know we’re thinking of them.” Stemen says it can be hard to spread the company culture across the country and keep people engaged even if they aren’t in the same office. She says it’s important to take the time to ask people what they want. Thinking outside the box to create events where you can bring people together is great, and you can often get them sponsored by other companies. In the crowd, Stephanie from Leonardo 24/7 says they find out what sort of music people like and create a playlist that they’ll turn on as they’re working. “It’s a neat way to create a moment that carries on.” A woman named Tina texted in saying they do virtual tailgates with contests throughout. Jules in the crowd said that she’s in a male dominated-company. “In our organization, we don’t have a Women’s Leadership Council. So myself and an attorney and a VP, who is the most powerful woman at our company, are creating one. We’re just in the beginning stages. So I want some solid advice from y’all on what we should do.” Stemen says coming to the event she’s attending is a good first step. You could also bring in speakers or go to other conferences together to further their education on how to become better leaders. You just have to make sure you have the support from your executives. “You’re going to see things evolve. The company culture will start changing, and people will notice from the outside. They’re going to start talking about you and go, ‘I want to work for that company. I see myself fitting in here.’ That’s who you want to be in this industry,” said Stemen. Linda, an audience member, works with Saglam. She says a thing that was fun for her was the invitation to bring their pets to their virtual meetings. “It created a fun way for us to get to know one another.” Kristina with Trust Hub said from the crowd that she mails everyone on her team a cute purse, wallet, or lanyard. She’s into pump-up songs as well. At the end of the day, rather than asking what each person did, she asks, “How did your day go? Is there anything you need from me?” That creates a personal connection and makes sure you aren’t micro-managing but can still get questions answered about work. Saglam says those check-ins that aren’t totally focused on work are a great idea. It breaks the ice and gives a new way to connect. Brooke, a woman from the audience who works with The Management Group, says any time there’s a death in the family (human or animal) they send a peace lily. She says that surprises people and creates a good moment in a hard time. They also do weekly maintenance meetings and make sure the refrigerators are stocked with beverages – small things that make a big difference. During the pandemic, Brooke started a women’s leadership group, where people were allowed to pick bracelets from the Little Words Project. They have small messages, and once you feel the message has been spoken to you, you can pass it on. Kim Cross says her team is remote as well, but sends gifts out twice a year. For Christmas, she sent small gifts and had a virtual party where they played music and opened their presents and cards. She wants people to understand that the team comes first. Tracy with Watch Tower Security started a monthly lunch where people from the industry can meet up and form connections. Paula from the crowd has monthly dinners with other women from the industry in Atlanta. “It’s amazing, because we get to share our challenges. We get to share our good news, bad news, and also during the pandemic we did it virtually.” Stemen says after hearing all the input from the audience, she wants to go back to her company and do a personal survey trying to find out what makes everyone tick. That way, you can tailor certain things you do for that person in the future. Stemen is trying to start up something called Living with a Purpose, where people are encouraged to help with charities or individual causes. Rather than having floors be named A, B, C, she has her leasing agents tell people specific stories about floors and launch community events with each center. Originally Published by [Multifamily Women®](https://multifamilywomen.com/give-a-damn/). **Categories:** Passco News --- ### [Passco Companies Acquires $445.7M in Multifamily Assets in First Half of 2021](https://www.passco.com/passco-companies-acquires-445-7m-in-multifamily-assets-in-first-half-of-2021/) **Published:** August 20, 2021 **Author:** Synoptek Web Dev **Content:** With its most recent multifamily purchase, the $69 million acquisition of the 248-unit The Harrison at Braselton community in Buford, Georgia, Passco Cos. has purchased nearly $445.7 million in multifamily assets through June. This puts the real estate company on track to meet a company record of $1 billion in acquisitions this year, according to president Larry Sullivan. “The Harrison at Braselton is located in Hall County, Georgia, which has seen a steady influx of thousands of residents per year, leading to a nearly 15% population growth rate over the last decade,” says Keanan Gomez, director of acquisitions at Passco. “The local economy has also been bolstered by robust business growth, particularly in the health care and manufacturing industries. In line with our typical strategy, we acquired the 2019-built property right out of lease-up at 100% occupancy with a waitlist.” Including The Harrison at Baselton, Passco’s acquisitions over the past six months encompass six properties across five states, totaling 1,781 units: - Mill at New Holland, a 284-unit community in Gainesville, Georgia; - The PARQ at Chesterfield, a 345-unit community in Chesterfield, Missouri; - The Fitzroy at Chenal, a 294-unit community in Little Rock, Arkansas; - Altis Promenade, a 338-unit community in Tampa, Florida; and - The Collins, a 272-unit community in Covington, Louisiana. - The firm has maintained its disposition pipeline over the same period; since inception, Passco has sold a total of 102 assets. Multifamily Executive spoke to Sullivan about the company’s strategy, acquisition goals, and the changes made in response to the COVID-19 pandemic. **MFE:** How have Passco’s transaction relationships in local markets acted to its benefit in 2021? **Sullivan:** It’s part of the result of a long-term strategy, which we started in 2006. We made the strategic decision that we wanted to be in certain parts of the country. \[For example\], we really like the Southeast for its economics and sociodemographics. We thought it would be a good place to be for our investors, and part of that strategy was hiring people that were of that area for our acquisition groups. Regardless of where the markets go, because they’ve been a lot different between 2006, 2010, 2015, and 2021, if you can build bridges with people you are just so much better off. It doesn’t guarantee success, but there are numerous times where relationships have delivered property—even if it’s building relationships with merchant builders when they build projects. And when it comes time to select a buyer, you end up in a good position. So that helps in 2021, where you’ve got such an intensely marketed asset desirability, multifamily, and definitely more buyers than sellers. So every advantage you can get certainly helps. **MFE:** Passco’s goal is to do $1 billion in new acquisitions in 2021. How do you plan to achieve that goal? **Sullivan:** We’re on target. We’ve still got four months to go, but that’s a long journey in real estate. Most of the activity happens in the last quarter, all the time. But we’re sitting at over $700 million right now in controlled or closed. So if we can find another $300 million by year-end, we can get to a goal we’ve long sought for. We have a chance, we have a good opportunity. \[To achieve that goal\], we’re going to build on where we’re at today, which is the $700 million. Most of the assets we buy, I would say the average value is $70 million per asset, so they’re not small assets. So we’re looking to buy another four before year-end. We certainly have more than four that we’re looking at. Like everything in life, until you’re successful and you have a contract and ultimately you’ve closed, you can’t put certainty on it. It isn’t over until it’s over. **MFE:** How has Passco responded to the COVID-19 pandemic? How has that affected your process and strategies? **Sullivan:** When COVID shutdowns came to the fore on March 16, \[2020\], it was the first time it had happened in history and there was no road map. So between March 16 and March 31, we looked at it and we said, okay, we have a problem, \[and\] there’s two actions we have to take through COVID. One is just getting through the day-today unknown. And the other decision we made was that COVID would pass, and what could we do during COVID that could help us on the flipside? So just a couple of examples. One is, between March 16 and the 31, we designed an entire program called CoronAid. It was a financial assistance program for every tenant we had in the U.S., because we figured that people would be fearful, losing jobs, closing down, worried about their home. And so we actually had complete programs set up in that timespan, so that on April 1 it was sitting on every desk in every property across the U.S. And believe me, people came in. We took a risk. We had a lot of two-week deferrals, we got behind on our investor dates. We did that because it was the right thing to do, and because we felt that by doing the right thing, when we came through COVID, the reputation of the property should go off the chart. And hopefully they’ll remember the property that did this. We also went, in 12 days, from on-site leasing to pure remote leasing. We shifted all the staff, and we revamped the entire way we leased at the property. We were fortuitous that in January we started a new segment of our asset management group called Operational Assessment, where we could streamline operations and assess what we needed and where we were spending money. When COVID hit, we already had a group that could streamline operations, just now under duress. It helped us move the economics of the property around much more rapidly. *Originally published by [Multifamily Executive](https://www.multifamilyexecutive.com/property-management/apartment-trends/passco-companies-acquires-445-7m-in-multifamily-assets-in-first-half-of-2021_o)* **Categories:** Passco News --- ### [California Real Estate Firm Passco Buys Chesterfield Apartments for $98M](https://www.passco.com/california-real-estate-firm-passco-buys-chesterfield-apartments-for-98m/) **Published:** June 7, 2021 **Author:** Synoptek Web Dev **Content:** A California real estate firm has acquired a 345-unit luxury apartment complex in Chesterfield, paying nearly $100 million to acquire the property. Passco Cos. said Monday it has acquired the Watermark at Chesterfield Village apartment complex at 16300 Lydia Hill Drive for $98 million. The seller was Indianapolis-based Watermark Residential, which developed the multifamily property. As part of its purchase, Passco plans to rebrand the Class A apartments as The PARQ at Chesterfield. Based in Irvine, California, Passco Cos. develops, acquires and manages multifamily and commercial real estate and has $3.4 billion in assets under management in the U.S. The firm said its purchase of the Chesterfield apartment complex follows its strategy of seeking out properties in attractive suburban markets. “The PARQ at Chesterfield is the first new multifamily community built in the submarket in more than 30 years, and the property’s success during lease-up demonstrates the pent-up demand for luxury rental units in the market,” Keanan Gomez, director of acquisitions at Passco Cos., said in a statement. “We quickly recognized the opportunity to acquire a superb asset in a market that is experiencing significant growth in white-collar employment, including more than 7,000 jobs within a 5-mile radius of the property.” The PARQ at Chesterfield includes one-, two- and three-bedroom apartments. Its amenities include a fitness center, pool, a dog wash, coffee bar and courtyards. Watermark Residential developed the apartments and spent about $75 million in acquisition and development costs for the project. The first residents moved into the apartment complex in 2019. “Watermark Residential has constructed a phenomenal asset that does not miss a beat, meeting and exceeding today’s design and amenity expectations for luxury, Class A communities,” Gomez said. The Chesterfield/Ballwin/Wildwood multifamily submarket yielded average monthly rents of $1,102 in the first quarter, according to Berkadia. Apartment occupancy within the submarket in the first quarter was 95.9%, above the St. Louis region’s overall occupancy rate of 94.8%. *Originally published on [St. Louis Business Journal](https://www.bizjournals.com/stlouis/news/2021/06/07/california-firm-buys-chesterfield-apartments.html)* **Categories:** Passco News --- ### [Cushman & Wakefield Arranges $64.75 Million Sale on Behalf of Passco Companies](https://www.passco.com/cushman-wakefield-arranges-64-75-million-sale-on-behalf-of-passco-companies/) **Published:** May 17, 2021 **Author:** Synoptek Web Dev **Content:** Cushman & Wakefield announced that the commercial real estate services firm has arranged the $64.75 million sale of Twenty25 Barrett, a 238-unit apartment community located in Kennesaw, Georgia, a suburb northwest of Atlanta. Mike Kemether, Robert Stickel and Alex Brown of Cushman & Wakefield represented the seller, Passco Companies, in the transaction. Forum Investment Group, private real estate investment firm with expertise and an emphasis on multifamily housing, acquired the property. “Passco did a fantastic job of identifying this institutionally designed and developed investment in 2014 and had the proper asset management plan to help it be a strong performer within their portfolio,” Kemether said. “Along with excellent property management from Fogelman, the property provided durable cash flow and solid rent growth. Forum continues to grow their portfolio with targeted markets throughout the country and a strong focus in the Sunbelt.” Located at 2025 Barrett Lakes Boulevard, the property was 95 percent leased at the time of the sale. Amenities include an internet café, dog park/play area, fitness center with yoga studio, lake views, a pet spa/grooming station, a resident business center and resort-style pool. “Forum is an active and experienced investor who has wisely begun transitioning their portfolio from older value-add assets to newer-built core-plus strategies,” Stickel said. “They targeted Kennesaw for its high-quality demographics and long-term growth projections. Passco remains active nationally, specifically in the Sunbelt.” Cushman & Wakefield’s Sunbelt Multifamily Advisory Group ranks No. 1 in Sunbelt market share based on over 250 transactions and $6.2 billion in multifamily and land investment sales in 2020 (Source: Real Capital Analytics). Market share reflects number of sales for Alabama, Arkansas, Northwest Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Texas. *Originally published by [Yield Pro](https://yieldpro.com/2021/05/cushman-wakefield-arranges-64-75-million-sale-on-behalf-of-passco-companies/)* **Categories:** Passco News --- ### [Passco Companies, Kendra Scott Team Up for Move for Hunger](https://www.passco.com/passco-companies-kendra-scott-team-up-for-move-for-hunger/) **Published:** April 27, 2021 **Author:** Synoptek Web Dev **Content:** Six years ago, Passco Companies LLC launched its charitable giving program “Passco Gives Back” to empower its employees to support worthwhile organizations. This program has even inspired individuals to get involved by donating time, and at least five of Passco’s employees sit on the board of a nonprofit organization. Since the launch of Passco Gives Back in 2015, the firm has supported more than 30 nonprofit organizations both locally and nationally including The Literacy Project, OC Support our Troops Semper Fi Fund, Human Options, Orangewood Foundation, Cystic Fibrosis Foundation and Move For Hunger. Move for Hunger is a nonprofit organization that mobilizes the relocation industry to reduce food waste and fight hunger. Passco’s partnership with Move For Hunger allows Passco multifamily properties in 17 states to get involved in this charitable giving program. In 2019, Stacy Stemen, senior vice president of corporate marketing and development at Passco, and her team started the initiative to help Move For Hunger raise awareness and help stop hunger. Passco enrolled 25 of its apartment communities in the program, providing food collection bags, transportation resources, marketing materials and the means to help stop hunger. “Passco rolled this out at several of our properties years ago and saw the impact it had on local food banks throughout the nation,” Stemen says. “My hope is that this campaign brings awareness to other apartment owners and managers, and they see the importance of supporting Move For Hunger and Giving Back within their local communities. 2020 was an extremely tough year and being able to help feed those in need is something we can all help with.” Passco’s latest initiative partners with designer Kendra Scott of the fashion world to donate a portion of proceeds from sales to the Move For Hunger cause. During an upcoming online and in-store event, 20 percent of sale proceeds will benefit Move For Hunger. “As an existing partner with Move For Hunger, we understand the need that exists throughout the nation, the need to stop hunger. This partnership between Passco, Move For Hunger and Kendra Scott evolved from an idea I had that flourished into this nationwide campaign,” Stemens says. “It is our hope that other apartment owners and managers follow suit, and roll this program out at their communities. We can all make a difference one community at a time. Let’s Shop to Stop Hunger.” To participate, visit kendrascott.com on April 29 or April 30 and enter code GIVEBACK-1HYJ at checkout. The giveback code must be entered at checkout in order to donate 20 percent back. Join the in-store event at Kendra Scott on April 29 from 5:00 to 7:00 p.m. to benefit Move For Hunger. Shoppers must mention Move For Hunger or Passco at checkout so 20 percent of the proceeds will go back to the organization. Sales taking place during that two-hour timeframe at The Mall at Millenia, 4200 Conroy Rd. M-221, Orlando, FL or at North Hills Mall, 4321 Lassiter at North Hills Ave., suite F100, Raleigh, NC will benefit Move For Hunger. *Originally published on [ConnectCRE.com](https://www.connectcre.com/california/passco-companies-kendra-scott-team-up-for-move-for-hunger/?utm_campaign=Connect+CRE+News%3A+National&utm_medium=email&_hsmi=123745395&utm_content=123745395&utm_source=hs_email)* **Categories:** Passco News --- ### [Lenox Overlook Luxury Apartment Complex Gets New Name, New Owners](https://www.passco.com/lenox-overlook-luxury-apartment-complex-gets-new-name-new-owners/) **Published:** December 28, 2020 **Author:** Synoptek Web Dev **Content:** A California-based real estate company acquired a luxury apartment community in San Antonio along Loop 1604, marking the eighth property it owns in Texas. As part of the deal, Passco Cos. — headquartered in Irvine, California — will rename the 338-unit Lenox Overlook at 17715 Overlook Loop to TruNorth at Bulverde. The apartment complex includes one-, two- and three-bedroom apartments and townhomes averaging 861 square feet in size, with amenities such as a pool, indoor and outdoor fitness centers, a business center and a clubhouse. It is just north of H-E-B’s 117,000-square-foot Bulverde store, which opened in 2017. Passco bought the property from Austin-based development group Oden Hughes LLC, which completed the property last year. “TruNorth at Bulverde leased up in just 10 months, which speaks to the exceptional strength of the asset’s amenities and location,” Gary Goodman, senior vice president of acquisitions for Passco, said in a news release. The 14-plus-acre property was last assessed at $43.2 million, according to the Bexar County Appraisal District. Patton Jones of Newmark Group Inc. represented Passco, while Caleb Marten of KeyBank Real Estate Capital arranged financing. “Lenox Overlook presented a unique opportunity to acquire a new, luxury community in an excellent suburban location surrounded by some of the most affluent demographics in the city,” Jones said in the release. “The property’s excellent build quality and its positioning near Class A retail and entertainment will ensure Lenox Overlook as a mainstay in the north central San Antonio submarket.” Passco also owns Tribute at the Rim in San Antonio and Lakeview Villas in New Braunfels. *Originally published by [San Antonio Business Journal](https://www.bizjournals.com/sanantonio/news/2020/12/28/luxury-apartment-complex-gets-new-name-new-owners.html)* **Categories:** Passco News --- ### [Apartment Deals Surge Throughout the Gulf Coast](https://www.passco.com/apartment-deals-surge-throughout-the-gulf-coast/) **Published:** November 27, 2020 **Author:** Synoptek Web Dev **Content:** Apartment deals took a hit throughout Florida this past summer, as COVID-19 fueled uncertainty and caused financing to pull back on commitments. But since the start of October, multifamily rental transactions throughout Central and Southwest Florida have roared back — so much so that deal volume could eclipse the final three months of 2019. Since Oct. 1, more than 3,000 apartment units have traded hands throughout the Gulf Coast, an analysis of transactions shows, with more than $400 million being invested. “The market here is definitely outpacing national trendlines,” says Nancy Surak, managing broker and senior land advisor at Land Advisors Organization Tampa Bay. “Since March, the Tampa Bay area is the number one region in the U.S. for residential demand.” She notes, too, that in the third quarter of this year, apartment leasing in Tampa Bay grew by 22% over the comparable period in 2019, further spurring sales. The apartment deals regionally have occurred despite, or perhaps because of, widespread fears throughout many places in the U.S. that a pending end to eviction moratoriums and falling rent collections could erode values and sales momentum. Along the Gulf Coast, however, landlords and apartment brokers say population in-migration from the Northeast, together with steady rent collections, have allowed the sector to remain resilient here. “There’s so much pent-up demand for capital to be put out,” says Colin Gillis, vice president of acquisitions for California-based Passco Cos., which last month acquired the 341-unit Tapestry Cypress Creek in Land O’ Lakes for $76.4 million. “I’ve never seen terms like are out there now, with five-day due diligence periods and the like,” adds Gillis, who has acquired a handful of multifamily rental properties throughout the Gulf Coast, in Sarasota, Bradenton, Tampa and elsewhere. “People are antsy, and I think that’s playing a major role,” Gillis says. “Interest rates are also at such a low point, and Florida is still a Top Five growth state. Investors look at the market and say that while certain properties or pockets may have issues, they’ll be short term and they’ll get through it.” Tapestry Cypress Creek, for instance, is 95% leased and rent collections have remained solid despite the pandemic. Stoneweg US, a St. Petersburg multifamily investor that earlier this month spent $114 million — the largest amount on a single transaction in its five-year history — to acquire the 688-unit Trellis at the Lakes property, in St. Petersburg, says that especially suburban apartments have remained a solid investment despite the health crisis. “If anything, COVID-19 has taught us that multifamily rentals are one of the safest real estate sectors one can be in,” says Ryan Reyes, Stoneweg US’s chief investment officer. “Our rent collections have proven to be resilient — they haven’t dropped below 95% or 96% throughout the crisis,” Reyes adds. “I think that boils down to the fact that people need a place to live, and they value consistency in where they live and the fact that we offer affordable places to live as a company.” And while many of the multifamily rental deals — such as General Services Corp.’s $66 million acquisition of the 274-unit Allure at Gateway community in Pinellas Park and Lindy Communities’ purchase of the 252-unit Iris at Northpointe project in Lutz for $51.75 million — have been clustered around Tampa Bay’s fast-growing population centers, the entire region has seen increased activity. In Southwest Florida, for instance, GMF Capital earlier this month bought the 200-unit Wild Pines of Naples complex, for $25.4 million, and Pedcor Homes Corp. acquired the 188-unit Naples 701 community, also in Naples, for $24 million. “The buyer recognized that the dynamic location and the lack of workforce housing in the area will keep the property producing excellent returns for years to come,” says Darron Kattan, managing director of multifamily investment sales for Tampa-based commercial real estate brokerage firm Franklin Street, whose team sold Wild Pines. Interestingly, unlike recent years in which high-profile, urban residential towers traded at top-dollar prices — think deals such as last year’s $131.5 million trade of the luxury 21-story Icon Harbour Island tower in downtown Tampa — most of the recent sales have involved stabilized, suburban properties. Nick Meoli, an executive managing director for commercial real estate brokerage firm Cushman & Wakefield, in Tampa, says COVID-19 has had a minimal impact on occupancy because of the influx of new residents from out of state. “Occupancy has not changed very much since COVID-19 struck,” says Meoli. “And most properties are performing well, with 96% to 98% rent collection rates. That, as a result, has meant there’s been very little bad debt that’s accrued across the sector.” Moreover, thousands of new units are being readied to come on the market through new construction throughout the entire region, meaning the sales cycle will likely continue well into 2021. In downtown Tampa, for instance, Strategic Property Partners is building a new 420-unit apartment project at 815 Water Street, within the $3 billion Water Street Tampa neighborhood. In Sarasota, Belpointe REIT Inc. is slated to take advantage of a federally designated Opportunity Zone by delivering 418 apartments in pair of buildings that will replace much of the Main Plaza office and retail complex downtown. And in Pinellas Park, Birmingham, Ala.-based LIV Development recently acquired nearly 20 acres for $9.3 million, where it will develop a new 349-unit complex. “There were 4,000 new units delivered this year in the region, and vacancy rates remain largely unchanged,” Surak says. “That tells us that we’re not overbuilding, that there’s still strong demand. As a region, we’re definitely bucking the trends in multifamily. Tampa is finally hitting its stride.” *Originally published on [BusinessObserver.com](https://www.businessobserverfl.com/article/apartment-deals-surge-throughout-the-gulf-coast-nancy-surak-land-advisors-colin-gillis-passco-cos-stoneweg-ryan-reyes-nick-meoli-cushman-and-wakefield)* **Categories:** Passco News --- ### [Passco Adds Three Communities to Its Portfolio](https://www.passco.com/passco-adds-three-communities-to-its-portfolio/) **Published:** November 13, 2020 **Author:** Synoptek Web Dev **Content:** While the COVID-19 pandemic has created challenges for multifamily acquisitions, including increased scrutiny, Southern California-based Passco Cos. continues to seek out opportunities in top markets. It has added three multifamily communities to its portfolio within two months. “We’ve had to readjust due diligence and drill in from a desktop perspective instead of a swat team on-site picking it apart,” says Colin Gillis, vice president of acquisitions based in the Atlanta office. While things were quiet on the acquisition front in the spring when lockdowns were happening nationwide, Gillis says it felt more like a typical year in June to September. “Activity in the third quarter was in line with where it’s been in past years. As we turn the corner, however, we’re finding that opportunities have fallen off dramatically below historical norms \[in the fourth quarter\],” he adds. The firm, which has over 14,000 units across 45 multifamily communities in 15 states, typically averages eight to 10 acquisitions annually. The pandemic has definitely slowed this year’s pace. It hopes to do $150 million more in acquisition activity by the end of the year, reaching $425 million, down from $750 million in 2019. “Everyone was nervous about rent collection as a total percentage of billable rent. But month after month, collection numbers for the majority of marketable assets have been really strong, which has given confidence to sellers to sell. As of the beginning of November, unit rent collections have averaged [80.4% nationally](https://www.nmhc.org/research-insight/nmhc-rent-payment-tracker/),” says Gillis. “Within our portfolio, we are seeing greater percentages and a rapid increase in collections. Passco has gone from 86.52% of unit collections up to 92.65% just within the first half of November. These percentages, coupled with the lowest interest rates I’ve seen in my career, proves it’s an opportune time to sell if renters are paying rent and if the properties have truly stabilized.” Passco generally buys assets coming out of lease-up in the Southeast, Sun Belt, Mid-Atlantic, and Texas—markets that are seeing population growth and a low cost of living. “Our goal is to buy the most deals that we can that make sense for our structure and portfolio,” he says. “We try to buy unique and differentiated projects.” Earlier this month, the firm acquired Tapestry Cypress Creek, a 341-unit luxury apartment community in Tampa, Florida’s East Pasco County submarket for approximately $76.4 million. This is Passco’s first acquisition in Pasco County, a high-growth submarket that’s a 20-minute drive to downtown Tampa. Gillis says it was a rare opportunity to acquire a newly constructed luxury asset that has seen exceptional demand since completed in 2019. According to the firm, it was able to acquire the property based on a longtime relationship with the seller, Arlington Properties. “Tapestry experienced a 15-month lease-up, which is extremely impressive for an asset of its size,” he says. “The population growth within 3 miles of the asset has been nearly 30% since 2019, twice the rate of the Tampa MSA as a whole.” This acquisition follows on the heels of two other communities purchased earlier this fall: One Hampton Lake in Bluffton, South Carolina, and The Preserve at Catons Crossing in Woodbridge, Virginia. One Hampton Lake, a 330-unit Class A community built in 2018 with a Phase II expansion completed this year, was acquired from Southeastern Co. for $78 million in an off-market transaction. Passco credits being able to source the best-in-market asset and a seamless transaction to its established relationship with the seller. Gillis adds that Bluffton was recently named the fastest-growing town in South Carolina, with an influx in retirees with stable incomes. One Hampton Lake has an average household income of $115,000 and has maintained high occupancy and leasing momentum during the COVID-19 pandemic. The Preserve at Catons is a 200-unit, mid-rise apartment community in Northern Virginia. The asset, which was built in 2010 and well maintained under previous ownership, also has a strong track record and is in a submarket that has no multifamily development in the pipeline despite demand drivers for further growth. It was the firm’s first acquisition from Fairfield Residential. Passco also prioritizes giving operations enough latitude to operate the acquired communities successfully. “We try to be diligent and understand every parcel of land, such as what could impact the pipeline,” Gillis says. “We make sure we have appropriately set aside the resources for our investment management team to operate the properties competitively.” *Originally published on [MultifamilyExecutive.com](https://www.multifamilyexecutive.com/business-finance/passco-adds-three-communities-to-its-portfolio_o)* **Categories:** Passco News --- ### [Passco Acquires 200-unit Community in Northern Virginia](https://www.passco.com/passco-acquires-200-unit-community-in-northern-virginia/) **Published:** September 23, 2020 **Author:** Synoptek Web Dev **Content:** Passco Cos. has acquired The Preserve at Catons Crossing, a 200-unit, mid-rise apartment community in the Northern Virginia submarket of Woodbridge, Va. “This opportunity to acquire this solid core asset in a stabilized, supply-constrained market is perfectly aligned with our multifamily investment strategy,” said Gary Goodman, the firm’s senior vice president of acquisitions. “With no competing properties under construction nor in lease-up, we anticipate healthy, sustained resident demand.” The acquisition comes on the heels of the firm’s purchase of One Hampton Lake, a 330-unit multifamily community in South Carolina, earlier this month. Goodman explains that the asset, which has maintained an occupancy rate of 95 percent and higher throughout the pandemic, will benefit from a diverse and growing job market. “The Preserve is located immediately adjacent to a state-of-the-art, 240,000-square-foot Kaiser Permanente medical center currently under development, which will provide a solid resident base,” says Goodman, who notes that the facility, planned to be completed next year, is anticipated to support approximately 450 employees. “Further, the apartment community is within a 30-minute commute of Amazon’s HQ2 development in National Landing, which will not only bring thousands of jobs to the region over the next several years, but is expected to be a boon for the greater Northern Virginia and Washington, D.C., metropolitan area, driving up demand for apartments throughout the region.” The property is also within commuting distance of several other employment hubs, including D.C., Old Town Alexandria, Quantico, Fort Belvoir, The Pentagon, and Springfield, which is home to the Transportation Security Administration’s new headquarters. Goodman also points to the exceptional retail and lifestyle amenities The Preserve’s location offers as a compelling draw for potential residents: “The apartment community is ideally located west of Interstate 95, in very close proximity to two of the most popular retail destinations in Prince William County, Potomac Mills and Stonebridge at Potomac Town Center, as well as several other neighborhood centers and dining and shopping options.” Goodman also notes that the asset, which was originally constructed in 2010, was well maintained under previous institutional ownership, further driving its tremendous upside potential and presenting relatively low risk. “We were able to secure this like-new property based in part on a long-term relationship with the seller,” continues Goodman. “While this is Passco’s first purchase from Fairfield Residential, our teams are well acquainted, going back 30 years. It has been a delight to work together on this transaction.” According to Goodman, another key component to closing this acquisition was Passco’s willingness to work within an aggressive timeline and put up nonrefundable money to facilitate a quick close. The Preserve at Catons Crossing features competitive in-unit amenities, including energy-efficient stainless steel appliances, cultured marble and granite countertops, stainless steel sinks with designer faucets, custom cabinetry, preparation islands, dual-sink vanities, glass shower enclosures, oversized soaking tubs, gas fireplaces with cast stone mantels, built-in custom bookcases and desks, computer niches, walk-in closets, linen closets, double-paned windows, washers and dryers, private balconies or terraces, private garages, and additional storage. In-demand community features include a state-of-the-art fitness studio, executive business center, swimming pool and hot tub, outdoor fireside lounge, relaxing gazebo gardens, a barbecue area with gas grills, a children’s playground, and Amazon Hub lockers. *Originally published on [IREI.com](https://irei.com/news/passco-acquires-200-unit-community-northern-virginia/)* **Categories:** Passco News --- ### [Passco Companies Acquires $78M Multifamily Asset](https://www.passco.com/passco-companies-acquires-78m-multifamily-asset/) **Published:** September 10, 2020 **Author:** Synoptek Web Dev **Content:** Passco Cos. has acquired One Hampton Lake, a 330-unit Class A multifamily community in Bluffton, S.C. The property was purchased from Southeastern Co. for $78 million in an off-market transaction. “While these past several months have involved unprecedented considerations, interruptions, and increased scrutiny when sourcing new acquisitions, we’ve continued to seek out opportunities to add top-of-the-market multifamily assets in irreplaceable locations to our portfolio,” said Colin Gillis, vice president of acquisitions at Passco Co. “One Hampton Lake, which sits on a large, picturesque, lake within a highly affluent neighborhood, exemplifies this strategy. The quality of the property is unmatched and the site cannot be replicated.” According to Gillis, One Hampton Lake, which has an average household income of $115,000, has maintained high occupancy and leasing momentum throughout the pandemic. Gillis also noted that Bluffton was recently named the fastest growing town in South Carolina and has seen an influx in retirees with stable incomes. Further, the region benefits from multiple economic drivers and strong demographics even in the current environment, demonstrated by an unemployment rate that has remained well below the national average, which peaked in April, and experienced a quick recovery. “Bluffton is located between Interstate 95 and Hilton Head Island and is also within convenient commuting distance of both Beaufort and Savannah, Georgia,” said Gillis. “The Hilton Head-Bluffton-Beaufort MSA’s economic growth has easily outperformed the nation in recent years and is well positioned to continue in this direction. The region benefits from multiple economic drivers, including booming tourism and healthcare industries, the Port of Savannah, Parris Island, and other major area employers including Gulfstream and Wayfair.” Gillis added that the state of South Carolina has a business-friendly environment with tremendous incentives, further aiding the exponential growth. “We were fortunate to be able to acquire One Hampton Lake from Southeastern Company, after previously purchasing Grand Oaks at Crane Creek in Augusta, Georgia, from the firm last year,” continued Gillis. “Our familiarity and strong relationship with the seller were crucial to us being selected to work on this deal and being able to complete transaction from start-to-finish within 45 days, despite limitations resulting from the pandemic and social distancing orders. We are optimistic that we will see more opportunities going forward to acquire exceptional assets in secondary and tertiary suburban markets that have proven resilient through this time.” Originally built in 2018 with a Phase II expansion completed this year, One Hampton Lake is a garden-style community that sits on 35 acres. The property offers one-, two-, and three-bedroom units which feature quartz countertops, stainless steel appliance package, front-loaded washer/dryer, and screened-in first floor private patios and screened-in balconies on the second and third floors. Approximately 75% of the apartment units offer views of Hampton Lake. On-site community amenities include a resort-style infinity pool overlooking the lake with a boardwalk deck, kayak launch and storage, pet park and wash station, state-of-the-art fitness center, screened-in outdoor lounge with fireplace, outdoor kitchen and grilling areas with picnic table. Greystar will continue to serve as property manager at the community. *Originally published on [IREI.com](https://irei.com/news/passco-cos-acquires-78m-multifamily-asset/)*https://player.vimeo.com/video/462788515?title=0&byline=0&portrait=0 **Categories:** Passco News --- ### [Social Media brings residents at our communities together](https://www.passco.com/social-media-brings-residents-at-our-communities-together/) **Published:** August 21, 2020 **Author:** Synoptek Web Dev **Content:** Enjoy this short movie showcasing some of the fun events, community outreach, accolades and useful tips our teams have created for Passco apartment communities. [Click here to see our movie!](https://vimeo.com/450189030/a117810287) The last video is of a young, talented musician that 1000 West had perform during one of their “Courtyard Concerts” for the residents. Disclaimer: These posts will make you hungry!!! **Categories:** Passco News --- ### [Power of Partnership, Passco + Keybank](https://www.passco.com/power-of-partnership-passco-keybank/) **Published:** June 24, 2020 **Author:** Synoptek Web Dev **Content:** Visit [www.FannieMae.com](https://fm.fanniemae.com/powerofpartnershipkeybank/index.html) to read more about our partnership. **Categories:** Passco News --- ### [Passco Launches We CaRE to Support Communities Front-Line Heroes, Local Businesses Impacted by COVID-19](https://www.passco.com/passco-launches-we-care-to-support-communities-front-line-heroes-local-businesses-impacted-by-covid-19/) **Published:** May 25, 2020 **Author:** Synoptek Web Dev **Content:** By Dennis Kaiser. The coronavirus pandemic is introducing a host of new ways of acting and living our daily lives. Many have learned how to work remotely, are utilizing new tech tools to accomplish tasks virtually, and we all are adopting new health and hygiene practices such as wearing face masks or social distancing. But for some companies, looking at the world in a new way has introduced positive actions to improve the communities where they and their teams carry out their daily lives. Passco recently created a program called We CaRE that celebrates front line workers and supports local companies, such as restaurants or small businesses. Given the economic impacts being inflicted by “Stay at Home” orders, the Southern California-based commercial real estate investor sought to do something proactive for those who work at hospitals, or in fire or police stations to show they appreciated their service. At the same time, Passco recognized it could positively impact local businesses if they bought goods from those businesses who were experiencing economic challenges, too. The We CaRE program involves providing goodies or meals to local hospitals and service providers in the nearby area where Passco employees live and the company operates. Passco’s Stacy Stemen says, “it’s the least we can do to show our appreciation for all of their hard work in keeping us safe.” Stemen adds, “We CaRE is a way to pay it forward by supporting multiple people through a single community give-back initiative. If we all do this together, it is going to help. We know we’re helping keep dreams of entrepreneurship alive by supporting one business and community at a time. That’s the underlying theme and goal behind what we have created.” So far, Passco has contributed We CaRE packages to a local fire station in Aliso Viejo, CA, where one of its employee’s son-in-law works and several of the companies’ employees live; St. Joseph’s Hospital in Orange, CA; and to a local grocer in Alta Loma, CA where one of the companies’ employee’s shops. In the case of the grocer, the support was particularly impactful since the manager and his children all had contracted the virus and are fortunately on the road to recovery. The company is in the process of giving back to four additional local Orange County hospitals, along with several other grocers and small businesses requesting support by their employees. The We CaRE packages are essentially buckets of snacks and other treats, that are delivered with posters, and smile stickers. In other instances, Passco We CaRE ambassadors have delivered meals or food, based on what recipients have said they prefer – and will help brighten their day. There’s even an emoji with masks and smile on top that is being used in social media posts about the We CaRE program with the hashtag, #wecarecre. The program is designed to help people survive by addressing needs where Passco’s employees live, which carries a strong message about local community caring, and because the company purchases through its own vendors and local businesses it also has a trickle-down effect. Passco is urging other companies to follow suit and come up with ideas to extend the We CaRE movement in their community. In fact, the company plans to continue doing the program into the future because it has experienced such positive reactions from those receiving We CaRE packages, and employees have rallied behind the program. “This is an opportune time to launch a program like this since typically everyone in the retail industry would be gathering in Las Vegas for RECon this time of year,” Stemen said. “While grocery chains may be enjoying higher sales since people are eating at home more, mom and pop stores or restaurants and franchise owners are struggling to stay in business. This is a perfect time to band together and give back to our local small businesses and retailers.” Passco’s efforts show that a small investment can go a long way to help those in need, cheer people up, and perhaps save a business going through a difficult time. “Together, the Commercial Real Estate Family can make a difference one Community at a time! We have a long road of recovery ahead of us and every thoughtful gesture matters,” Stemen said. [READ MORE AT PASSCO’S WE CARE PROGRAM. ](https://www.connect.media/wp-content/uploads/2020/05/We-CaRE%E2%80%9D-Initiative-Guide.pdf) *Originally published on [ConnectMedia.com](https://www.connect.media/passco-launches-we-care-to-support-communities-front-line-heroes-local-businesses-impacted-by-covid-19/?utm_campaign=Connect%20CRE%20News%3A%20Weekender&utm_medium=email&_hsmi=88427561&_hsenc=p2ANqtz-_BUHIMFkOwfsB9U0bFyAwHGKNEd-7Mo5D_O67lIfFgqZjA8tzoTCQRl7RBlOzM0wduGtad7LD4vj75ojG_jQGFPGoG9Q&utm_content=88427561&utm_source=hs_email)* **Categories:** Passco News --- ### [Once The Darling Of Real Estate, Workforce Housing Is In For A Steep Decline, Experts Say](https://www.passco.com/once-the-darling-of-real-estate-workforce-housing-is-in-for-a-steep-decline-experts-say/) **Published:** April 23, 2020 **Author:** Synoptek Web Dev **Content:** by Joseph Pimentel. Before the coronavirus pandemic hit, workforce housing was on the upswing. Multifamily developers and institutional investors were flocking to the space. It was ranked as one of the best-performing asset types in multifamily development over the past five years. But in the age of the coronavirus, workforce housing is in for a steep decline, multifamily experts said. “The hardest hit sector is workforce housing,” The Bascom Group co-founder and Managing Partner Jerry Fink said during a Bisnow webinar on Getting Deals Done Amid Coronavirus. “Workforce housing was the sexy term in the industry. It was the most durable product type … but what we’re seeing, much like in 2009, that workforce housing has taken the biggest hit,” he said. Fink said the tenants that occupy workforce housing units have been impacted by several states’ shelter-in-place orders. Many of those tenants have been furloughed or laid off and may be unable to pay rent. More than 550 people registered for the webinar featuring Fink and Passco Cos. Senior Vice President of Acquisitions Gary Goodman and moderated by Ervin Cohen & Jessup Real Estate partner Elizabeth Dryden. During the 35-minute webinar, the trio of commercial real estate experts discussed getting deals done in the coronavirus era and shared their outlook on the commercial real estate industry. “In the last four to five weeks, the real estate atmosphere has taken a dramatic change, amid shelter-in-place orders, nervous investors and lenders facing liquidity crunches,” Dryden said. Goodman said in terms of potential acquisitions, the biggest challenge for his team is finding out how much a property is worth. Collections have dropped off in April and no one knows how much they’ll receive May 1. “The challenge is trying to figure out where the income is, as a result where the value is,” Goodman said. How to properly inspect a property that is in the middle of the deal has also become problematic. Multifamily tenants don’t want anyone coming into their units at the moment, so value-add buyers looking into performing any kind of renovations or customization will find it hard to do, Goodman said. “Without being able to go into those units, it’s going to be very hard to get any kind of pro forma together,” Goodman said. The only deals getting done are ones with nonrefundable deposits, buyers who put down earnest money deposits and can monitor a property’s income, or via 1031 exchange buyers, Goodman said. Fink said to get deals done, both parties have to think creatively. He said what many sellers are doing is putting a time-specific, post-inspection agreement into the contract. This would allow the buyer to close the deal and if they find missing appliances or some sort of damage to the property or units, the seller could provide a credit. “The key is creating a menu of goods and deducts that it is not debatable,” Fink said. Both Goodman and Fink believe that workforce housing is in for a decline. Workforce housing had been seen as the darling of the multifamily sector. Demand was high, vacancy rates were low and rent growth was above market-wide averages, according to CBRE. From 2013 to 2018, more than $375B was pumped into the segment, according to a CBRE report in November 2018. But there has always been a downside with the sector. Class-B and Class-C workforce housing historically does not perform well during economic downturns, CBRE noted. During the Great Recession, vacancy in Class-B and Class-C rose by 7% and 9%, respectively. Class-A vacancy peaked at 6.8%, the report found. “Renters of Class-B and especially Class-C assets are often less financially secure and more sensitive to rent increases,” the report read. “Many do not have the financial wherewithal to stay in their apartments if their income is reduced significantly. Moreover, many of them are in professions more sensitive to economic downturns.” Goodman said many residents in Class-B and Class-C properties are blue-collar workers, with many in professions that don’t allow the ability to work from home. Goodman predicts that workforce housing will suffer “fairly dramatically.” Fink said it is going to be a long road to recovery. “It’s going to be an ugly three, four, six months even with all of the stimulus money,” Fink said, adding that he thinks many employers will continue to tighten their belts and not hire all of their employees once this is over. In the best-case scenario, “we think the first or second quarter of next year \[will be when\] get things back to where we were,” Fink said. *Originally published on [BizNow.com](https://www.bisnow.com/los-angeles/news/commercial-real-estate/getting-deals-done-webinar-104076)* **Categories:** Passco News --- ### [Multifamily Leadership Announces National Ranking of Top 25 National Best Places to Work Multifamily for Women](https://www.passco.com/multifamily-leadership-announces-national-ranking-of-top-25-national-best-places-to-work-multifamily-for-women/) **Published:** April 6, 2020 **Author:** Synoptek Web Dev **Content:** Multifamily Leadership announced the national ranking of the top 25 National Best Places to Work Multifamily® for Women via live broadcast from the Multifamily Studios in Scottsdale, Arizona. With more than 500 people in attendance, this event provided the opportunity to celebrate, laugh, network, and build unity during this challenging period in history. Attendees were treated to some comedy to open the show followed by a live musical performance and in-studio interview with the emcee and musical guest. This is an exciting new list based on data gathered from the research conducted through the national Best Places to Work Multifamily® program. The only way to earn a rank on this prestigious list is to have participated and ranked as one of the Official National Best Places to Work Multifamily® that was revealed on November 21, 2019, at the Multifamily Leadership Innovation Summit. Of those 58 best-in-class organizations, 25 have earned a spot on this new list by having created cultures in which the women who were surveyed provided positive responses about where they worked. Ranking companies need a minimum of 15 females working in the organization or 25%, whichever is greater. The female response rate must be 40% or greater unless the total female count is less than 25 at which point the response rate must be 80% or greater. The ranked order is determined by the female percent of positive response, largest to smallest. This type of program is the voice of the employees in the apartment industry reaching beyond membership and trade organizations. It is not based on judges from suppliers or company volunteers and cannot be influenced by sponsorship or fundraising campaigns. The ranking of the Top 25 National Best Places to Work Multifamily® for Women was revealed live from the Multifamily Studios in Scottsdale, Arizona. Over 500 CEOs, top executives, and their teams, representing 44 states, joined live to hear the results and celebrate the accomplishment of all 25 ranking companies, with more and more continuing to watch the replay on multifamilyawards.com. Through the engagement tools on the live show, attendees were able to participate in the show and there was an overwhelming feeling of excitement, anticipation, and community. The ranking companies were honored with videos showcasing their teams and also video remarks from their CEOs and top executives. The national research and benchmarking program demonstrates the industry’s focus on people while illustrating its overall potential— as it annually contributes more than 3.4 trillion dollars to the U.S. economy and supports more than 17.5 million jobs. The 2020 Best Places to Work Multifamily® for Women: 1\. Keener Management 2\. Pathlight HOME **3. Passco Companies** 4\. The Franklin Johnston Group 5\. Respage 6\. Baron Properties 7\. Olympus Property 8\. Alco Management, Inc. 9\. JVM Realty 10\. Centra Partners, LLC 11\. IMT Residential 12\. CWS Apartment Homes 13\. MC Residential 14\. Portico Property Management 15\. Presidium Property Management 16\. Weller Management, LLC 17\. Carter Haston Real Estate Services 18\. Apartment SEO 19\. American Communities 20\. Continental Properties 21\. TI Communities 22\. Fogelman 23\. Stonemark Management 24\. RMK Management 25\. Northland Investment Corporation Article originally published on [*MutlifamilyBiz.com*](https://www.multifamilybiz.com/pressreleases/11582/multifamily_leadership_announces_national_ranking_) **Categories:** Passco News --- ### [Passco Closes on Luxury Ponte Vedra Apartment](https://www.passco.com/passco-closes-on-luxury-ponte-vedra-apartment/) **Published:** March 19, 2020 **Author:** Synoptek Web Dev **Content:** **This acquisition brings the firm’s current Florida portfolio to a total of 3,650 units.** By John McCurry POINT VEDRA, FL—Passco Cos., a privately held California-based commercial real estate company, has acquired The Reserve at Nocatee, a 244-unit luxury multifamily community in Ponte Vedra, Florida, for $54.9 million. Passco officials tell GlobeSt.com that the deal closed on March 17. The seller was not disclosed. The firm says it plans on remaining active in Florida and hopes to target additional projects in St. Johns County in the future. The Reserve at Nocatee is the first multifamily community with a Ponte Vedra address to be built since 1988. This acquisition brings the firm’s current Florida portfolio to a total of 3,650 units, according to Colin Gillis, VP of acquisitions, East at Passco Cos. “When sourcing acquisitions, we have an extensive list of factors we evaluate, including ongoing and projected employment and population growth, school system quality, educational attainment within the area, housing values, and household incomes,” says Gillis. “This asset, ideally located at the heart of the booming master-planned Nocatee community in Ponte Vedra, the second fastest growing suburb in America, exceeds these criteria points on all counts.” Gillis notes that Ponte Vedra is located 25 miles southeast of Jacksonville just over the Duval County line in St. John’s County, which has some of the highest financial barriers to entry in the entire state of Florida. Developers have often spent upwards of $40,000 per unit prior to completing site work due to high utility impact and school concurrency fees, which is keeping the future St. Johns County multifamily pipeline relatively limited, further driving the value of this rare acquisition opportunity. “Ponte Vedra is in unincorporated St. Johns County, which is not only one of the most affluent areas in the state, but among the top 10 fastest growing counties in the country,” Gillis said. *Originally published on [GlobeSt.com](https://www.globest.com/2020/03/19/passco-closes-on-luxury-ponte-vedra-apartment/?kw=Passco%20Closes%20on%20Luxury%20Ponte%20Vedra%20Apartment&utm_source=email&utm_medium=enl&utm_campaign=floridaalert&utm_content=20200319&utm_term=rem&slreturn=20210012135732)*https://player.vimeo.com/video/405909013?title=0&byline=0&portrait=0 **Categories:** Passco News --- ### [Passco: Continued Growth Drives Demand for Class A Multifamily Product in Atlanta](https://www.passco.com/passco-continued-growth-drives-demand-for-class-a-multifamily-product-in-atlanta/) **Published:** February 26, 2020 **Author:** Synoptek Web Dev **Content:** *By Nika Dufour, Vice President, Multifamily Investments at Passco Companies.* Atlanta has, over the past several years, drawn in top employers, professionals, and other residents who are attracted to the opportunities and lifestyles it affords. The dynamic market has continued to grow immensely, seeing 53,500 jobs added in the last 15 months. At Passco, we have expanded within the market over the past several years, building a current Atlanta-area portfolio comprised of nearly 1,830 units, with a total value of $385 million. The Atlanta-area multifamily market is, to put it simply, booming – and investors throughout the country have taken notice, creating significant opportunity. This has also led, naturally, to high competition and concerns of overbuilding in some submarkets. In light of this, what is the key to amassing and maintaining a lucrative portfolio in Atlanta? Our ability to continuously source strong-performing Class A assets in Atlanta, primarily in northern suburbs – a robust area offering quality demographics, a highly educated workforce, and excellent employment opportunities – is a testament to the importance of having a solid team in place. As Vice President, Multifamily Investments, I oversee analysts who, alongside the team led by Colin Gillis, Vice President, Acquisitions – East, meticulously evaluate all risks and consistently find opportunities where others do not. We’ve found success in having an investment and asset management team that works closely with our acquisitions team to identify properties, realizing and reevaluating goals throughout ownership to ensure we achieve optimal results. Leveraging past experience and expertise, our team thinks outside the box to find potential in multifamily properties, and continuously seeks out ways to improve our portfolio and resident quality of life. We keep our finger on the pulse of the market supply in order to maintain the right price and strong leasing velocity. When it makes sense, we incorporate amenities that are in-demand with target demographic, such as pet parks and package lockers, as well as enact energy- efficiency initiatives at our communities. Our success in the metropolitan area and the Southeast as a whole has led to rapid expansion of our Atlanta-based team, which has doubled since last year. We are currently in the process of moving to a larger office space to accommodate this growth. Establishing Atlanta as a hub of our acquisitions activity throughout much of the region not only positions us in close proximity to many of our properties, but also to our partners and industry colleagues, fostering the maintenance of strong relationships in the region and in some cases, streamlining operations. As Atlanta continues to thrive, we look forward to growing our portfolio and continuing to deliver residents with highly desirable living at our properties. That said, success would not be possible without an exceptional internal team and strong infrastructure of partners located within the market. [*Originally Published by Connect Media*](https://www.connect.media/passco-continued-growth-drives-demand-for-class-a-multifamily-product-in-atlanta/) **Categories:** Passco News --- ### [ADISA Welcomes 2020 President, Larry Sullivan](https://www.passco.com/adisa-welcomes-2020-president-larry-sullivan/) **Published:** February 14, 2020 **Author:** Synoptek Web Dev **Content:** ADISA is pleased to welcome our 2020 ADISA president, Larry Sullivan. He has been a member of ADISA since our association formed more than 15 years ago. Larry has more than three decades of experience in the real estate investment industry and we are pleased to have him at the helm of our board of directors this year. Larry, president of Passco Companies, has a strong record of leadership in real estate investment. During his career, he has been involved in more than $15 billion in real estate transactions on a national scale, including core, value-add and development projects spanning across all major property and specialty sectors. Larry is also a member of ADISA’s Legislative & Regulatory Committee, where he helps spearhead legislative initiatives on behalf of the association. In 2017, he played a central role on tax reform issues that affected Section 1031 exchanges, and coordinated ADISA’s position with other associations, such as the National Multifamily Housing Council and the Real Estate Roundtable. For his efforts, he was recognized as the 2017 winner of ADISA’s “A Champion of Excellence” award. The ACE award is the highest honor bestowed on an ADISA member by the Association and is given for demonstrating a remarkable commitment to excellence and adhering to the highest ethical standards and quality performance. This year is already shaping up to be a very successful one for our association as well as the entire alternative investment industry, and we look forward to the many accomplishments Larry will bring to the table in his new role. ADISA 2020 Board of Directors Officers: Larry Sullivan, Passco Companies President Brian Buehler, Triton Pacific Securities President-Elect Greg Mausz, Preferred Capital Securities Immediate Past President Sherri Cooke, AI Insight Vice President Ann Moore, International Assets Advisory Secretary Mark Kosanke, Concorde Financial Group Treasurer Directors: Brandon Balkman, Orchard Securities Jean Merriman, The Strategic Financial Alliance Catherine Bowman, The Bowman Law Firm Joe Michaletz, Discipline Advisors John Grady, Practus Vali Nasr, Claraphi Advisory Network David Johan, Altruist Advisors Brad Updike, Mick Law Nati Kiferbaum, Inland Private Capital Corporation Tom Voekler, Kaplan Voekler Cunningham & Frank Matt Malone, FS Investments Darryl Steinhause, DLA Piper, Ex-Officio, Legal Counsel *Originally published at [www.adisa.org](https://www.adisa.org/news/current-news/2020-board-of-directors-officers)* **Categories:** Passco News --- ### [Passco is a Finalist for Best Places to Work in Multifamily](https://www.passco.com/passco-is-a-finalist-for-best-places-to-work-in-multifamily/) **Published:** October 1, 2019 **Author:** Synoptek Web Dev **Categories:** Passco News --- ### [Passco Gives Back](https://www.passco.com/passco-gives-back/) **Published:** September 4, 2019 **Author:** Synoptek Web Dev **Content:** Almost five years ago, Passco Companies, LLC launched a new charitable giving program to empower our employees to support organizations they feel passionate about and to take pride in the company they work for. Our mission for Passco Gives Back is to get everyone involved and excited about giving back to their community. Passco also encourages employees to be creative with giving by organizing events like company food drives, group giving, theme days and more. This program has even inspired individuals to get involved by donating their time outside of Passco, at least five of our employees sit on the board of a nonprofit organization. Since the launch of Passco Gives Back in 2015, we have supported over 30 nonprofit organizations locally and nationally, such as The Literacy Project, OC Support our Troops – Semper Fi Fund, Human Options, Orangewood Foundation and Move for Hunger, to name a few. Passco’s CEO and Founder, Bill Passo, is on the board of directors for The Literacy Project. He and his wife, Eileen, have been active in this charity for years which aims to eliminate the literacy gap of emerging 2nd graders who are functionally illiterate. In addition, one of our employees volunteered to design marketing materials, pro-bono, for this organization, which has helped to boost their public communications and support growth for the non-profit. Larry Sullivan,President of Passco Companies, has spearheaded the support of our troops and American veterans. Passco is proud to be a supporter ofOC Support Our Troops and theSemper Fi Fundwhich provide immediate and lifetime support for combat wounded, members of the U.S. Armed Forces, veterans and their families. “I am passionate about giving back to those who have served our country, made personal sacrifices, and faced unforeseen hardships. OC Support our Troops and the Semper FI Fund have given me the opportunity to volunteer and make monetary donations that help show my gratitude to these men and women, as well as their families, for their service.” Sullivan says. Scott Allen, Vice President of Passco Development, is serving his fourth term on the board of directors, currently as Treasure forHuman Options. Passco employees have participated in Human Options Adopt-A-Family, fulfilling the wish lists of families and children in the residential programs, making their holidays brighter. “Human Options is grateful to Scott and Passco for the time, treasure and talent they continue to invest to ensure that everyone in Orange County is living violence free,” says Maricela Rios-Faust, CEO ofHuman Options. Alan Clifton ,Chief Investment Officer of Passco Companies, rallied support for The Orangewood Foundation. “I have been actively volunteering and donating to the Orangewood Foundation for almost 20 years. I’m extremely proud of the fact that today, the Foundation assists foster youth, vulnerable teens and young adults in our Orange County community, which now includes those experiencing homelessness and who have been affected by human trafficking,” says Clifton. Passco recently partnered with Move For Hunger as a way to further our reach across the country by getting our multifamily properties, in 17 states, involved in our charitable giving program. Move for Hunger is a non-profit organization that mobilizes the relocation industry to reduce food waste and fight hunger. In 2019, Passco enrolled 25 of our apartment communities in the program, providing them with food collection bags, transportation resources, marketing materials and the means to help stop hunger. Passco Gives Back also encourages individuals to think outside the box when it comes to giving. For example, one employee is passionate about the charity Comic Relief, so she came up with a way to get the whole company involved by asking Passco to host a Red Nose Day at the office. In just a few hours we raised almost $400 for children and young people all across the United States and in 34 countries internationally. Passco not only offers employees the opportunity to give through the Passco Gives Back program, but we also foster excitement, creativity and passion for each individual by giving them a choice in whom we support as a company. We are committed to making a difference on both a local and national level through empowering each employee to help others. *Written by: Passco Companies* **Categories:** Passco News --- ### [Next Generation Honoree: Jake Niles Leads Passco Companies into New Territory](https://www.passco.com/next-generation-honoree-jake-niles-leads-passco-companies-into-new-territory/) **Published:** August 22, 2019 **Author:** Synoptek Web Dev **Content:** Jake Niles brought extraordinary intuition, analytical skills, and drive – demonstrated through his ability to quickly close multifamily deals just a few months into his role at Passco Companies as Director of Acquisitions, West – positioning him for a very bright future in commercial real estate. He previously served at the Irvine, CA-based investment firm as a senior acquisitions analyst. Within less than six months of taking on the new role, Niles sourced and closed the acquisitions of two luxury multifamily assets totaling 630 units, with a combined transaction value exceeding $130 million, with an additional acquisition in the pipeline. His immense drive is further illustrated by the fact that he managed to seamlessly complete most of the work involved in these transactions during a transition period, when he was essentially fulfilling two roles – acting as his own analytical support before his previous position was filled. These are just a few of the reasons we chose Niles to be one of the Seattle & Pacific Northwest 2019 Next Generation Award winners. Connect Media’s third annual Next Generation Awards recognize young leaders in the commercial real estate industry who are likely to be influential for years to come. Niles’ fresh perspective and approach has led to the acquisitions of two exceptional multifamily communities in the state of Texas, a region where Passco had not found as much opportunity over the past several years. His extraordinary insight and achievements, as well as the value he has brought to the firm, have earned him a role at Passco typically reserved for professionals with much more experience in the field. [Article originally published on Connect Media](https://www.connect.media/next-generation-2019-jake-niles/) **Categories:** Passco News --- ### [How to Build Your Personal Brand](https://www.passco.com/how-to-build-your-personal-brand/) **Published:** July 19, 2019 **Author:** Synoptek Web Dev **Content:** BROOMFIELD, CO—Ever wonder what self-marketing strategies will work or how to make your presence, skills and achievements know, both within your firm and in the industry? Panelists at the recent GlobeSt.ELITE Women of Influence conference here in Broomfield, CO, focused on that topic and discussed how to take charge of your career development, build your own business within your real estate firm and overall strategies for advocating not only for yourself but for your team as well. Stacy Stemen, VP of corporate marketing at Passco, said that all of her prior years of different experience is what gave her a strong network. She said that for her, she has evolved herself over the years to do more than just marketing. For Stemen, building a brand is not about just putting your name on anything. “You have to make sure your brand is really what you want it to be,” she said. Her niche? “I found it in elevator networking, dog park networking and airplane networking. I have brought clients in from different places that I go and have justified my worth in the company by people that I have brought to them.” She also notes that you should really get to know who is in your building, and on every floor. “It is about developing that niche … Networking is just about a simple conversation.” Panelist Jodi Meade, principal and national director of the automotive properties group at Avison Young, says that her brand is still evolving. “Your brand is this living thing. Once you identify what you think your brand is, it will change over time. I liken it to a shark in that it has to always be moving.” Meade explained that when she started at CBRE in the mid-1990, at the time, the company had a concerted effort that no other company could catch them, and she took that same approach to her branding. “It took a while for me and I didn’t take marketing in school,” she said. “My mom created a brand and I don’t even think she knew she did…you define yourself and find your passion and then focus on it. If you do that, everyone else around you becomes passionate about you passion.” She adds that if you do all that, people will remember it. But having focus is the key, panelists agree. “Pick something you are known for, and then focus on it and think about how you can rise above the noise. What skill sets can you deliver that are different than a colleague?” For Meade, she narrowed her focus in on retail, but it wasn’t melting her butter, as she put it. But when she made the decision and launched the automation group for CBRE, she got the focus she was looking for. She focused initially on buying and selling and leasing car dealerships across the US. “When it was special purpose real estate, people started coming to me asking about RV parks, collision centers etc. If it’s got wheels, I can do it, but I stop at bicycles. As I focused, I became known for something. As long as you link it back to your passion and remain focused, it will work.” Moderator Beth Zafonte, director of economic development services at Akerman, explained that you really have to separate yourself, be an expert and qualify your niche. Identifying skill sets is also critical,” she said. “It is important to reach out to other people and get feedback and hear what they are saying. When they think of you and who you are and what you do, see if it is aligned with who you are and who you want to me and use that to make personal changes in your brand.” Meade added that in order to fine tune your brand, you must be willing to fail. “If we don’t get in the fear mode, we don’t find the success.” [Article originally published on GlobeSt.](https://www.globest.com/2019/07/19/how-to-build-your-personal-brand/) **Categories:** Passco News --- ### [Larry Sullivan interviews Ja’Ron Smith, Deputy Assistant to the President of the United States.](https://www.passco.com/larry-sullivan-interviews-jaron-smith-deputy-assistant-to-the-president-of-the-united-states/) **Published:** July 18, 2019 **Author:** Synoptek Web Dev **Content:** *“Bring jobs, safety, and opportunity back into the neighborhoods” – Ja’Ron Smith* Recently, at the Alternative Direct Investment Securities Association (ADISA) Conference in Washington D.C., our own Larry Sullivan had the esteemed privilege to sit with Mr. Smith in an in-depth interview about “Opportunity Zones”, one of the hottest topics in real estate today. Ja’Ron Smith, Deputy Assistant to the President, White House Office of American Innovation and Executive Office of the President of the United States, earned the White House nickname of “O-Zone Ja’Ron” through his efforts to educate and advocate for what are now known as Opportunity Zones. The purpose of this new investment tool, approved by Congress through the Tax Cuts and Job Act of 2017, is to revitalize communities through opportunities, empowerment, safety and other revitalization initiatives such as real estate developments and infrastructure improvements including charter schools; jobs creation initiatives and business development investments that make it possible for local entrepreneurs to become business owners. Raised by a single-parent household in Cleveland, Ohio, Mr. Smith earned an undergraduate degree in Finance at Howard University before earning a master’s degree in divinity, also from Howard. “When I was in high school, I saw friends and people I love who started to fall off that ladder of opportunity and that has really inspired me to do something to be a change or represent the interests of people who can’t really speak for themselves,” he said. There are now 8,700 Opportunity Zones throughout the US in both rural and urban areas and more than 35 million Americans live in them. There are huge pools of capital gains that could be redirected to revitalization efforts in these areas says Mr. Smith and the Administration views the Zones as a seamless way to pull capital back over. An early Opportunity success story: Major Flaggs, the Mayor of Vicksburg, Mississippi, is often credited as the first person to create an Opportunity Zone. “As a former legislator for 25 years, I’ve never seen any piece of legislation that allows more collaboration between federal, state and local government,” said Flagg. “45% of new Jobs in Mississippi were created in Vicksburg. Including the saving of 125 jobs in the city with salvaging of a plant created in 1889, through using the Opportunity Zone collaboration of state and federal officials.” “Ja’Ron is a living example of what is great in America. If the mission of Opportunity Zones proves to be successful, it is certainly something all Americans can and should fully stand behind.” Larry Sullivan, President of Passco Companies. **Categories:** Passco News --- ### [Women of Influence 2019](https://www.passco.com/women-of-influence-2019/) **Published:** July 12, 2019 **Author:** Synoptek Web Dev **Content:** Here we are again, our annual Women of Influence issue. This is the 26th year that we have covered the achievements of women in commercial real estate. As always, there are accounts of developments and deals and huge client wins as there are every year. But in recent years, including this one, a change is in the air. The deals are getting bigger, the wins more numerous. Indeed, the number of women being recognized for their accomplishments is growing larger by the year. This year we look at some 200 women within these pages, who were selected out of an almost untold number of nominations. To accommodate this growth, we added more categories than ever before including Humanitarian, Mentor, Innovator and Ally. **Investment Professional of the Year** *Gold Winner – Devin Barnwell, Morgan Stanley Silver Winner – Amy Price, Bentall Kennedy (U.S.) Limited Partnership* ***Bronze Winner – Nika Dufour, Passco Companies*** *Ada Arevalo, Avanath Abbe Franchot Borok, Amherst Capital Management Debra Franklin, Marcus & Millichap Leslie Himmel, Himmel + Meringoff Properties Inna Khidekel, Bridge Investment Group Donna Preiss, The Preiss Co. Vicky Schiff, Mosaic Real Estate Investors Cynthia Shelton, LandQwest Commercial, Orlando Sondra Wenger, CIM Group* **Nika Dufour, Passco Companies, LLC** Nika Dufour’s position as VP of portfolio management at passco Cos., encompasses a wide variety of duties. As a solutions-oriented leader, she has directly improved the efficiency and accuracy of the firm’s multi-family portfolio. She oversees the firm’s $2.6 billion portfolio and implements new processes for budget analysis and operational performance. She recruits and trains a support team to provide predictive analytics for the firm’s platform, through investment underwriting, budget reforecasting and portfolio valuations. With experience in asset management, joint ventures, mergers and acquisitions, she applies her knowledge to develop effective streamlined processes for the firm. *Article originally published in GlobeSt. Real Estate Forum’s July/August 2019 issue.* **Categories:** Passco News --- ### [Passco Hits $3.5B in Multifamily Transactions](https://www.passco.com/passco-hits-3-5b-in-multifamily-transactions/) **Published:** May 21, 2019 **Author:** Synoptek Web Dev **Content:** Passco Cos. has hit a total of $3.5 billion in total multifamily transaction volume. The milestone positions the company as a major multifamily player, and Passco plans to continue to grow the platform. The firm currently holds a portfolio of $2.6 billion in multifamily assets. “Over the past several years, we’ve been focused on acquiring best-in-class assets in suburban submarkets that are experiencing strong population and job growth, as well as boast exceptional school systems—and in many cases, limited delivery pipeline due to high barriers to development,” Gary Goodman, SVP of multifamily acquisitions at Passco, tells GlobeSt.com. “This was in part because we anticipated that many Millennials would not necessarily be able to buy a home in the near future, but still desired a high quality of living and amenities.” Originally a retail-dominant investor, the firm began focusing on multifamily assets in 2005 as a result of increasing demand for multifamily and decreasing demand and performance of retail assets. “This forward-thinking redirection not only preserved Passco’s profitability through the recession, but also greatly expanded our national presence,” says Goodman. “While we acquire throughout the country, our multifamily portfolio has been bolstered significantly by our activity in the Southeast in recent years. Our strategic focus and relationships resulted in Passco adding over $1 billion in multifamily product in that region alone since 2015.” The firm’s rapid success is impressive, considering they haven’t been the only investor to ramp up multifamily activity this cycle. “It is no secret that competition has increased significantly within the multifamily market, especially as more and more investors target suburban secondary and tertiary markets—where we’ve transacted for the better part of a decade,” says Goodman. “That said, because the Passco team has been active in these markets for so long and has established deep broker and developer relationships, we are well-positioned to continue to secure increasingly rare yet highly lucrative opportunities this year. Additionally, we are able to move quickly since we are purchasing all cash on our balance sheet, and we do not require outside investors to close.” As part of its growth, Passco also plans to grow its ancillary multifamily service platforms, including asset management. “We are focused on further optimizing our multifamily asset management strategy and continuing to strengthen our excellent relationships with Passco’s property management partners,” says Goodman. Looking ahead, Passco plans to continue to grow its multifamily portfolio and will focus on value-add deals and ground-up development. “Passco remains highly focused on the multifamily sector and staying ahead of the curve,” says Goodman. “We’ll continue to expand our multifamily portfolio and acquire exceptional, newly constructed assets in high-quality locations. Regionally, in addition to the Southeast, we are particularly bullish on Texas and Western submarkets.” **Categories:** Passco News --- ### [Inside Passco’s Senior Housing Strategy](https://www.passco.com/inside-passcos-senior-housing-strategy/) **Published:** May 3, 2019 **Author:** Synoptek Web Dev **Content:** *Passco Cos. Development sees a niche opportunity in developing active senior living facilities.* *By Kelsi Maree Borland*. Passco Cos. Development is expanding its ground-up development and value-add development platforms, and recently welcomed Carey P. Levy back to the firm to serve as president of the development company and spearhead the growth initiatives. Senior housing will be among the firm’s targets for development both new construction and value-add or repositioning opportunities. Levy sees a niche opportunity in active senior living, especially as the 65-plus demographic group grows and lives a longer, healthier lifestyle. “Every day, 10,000 individuals are turning 65. The baby boomers, numbered at approximately 73 million, currently make up over 30% of the nation’s population,” Levy tells GlobeSt.com. “The 65- to 80-year age group wants to be in an environment that makes them feel alive. It is up to us to provide that type of environment. The idea is to feed that demographic of seniors and think about how their living is going to continue to evolve. Therefore, our business plan is to concentrate on the resort-style hospitality senior living marketplace.” Consumer demand is clearly one of the key fundamentals attracting Passco to active senior living, but Levy says that it isn’t the only one. Capital demand is among the top reasons why Levy sees such an appealing opportunity in this sector. “There are a lot of factors driving our decision to expand into active seniors housing,” says Levy. “When you look at the capital demand in the seniors housing market, it is extremely strong. A lot of the healthcare REITs, pension fund advisors and other large companies have gravitated toward senior housing in the last 10 years. Of late, that money is going toward care-driven models with much higher acuity.” Senior housing as a product is also changing, and there is a need for capable developers to step in and create supply for today’s senior community. This demographic is culturally different than past generations, and, as a result, there has been a shift in the care and services needed. “Years back, assisted living was more hospitality based, taking care of someone with minimal needs,” says Levy. “That no longer is true. Now, assisted living facilities are now doing a lot the care providing that skilled nursing used to do, and skilled nursing is doing the work that hospitals used to do.” This progression has left a space for Passco to focus on active senior housing, which will serve downsizing baby boomers looking for amenity-rich and service-oriented communities. “There is niche for Passco and its joint venture partners to look at active seniors,” says Levy. “This sector is typically 55-plus, but the reality is the residents going into the communities that we are building are really more in the 70- to 80-year range. This demographic is adopting the philosophy that millennials have, which is simplify and downsize. When they do, they want an active senior living community with similar age groups. That is a strong driver for us at Passco.” [*Article originally published on GlobeSt.*](https://www.globest.com/2019/05/03/inside-passcos-senior-housing-strategy/) **Categories:** Passco News --- ### [Blue light special: Have retail real estate investors found their lane?](https://www.passco.com/blue-light-special-have-retail-real-estate-investors-found-their-lane/) **Published:** May 1, 2019 **Author:** Synoptek Web Dev **Content:** BY JOSEPH DOBRIAN How are investors responding to the evolution of retail real estate? Are they moving away from retail properties, in response to recent vacancies and downsizings in many malls and shopping centers? Or are they still finding ways to reap attractive returns, without abandoning the category? According to industry executives, increased online sales have indeed reduced demand for brick-and-mortar retail space. Overall, rents have compressed, and the value of many retail assets has dwindled. The cliché “flight to quality” is trumpeted as it invariably is during times of weakness. However, quality assets are available, and a canny investor will find opportunities to reposition underperforming properties. The investment community has not abandoned retail — but the category now wears a warning label: “Needs work.” Notwithstanding recent cries of doom, freestanding retail REITs were the top-performing segment of the U.S. REIT market in 2018, delivering a 13.93 percent total return for the year compared to 11.43 percent for the next-most-successful REIT segment, manufactured homes. This, in a year when REITs slightly outperformed the S&P 500 and ran well ahead of the Russell 2000. Jim Costello, senior vice president at Real Capital Analytics, reports in a recent article that sales of mall properties shot up in volume in 2018 — more than 800 percent — with great disparity in pricing depending on asset quality. Online purchases have changed the retail landscape dramatically. The U.S. Department of Commerce reports that e-commerce sales have doubled over the past five years, hitting $513.6 billion for all of 2018: a 14.2 percent ($64 billion) jump from just a year earlier. As a result, shopping malls — where consumers used to buy many of the products they now buy online, such as apparel, bedding, books and home goods — have suffered. Adam Hooper, co-founder and CEO of RealCrowd, a company that specializes in commercial real estate crowdfunding, notes that mall-store sales slowed during the global financial crisis and still have not recovered fully. In the fourth quarter of 2018, he says, sales at mall stores in the United States fell to a seasonally adjusted rate of $159 billion, and department stores, many of which are housed in malls, have fallen 37 percent since their high point in 2001, hitting a new low of $37.1 billion. Nevertheless, e-commerce still only accounts for 11.2 percent of all retail purchases, and demand remains high for “daily needs” retail centers that include grocery and drugstores and services such as dry cleaners, nail salons, and gyms. E-commerce’s percentage of total retail sales will inevitably increase. But demand for traditional retail will remain, perhaps more commonly in the form of showrooms where customers order product for direct shipping. Retailers whose presence is primarily online will continue to open traditional stores, and the line between the two methods may eventually fade to nothing. What has changed the most in retail real estate is that as consumers have embraced online shopping to purchase goods they used to buy at malls and regional shopping centers, their expectations of these environments have shifted, Hooper says. “Instead of visiting malls and regional shopping centers just to purchase products and leave,” he elaborates, “shoppers are now expecting new experiences, fun gathering places, innovative dining and socializing options, entertainment, and programming in the form of classes and seminars. Retail owners need to provide these experiences to keep their centers profitable.” Consumers also respond positively to backfilling of vacant space, from local strip centers to former big-box stores, with nontraditional uses such as medical office, health/wellness providers, massage therapy studios, and even churches and other religious organizations. How has this evolution affected investment in retail real estate, and the development of new retail properties? How are investors adjusting their short- and long-term strategies? Given the amount of negative pressure retail has been seeing from the headlines announcing big-box store closings, real estate prices have been depressed across the retail sector. This means opportunity for investors who still believe in the class. However, most retail investments look like contrarian plays for now. According to Hooper, both short- and long-term investors are achieving better returns by identifying the locations and properties flexible enough to accommodate shifts in the industry. Due to the scarcity of land for development and investors’ wariness regarding the sector, most retail development today consists of repositioning existing properties rather than ground-up construction. Vacant big-box stores have been repurposed as fitness centers, restaurants, movie theaters and grocery stores; converted to last-mile warehouse facilities; or parceled up and leased to several tenants. Mixed-use centers, that combine ground-level retail with residential or office space on upper floors, remain popular. Value buyers, looking for higher yield and acquisitions at a discount on a price-per-square-foot basis, can find deals in retail assets. Hooper sees a decrease in desire for retail among high-net-worth individuals, and institutional investors have cooled slightly on the category. Both private and institutional buyers are broadening their search into secondary and tertiary markets — Hooper cites Baltimore; Milwaukee; Charlotte, N.C.; and Louisville, Ky. — in hopes of achieving higher cap rates on their investments and breaking into new markets before prices get bid up too high. Several Midwestern markets that hit their price nadirs at the beginning of the global financial crisis have grown significantly in the past decade. Todd Siegel, vice president of commercial investments at Passco Cos., agrees that brick-and-mortar retail will not disappear, but it will have to evolve. Even before the recession, he notes, regional malls were criticized as dated and inconvenient. With the recession, demand for commodity-type goods fell while demand for food, entertainment and services increased. But because consumers will always desire human interaction as part of their nature, traditional retailers can stay afloat by adjusting their business models for improved convenience and seeking locations in high-traffic shopping centers, close to Internet-resistant stores and services. “We have seen the major traditional mall operators shed their class B and C assets in favor of putting more capital into the class A centers that have been resilient and successfully adapted to the changing consumer habits,” Siegel says. “We have also recognized that grocery- anchored centers have morphed into lifestyle centers. Because they offer increased convenience to consumers and lower operating costs to owners, many investors are turning their attention to this category.” These grocery-anchored lifestyle centers attract a variety of tenants and will be easy to lease up if they are well located. Much of the traffic will come from customers who need to pick up a last-minute item such as milk or paper towels, when even Amazon Prime is not quick enough. Despite the so-called retail apocalypse, Siegel adds, he sees investors shifting from other real estate product types to retail or, in some cases, back to retail. Amid increasingly high competition, compressing cap rates, and little margin for error in sectors such as multifamily and industrial, smart investors are finding opportunity in retail centers, with higher cap rates to adjust for the perceived risk. Some real estate investors are forming alliances with real estate services firms, taking advantage of the latter’s management skills and research capabilities to find investment possibilities with greater potential, as well as more dependable tenants. Mark Dufton, CEO of real estate at Gordon Bros., an investment and advisory firm, recently teamed up with JLL, a leading tenant rep firm, combining Gordon’s retail restructuring with a firm that takes a consultative approach and offers comprehensive due diligence services. He explains that owners of retail assets have to be more careful than ever about whom they lease to, in view of so many retailers closing stores in recent years. A new store transaction, he says, can take a year, now, whereas it used to take six months on average. Dufton says Gordon’s usual strategy, faced with a vacant space once occupied by a Sports Authority or a Toys ‘R’ Us, is to accept the fact the space will have to be split up and leased to multiple tenants: credit tenants, usually, but seldom able to pay more than half to two-thirds of what the larger retailers had paid. These tenants might not be traditional retailers — in which case, owners will have to be certain that non-retail tenancy is allowed under the terms of the loan documents. In some cases, a residential play might be possible. He notes that Dollar Stores have begun leasing bigger boxes, nowadays, but Family Dollar has been closing stores. Restaurants and fitness centers are back-filling much of this space. Most class A and A-plus assets in good locations will do fine in the long run, he concludes, but strip centers in secondary and tertiary markets might require some close attention and clever brokerage. He suspects that retail in general has more vacancy than is currently reported, since retail data in particular suffer from a chronic time lag. Indeed, he predicts that some retail real estate will either be repurposed or will go away entirely. Even some class A centers that used to be considered bulletproof are showing wear and are converting to outward-facing lifestyle centers. In general, he advises investors to be wary of malls and outlet centers. “There are buying opportunities, and still a lot of money to be made,” he says, “but those opportunities are not for the faint of heart. You have to have detailed knowledge of the retail landscape, and how to redevelop that property, and what the new retail rental terms are. If you have the knowledge and the capital, I would advise you to go all in on some of these deals. You cannot buy on a price-per-pound basis and hope that retail recovers. Retail real estate is a get-rich-slow business.” Dufton says he is surprised that mall REITs in general are holding up well — but he notes that some REITs are taking extraordinary measures to try to keep their properties tenanted, such as suing tenants to prevent their closing stores (as Simon Property Group did in 2018 with Starbucks and Wolverine World Wide). Are we likely to see much change in the type of investor that favors retail real estate? Some non-traditional speculators have been drawn to retail by the pricing and lack of bidding, but they will not get far without thorough market knowledge and the resources to manage the property day to day. Dufton says he has noticed a few players who used to work for REITs now raising money on a deal-by-deal basis and lining up leases while still in the due diligence process. But, he warns, these people usually have a deep understanding of the local market. The primary goal of retailers today, he says, is to reduce occupancy expense. Thus, owners and investors will have to make some hard value decisions, sometimes involving a large asset. Conservative investors still like single-tenant net-leased properties, usually triple-net-leased to large credit tenants such as a drug chain, dollar store or bank. These plays, and their returns, tend to be unexciting but safe. Ryan Butler, managing director of Stan Johnson Co., which specializes in engineering these transactions, says that while fewer of these stores are being built than before the Great Recession, plenty of deals are available. Sales are often triggered when the debt falls due, or when a high-net-worth owner dies and the heirs want to create a cash event, so assets with 10 or more years left on the lease sometimes hit the market with little notice. On the tenant side, Stan Johnson Co. has seen growth in restaurant concepts, expansion of the gym/health club space, and expansion of car repair and body shop chains. Other retail concepts are streamlining and making improvements through “blend and extend,” right-sizing the rent while extending terms. “Investor activity remains strong,” Butler concludes. “You continue to see plenty of 1031 exchange buyers chasing retail properties, because retail is accessible to them, price-wise. Institutional investors may be more sensitive since they have to answer to Wall Street. But with interest rates likely to stay low, the market looks as strong as it was last year if not stronger.” *[This article is originally published by Real Assets Advisor](https://irei.com/publications/article/blue-light-special-retail-real-estate-investors-found-lane/)* **Categories:** Passco News --- ### [Enter, Exit or Adjust? A Summary of Market Trends to Inform Self-Storage Investing Strategy](https://www.passco.com/enter-exit-or-adjust-a-summary-of-market-trends-to-inform-self-storage-investing-strategy/) **Published:** March 29, 2019 **Author:** Synoptek Web Dev **Content:** *by Todd Siegel, Vice President, Commercial Investments Passco Companies, LLC.* There’s still strong consumer demand for self-storage and, therefore, many opportunities for new and existing investors. Here’s a summary of market trends for 2019 to help you make smarter investing decisions. As we move into the second quarter of the year, self-storage stakeholders are naturally looking to the remainder of 2019 and what lies ahead for the sector. At this point in the extended real estate cycle—and on the heels of several years of skyrocketing development volume—many investors are evaluating whether this is the right time to enter or exit the self-storage market or adjust their overall strategy. The good news is, there remain several indicators of sustained strong demand for self-storage, which is still outpacing supply in select U.S. markets. That said, warranted concerns over slowing rent growth have some investors approaching opportunities with caution. To help you make smart decisions, let’s summarize the prominent trends impacting the market. **New Players Enter** For the better part of two decades, the self-storage real estate investment trusts (REITs) have ruled the market. I anticipate that while they’ll remain big players in 2019, they’ll retreat to the sidelines as institutional and private equity continues to flood the sector. While rental-rate increases have slowed due to the influx of development, still-attractive capitalization rates are appealing to private investors. Further, self-storage is widely believed to be recession-resistant, or at least highly resilient, compared to other asset classes, with some of the demand driven by consumer downsizing and displacement. Many self-storage experts predict a slight downturn in the market in 2020 or the year after, so we’ll likely see investors bolstering their portfolios this year in anticipation. Some will be new to the industry. For example, the similarity between self-storage and multi-family assets, both in demand drivers and operation, is drawing seasoned multi-family investors to the storage sector, often with the goal of creating synergistic, resilient portfolios. Private self-storage owners and developers looking to capitalize on high demand will want to consider doing so this year, as investors and lenders alike remain hungry for the product type. **Properties Become More Competitive** As more supply and players enter the market, self-storage properties will need to be highly amenitized to remain competitive. For example, secure gated access and climate control will be critical in most areas. Specialty offerings such as purpose-built wine storage will come to be expected in affluent submarkets. Newly constructed or renovated facilities will see more upside potential for rent, hedge against a potential recession within the next couple of years and thrive in the long term. For these reasons, my company has been bullish on acquiring primarily newer class-A or recently upgraded assets that are fully amenitized and those in need of light value-add renovations. When someone purchases an older building, he runs the risk of being functionally obsolete for today’s self-storage uses and tenant expectations. These properties could require a much higher than anticipated capital investment to bring it up to current standards, and the project might not be feasible. Therefore, it’s more important than ever to approach these investments with caution and perform appropriate due diligence. **Markets Continue to Grow** Many investors are hesitant to acquire in cities or regions that have seen an overall drop in rental growth. These declines are primarily a result of the record amount of new supply that has entered the market. That said, finding the right property in the right location that supports the demand can come down to the specific intersection, much like with grocery-anchored, daily-needs shopping centers in the retail space. It’s important not to acquire where self-storage deliveries are ahead of housing. This means a city might experience oversupply on one side of town while experiencing a strong need for the service on the other. Storage facilities have a small trade area, and tenants aren’t going to drive more than 15 to 20 minutes to a facility, especially with large or valuable items in tow. This year, we’ll likely continue to see strategic development in markets that are popular for job relocation due to growing employment opportunities and appealing quality of life. Investors should also consider areas where there’s ample housing is in the pipeline to support self-storage demand. There are also strong opportunities in several submarkets in Florida and other parts of the Southeast, as well as parts of Texas and Denver to the west. I believe the self-storage sector will remain active in 2019. While the recent waves of new construction and rent increases have likely peaked, there remains ample interest and opportunity in the market as fundamentals and demand continue to be strong. Todd Siegel is vice president of commercial investments for Passco Cos., which acquires, develops and manages multi-family and commercial properties throughout the United States. The company has acquired, managed and developed more than $4.7 billion in property since its inception. [*Article originally published by Inside Self Storage*](https://www.insideselfstorage.com/investing-and-real-estate/enter-exit-or-adjust-summary-market-trends-inform-self-storage-investing) **Categories:** Passco News --- ### [Top Takeaways From The CREF/ Multifamily Housing Convention & Expo 2019](https://www.passco.com/top-takeaways-from-the-cref-multifamily-housing-convention-expo-2019/) **Published:** March 18, 2019 **Author:** Synoptek Web Dev **Content:** *by Alan Clifton, Ogal Claspell* Alan Clifton is Chief Investment Officer and Ogal Claspell is Senior Vice President of Realty Investments with Passco Cos., Irvine, Calif., which acquires, develops and manages multifamily and commercial properties throughout the U.S. totaling $4.8 billion in property since its inception. Learn more at passco.com. More than 3,000 real estate finance professionals gathered at the Mortgage Bankers Association’s CREF/Multifamily Housing Convention and Expo to network, deepen relationships and assess the state of the industry. Conversations included the overall health of the real estate industry and whether a downturn is on the horizon, how debt funds and commercial mortgage-backed securities are aggressively pursuing transactions, the potential impacts of Opportunity Zones on investment and financing and methods to tackle multifamily affordability issues. Our top five takeaways from the event: **1) The Overall Outlook Remains Optimistic But Realistic** The general consensus of industry leaders at CREF was that 2019 is ramping up to be a strong year for commercial real estate finance activity, similar to last year. While CRE professionals are concerned about a potential upcoming downturn within the next few years, it is widely believed that a factor not directly related to real estate such as a significant political event or disaster could set this in motion. There is no hard data to back up exactly when and why a downturn will occur, and it is not expected to be nearly as dire as the recession of a decade ago. Still, investors and lenders alike are approaching transactions realistically and with increased scrutiny, performing strict due diligence to ensure investments are sound. Ultimately, there is ample capital available that is hungry for real estate deals–although due to this cautious optimism, the question on the minds of many real estate finance professionals is if there will be enough transaction activity to move it all. **2) Record Levels of Debt Fund Activity** A major topic of discussion over the course of the event was amount of debt funds aggressively competing in commercial real estate finance. The approximately 140 debt funds in existence originated an unprecedented $67 billion in mortgages in 2018–more than double the volume originated just two years prior. These funds are also experiencing an influx of institutional and foreign capital. Since they are not under strict regulation like banks, debt funds are able to offer much higher leverage and are an increasingly attractive alternative option, especially for short-term bridge loans. Further, debt funds have not only proven themselves to be a strong competitor of banks, but also an ally. Banks can limit risk and increase their own returns through partnering with debt funds to fulfill a portion of borrowers’ requirements. **3) The CMBS Market is Ramping Back Up and Will be More Aggressive** After a strong rebound in 2017, CMBS originations have been trending down over the past year and are anticipated to decrease further in 2019. But CMBS lenders remain hungry for deals. To combat this decline in activity, CMBS lenders are increasingly offering full-term interest only structure, which could create some risk, and higher loan-to-value ratios. **4) Opportunity Zones Could Potentially Affect Pricing** At CREF, industry experts considered the possibility that Opportunity Zone legislation could create artificial asset bubbles; that investors chasing tax breaks without understanding the realistic value of the properties they are acquiring could lead to overpayment and ill-advised underwriting. For example, an investor might identify a retail asset in a designated Opportunity Zone location that presents an opportunity for value-add rehabilitation, then after completing renovations, realize the fundamentals of the submarket make it difficult to attract the high-quality tenancy that was anticipated. While still speculation at this point, it is important those pursuing Opportunity Zone fund investments keep this possibility in mind when evaluating the value of these acquisitions moving forward. **5) GSEs Are Highly Active–And Attempting to Solve the Affordability Crisis** GSE loan volume hit a record-high last year. The bulk of Fannie Mae and Freddie Mac transactions in 2018 were in the uncapped Green, Seniors Housing, Affordable Housing financing spaces. At CREF, agency leaders expressed the importance of addressing the affordability crisis in multifamily and encouraging investment in the affordable housing sector. For example, Freddie Mac recently introduced a program intended to bolster affordable housing development by removing some of the interest rate risk to developers when projects move from the construction financing stage to permanent financing. That said, the bottom line challenge to overcome is that affordable housing cannot be built affordably in many cases amidst skyrocketing lands, materials, and construction costs, as well as entitlement and zoning issues so this is likely to continue to be a persistent and prominent issue facing the industry as development costs rise overall. On the heels of CREF 2019, record levels of activity and strong competition for financing transactions indicate a highly positive outlook for commercial real estate/multifamily financing and investment. While transactions will continue be approached with increasing caution as the cycle lengthens, several significant players in the lending space and new incentives for investment, including those presented in Opportunity Zone legislation and through multifamily GSE programs, are likely to sustain a healthy and diverse market in the years to come. *This article was originally published by [MBA Insights](https://www.mba.org/publications/insights/articles/current-issue/top-takeaways-from-the-cref/multifamily-housing-convention-and-expo).* **Categories:** Passco News --- ### [Connect Retail West Recap: “Alive, Well, & Here to Stay”](https://www.passco.com/connect-retail-west-recap-alive-well-here-to-stay/) **Published:** January 23, 2019 **Author:** Synoptek Web Dev **Content:** *By Dennis Kaiser* Connect Retail West, held Tuesday, January 22, 2019 at The Resort at Pelican Hill, drew a crowd of 300 to hear from the innovators in the retail space. The afternoon discussion featured panels on the future of malls, where investment sales are headed, experiential retail that every customer wants to come back to, and a special keynote conversation with industry icon Sandy Sigal of Newmark Merrill. Today, we’ll hit the highlights of yesterday’s conference, but look for deeper dives of each panel in the coming days on Connect CRE. It Starts with Service featured a Special Presentation by Caruso’s Vincent J.Burneikis, Vice President of Learning, Development, & Hospitality, on what it takes to create the experience in retail centers that every customer wants to come back to. That is accomplished by capturing “heart share and market share.” He points out, one of the inherent needs of people is to feel the energy of the street, a secret Caruso has uncovered and incorporates into its properties. In doing so, the retail developer and owner has achieved success few others have. That includes centers that capture longer shopper visits, generate higher per-visit spending, and places where 92% of shoppers purchase something. The guest experience at a Caruso property is encapsulated in three elements: product, service and atmosphere, all of which must work together to create the right mix. By acutely focusing on customer service, Caruso helps give people the gift of time. The Future of Malls panel focused on redevelopment, reinvestment and reinvisioning. Developers and investors shared how they are changing retail spaces, and thinking way outside the box to create new spaces where we shop, eat, work, and play. Festival Companies’ Robin Bhalla predicts “Amazon is here to stay. I don’t see that as problem. They’ve helped retailers adapt and step up their games.” Today, that typically means focusing on placemaking, creating connectivity, and giving people a reason to get off the couch. Simon Property Group’s Matt Sebree points out a strategy today may often involve exploring what digital native brands fit a market or mall. If an owner can help a digital native brand make the successful transition into a brick-n-mortar location it means more opportunities for everybody. If they don’t make the shift, it may mean they shut down online channels, too. But, if they are able to make the jump, he says, “there’s more \[stores\] open to buy \[from in\] our portfolio and for everybody” and that helps to evolve the retail sector. GPI Companies’ TR Gregory agreed it is no secret that e-commerce is here to stay, though the initial fear surrounding it is evolving into new opportunities and synergy for retailers. As online retailers open up brick-n-mortar stores, it becomes a new reality and more opportunities. That’s especially true if they do fulfillment for online orders from those locations. He notes that’s a good thing because it brings people to a property. Stream Realty Partners’ Michelle Schierberl notes she expects to see more alternative uses emerge across the retail landscape. An example of that is San Diego’s Horton Plaza, which is being converted from a retail center to creative office. The days of 100% retail could give way to a residential component being introduced or a hospital facility being added to a center, she says. Greenberg Glusker’s Craig Coan pointed out that he’s heard that retail properties in China only contain 30% retail space, with the balance being occupied by such uses as kids tenants, like tutors or healthcare services. The Up, Up, Up? Investment Sales in 2019 and Beyond panel explored what’s next. That included putting the recent market volatility and changing trends into perspective as the year of consolidation, dispositions, and redevelopment unfolded. Investment sales leaders shared what they see for the future and the next cycle. CBRE’s Philip D.Voorhees says rent rolls are being transformed and now contain medical, fitness and other services. He predicts the better malls will still survive, though the poorly-performing ones will “go away” and the deck will get cleared. Still he cautions, the start of 2019 could potentially be a bit bumpy because of the government shutdown, the equity dip and other factors, which could create a trickle down effect on consumer confidence and spending. NKF’s Glenn Rudy says, “at the granular level, retail is alive and well. It is here to stay,” noting 90% of sales still occur in stores. E-commerce has not killed brick-n-mortar, he says, “it has enhanced it as online retailers have invested in themselves and their omnichannel experiences.” He cites clear evidence of retail’s health is the record annual sales achieved last year, and high, 45% year over year increase in sales. He notes, the right kind of retail continues to thrive. PASSCO’s Alan Clifton points out the retail numbers don’t reflect what the reality is, and the way markets may be valuing the sector. He says, “we’re America and we’re built on change” and the ability to adapt to change. He expects new visions to be created as the “next generation” emerges within the retail sector. Marcus & Millichap’s Bill Rose says it is not “doom and gloom” for the retail industry, but “evolution.” He is concerned the market has plateaued from 2015 through 2018 though. As a result of that flattening, he advises to pay attention to job growth, money supply constraints, and in a low interest rate environment if values plateau. Donahue Schriber’s Ryan J. Gillard says they see opportunity in good tertiary markets, especially with open air grocery-anchored centers. The afternoon panels concluded with a keynote conversation between Connect Media’s President and Founder, Daniel Ceniceros, and Newmark Merrill’s President and CEO Sandy Sigal (pictured above on left). Sigal shared how his passion for retail real estate has turned into a career-long endeavor. His firm has built a retail portfolio of 80 assets that touches 2,000 tenants. For Sigal, the key in retail is to find the right balance between consumers “heads and hearts. Sentiment drives traffic,” he says. Today, he notes monitoring and using consumer data, including trends gleaned from Facebook, Yelp or other Social Media channels, allows retail developers and owners to better understand consumers and then create experiences they actually want. The level of measurement for a center’s traffic has evolved to now include sophisticated tech resources and tools such as Wifi. That can let an owner know what stores people are visiting, or what parts of a property are most popular. In turn, that information can be used to market the center to consumers, build a tenant mix that’s right for a neighborhood, or build events that resonate with the community. Sigal says, centers that give back to the community will be rewarded. Sigal shared that he believes online retail’s emergence and growth has actually been good for retail centers. “The number of online only shoppers has gone down three years straight,” notes Sigal. “The number of in-store only sales has been static,” but he points out, when shoppers who do “both are considered, the number has gone straight up. Brick-n-mortar retailers have figured out how to reach customers online, and online retailers have figured out how to get into stores,” says Sigal. *This article was originally published on [Connect Media](https://www.connect.media/connect-retail-west-recap-alive-well-here-to-stay/).* **Categories:** Passco News --- ### [2018 Top Multifamily Owners](https://www.passco.com/2018-top-multifamily-owners/) **Published:** November 20, 2018 **Author:** Synoptek Web Dev **Content:** **Despite growing economic uncertainty surrounding global trade and a record-long expansion, the commercial real estate sector is maintaining steady growth.** *by the Editors of Multi-Housing News.* ![](https://www.passco.com/uploads/ckupload/images/2018%20Top%20Multifamily%20Owners_Table.jpg)**STRENGTH THROUGH DIVERSIFICATION** *By Chris Nebenzahl* Despite growing economic uncertainty surrounding global trade and a record-long expansion, the commercial real estate sector is maintaining steady growth. Certain sectors, including multifamily and self-storage, have seen significant new supply recently in response to strong demand from 2012-2016. As a result, rent growth and overall returns have been somewhat muted as new supply is absorbed. Long term, however, these sectors remain attractive due to demographic factors impacting population growth and migration. Retail has also experienced weaker performance of late, as the industry is poised for a dramatic shift due to rising e-commerce channels and experience-based consumption. But the retail sector is far from dead, with pockets of strength in addition to the areas of weakness over the next few years. Industrial, on the contrary, has been the beneficiary of new trends in retail and consumption. In major logistics markets such as the Inland Empire, New Jersey and Chicago, new industrial property is absorbing quite rapidly despite heightened levels of supply. The office market seems comfortably stable, as modest new supply, most at the high end, is being filled with growing tech firms and trendy coworking spaces. Meanwhile, strong office-using employment growth continues to drive the economy and maintain overall vacancy rates at a normal level. Given the spectrum of fundamentals affecting different sectors, the value of diversification remains increasingly important for our top owners. Not only do the firms atop our rankings have some of the largest portfolios from a square foot and unit perspective, they also own properties in numerous different sectors. Within the confines of multifamily, diversity remains important, and a strong mix of affordable, market rate, student and senior housing can allow an owner to navigate through market and economic volatility, while maintaining strong performance. Many of our top firms topped last year’s list, as well, although many—including Clarion Partners and Lincoln Property Co. —have expanded their portfolios both on the commercial and multifamily sides in the past year. Our rankings do not simply focus on the size of an owner’s portfolio but also on its occupancy, value and focus on environmentally friendly buildings. Our rankings are derived from data provided by owners via our annual survey. Not all commercial and multifamily owners responded to the survey. **METHODOLOGY** The 2018 CPE-MHN Ranking of the Top Owners utilized self-reported data for all firms. The ranking results from a weighted formula based on a variety of factors (only a few of which are specified here), including the total square footage and number of units owned, owned portfolio value, historic performance and a focused or diversified participation in property sectors. The ranking represents what we feel is a logical balance between firm growth and market share, as well as property diversity. *This article was originally published on [Multi-Housing News](https://www.multihousingnews.com/post/2018-top-multifamily-owners/)* **Categories:** Passco News --- ### [Bill Passo in the 2018 OC 500](https://www.passco.com/bill-passo-in-the-2018-oc-500/) **Published:** November 14, 2018 **Author:** Synoptek Web Dev **Content:** November 14, 2018 **Categories:** Passco News --- ### [Suzy Cottle OCBJ'S CFO of the Year Nominee](https://www.passco.com/suzy-cottle-ocbjs-cfo-of-the-year-nominee/) **Published:** November 7, 2018 **Author:** Synoptek Web Dev **Content:** ***Congratulations Suzy!*** THE 2019 CFO OF THE YEAR AWARDS are presented to area financial professionals for outstanding performance as corporate stewards for the preceding fiscal year. Awards are presented in five categories: - Outstanding CFO of a Public Co. - Outstanding CFO of a Private Co. - Outstanding CFO of a Not-for-Profit Organization - Outstanding Corporate Controller - Rising Star (Nominees for the Rising Star Award are not limited to CFOs; senior-level financial professionals may be considered) Dinner & Awards Program will take place on Thursday, January 31, 2019. [*OCBJ Annual Awards Programs & Calendar of Events*](https://www.ocbj.com/bizevents/) **Categories:** Passco News --- ### [Trends in Real Estate Investing: As the growth cycle matures and decelerates, conventional thinking undergoes some revisions.](https://www.passco.com/trends-in-real-estate-investing-as-the-growth-cycle-matures-and-decelerates-conventional-thinking-undergoes-some-revisions/) **Published:** November 7, 2018 **Author:** Synoptek Web Dev **Content:** *By Anna Robaton.* Investors have plenty to celebrate this year on the economic front. The U.S. economy continued its nearly decade-long expansion and has been stronger lately than many people expected. Gross domestic product grew by more than 4 percent in second quarter 2018 — the highest rate in four years. So why aren’t commercial real estate investors and lenders quite as bullish as they were a short time ago? The reasons are many. The U.S. economy appears to be firing on all cylinders, but deal volume peaked in late 2015, and asset prices, while rising, are no longer growing at double-digit rates. Supply is a concern in some parts of the country, particularly in gateway markets, and rent growth has generally cooled, more or less tracking inflation. “Positive, but pedestrian rent growth” — of 1 percent to 2 percent — “will be the norm in many sectors,” according to Green Street Advisors’ Commercial Property Outlook for the second quarter. **THE END OF EXUBERANCE** By some accounts, a greater sense of normalcy is returning to commercial real estate now that interest rates are climbing from historical lows. In September, the Fed hiked its benchmark short-term interest rate for the eighth time since it began its normalizing policy in late 2015. “In some respects, we are moving back to a more normal market,” says Jim Costello, senior vice president at Real Capital Analytics. “The only reason that deal volume was growing at double-digit rates every year — as prices were growing at the same time — is that the falling interest-rate environment made it easy for buyers and sellers to come together on expectations. It was a kind of unnatural period.” How is the new normal — or rather, a return to the old normal — changing the calculus for investors? And with a greater sense of trepidation in the air, what property types and geographic areas are attracting capital flows from institutional and private investors? **INDUSTRIAL MIGHT** Among other things, the once-sleepy industrial sector has become a darling of investors. In what may be the homestretch of the current real estate cycle, industrial is outperforming many other sectors, largely because it is benefitting from one of the biggest disruptive forces of our time: e-commerce. And we are not only talking about the rise of Amazon.com Inc. Many traditional retailers are investing heavily in their e-commerce platforms, contributing to robust demand for warehouse and distribution facilities, especially those near major cities. E-commerce sales, according to Green Street, are growing at a much faster pace than sales tied to brick-and-mortar stores and will continue to do so over the next several years. Despite a high level of development activity, the industrial sector’s vacancy rate stood at less than 5 percent in the second quarter of this year, a historical low, according to a JLL report. Annualized rent growth was slightly more than 6 percent — or more than twice the rate of inflation. Strong transaction activity — driven by institutional investors’ acquisitions of entire companies and portfolios — has generally pushed up industrial property values, which rose by 11 percent during the 12 months ended in the third quarter, according to Green Street. In some of the country’s tightest markets, such as Los Angeles and Seattle, industrial properties are now fetching nearly as much as office properties on a square-footage basis — narrowing what has long been a wide pricing gap between the two asset classes, says Tim Lee, vice president of corporate development and legal affairs at Olive Hill Group, a Los Angeles–based commercial real estate investment firm. “Industrial is still very hot. Prices are coming up close to office asking prices. There has always been a huge gap in prices per square foot” between the two sectors, says Lee. **REDISCOVERING THE BURBS** As the cycle matures, investors are also turning their attention to suburban office properties — an asset class some assumed, in the years following the global financial crisis, might never make a full comeback. In the post-recession era, investors largely favored office buildings in central business districts, in part because they believed those assets would benefit disproportionately from the millennial generation’s oft-reported penchant for living and working in urban areas. During the past year, overall deal volume has declined in the office sector, with fundamentals generally “uninspiring as \[landlord\] concessions remain high and demand growth tepid,” according to Green Street’s Commercial Property Outlook for the second quarter. Yet single-asset sales of suburban office buildings are still at record-high volumes, and they are well above the pace of activity at the peak of the last cycle in 2007, according to Costello of Real Capital Analytics. “I thought the suburbs were dead,” he quips. The simplest explanation, he said, is investors are pursing higher yields in the burbs. But Costello believes there’s more to the story: Namely, a growing number of young adults are heading to the suburbs, and employers are keen to be near talent, which bodes well for demand. “Early in the cycle, it was all about wanting to own CBD office buildings because millennials are moving to the city, and they want to live, work and play” in urban markets, says Costello. “We’re 10 years from the last \[financial\] crisis, and a lot has changed along the way. One predictable thing that happened is everybody got older, and some \[millennials\] are starting to pair up and move to the suburbs,” he added. A Brookings Institution study released earlier this year found 2012 was the peak of the “back to the city” movement in the United States. Since then, suburbanization has picked up, as has a movement to rural areas and Snow Belt–to–Sun Belt population shifts, according to the study, which analyzed census data. The trend, however, notes Costello, “doesn’t mean that everything in the suburbs is suddenly golden.” Little appetite exists, he explains, for the 1980s-era “vintage” office building sitting at the end of an isolated cul-de-sac. But office buildings in what Costello calls “pockets of urbanity in the suburbs” — highly walkable neighborhoods with public-transportation options, shops and restaurants — have seen strong price appreciation, he said. **APARTMENTS BACK IN FOCUS** The search for yield is also renewing investor interest in multifamily properties. Apartments are among the most-attractive sectors for private-market investors, according to Green Street, which reports strong job creation is keeping rents growing in the face of supply pressures in many markets. “The reason we see a lot of interest in multifamily is that investors can get yield,” says Adam Hooper, co-founder and CEO of RealCrowd, a commercial real estate crowdfunding platform. “There are few options right now where investors can get consistent, healthy cash flow.” Class B multifamily properties are particularly attractive, notes Hooper, partly due to relatively limited supply. During the recent building boom, many developers have focused on more expensive class A buildings. “We’ve seen a lot of value-add multifamily lately,” explains Hooper. “You can find assets that had been mismanaged, or the previous owner didn’t have the capital for upgrades,” and make improvements to properties that will benefit from continued strong rental demand. To keep up with demand, the United States will need 4.6 million new apartment units by 2030, according to a 2016 study commissioned by the National Apartment Association and the National Multifamily Housing Council. The study found the apartment industry averaged 225,000 completions a year between 2011 and 2016 — falling short of the roughly 328,000 average yearly completions needed to meet demand. To some extent, the renewed interest in the apartment sector represents a flight to safety, says Lee of Olive Hill Group. Prices in the sector rose by 4 percent during the 12-month period ended in the second quarter, reports Green Street. “If we have a recession, companies can shrink down their office \[space\], but people still need a place to live,” he adds. “There’s still a strong appetite \[among investors\] for multifamily.” California is a notable exception, Lee adds. Earlier this year, many would-be apartment investors were sitting on the sidelines, waiting to see the outcome on Proposition 10. If passed in November’s midterm election, the ballot initiative would allow cities and counties across the state to expand rent control. **NICHE SECTORS GET THEIR DUE** On a national level, many investors have already expanded their horizons beyond apartments and other core property sectors. After years of rising asset prices, investors now have a “greater appreciation” for so-called niche assets, says Cedrik Lachance, Green Street Advisors’ director of REIT research. The trend is particularly evident in the public market, where REITs that own assets such as student housing, manufactured homes and storage facilities generally have been trading at a premium to their private-market asset values. The same cannot be said for REITs that own more-traditional property types, notes Lachance. “When you look at real estate that has the biggest discounts to private asset values, it’s the core sectors. Most niche sectors have been trading at a premium to asset values,” he says. “The public market,” adds Lachance, “is saying that prices are unduly inflated in sectors like office and much more palatable in historically noncore sectors.” **ADJUSTING TO THE NEW NORMAL** For private market investors, particularly those who are relatively new to commercial real estate, today’s market conditions take some getting used to, says Hooper of RealCrowd. That has meant coming to terms with less-robust return expectations and longer-term horizons for deals, which, ideally, will allow investors to ride out market fluctuations. “The return expectation hasn’t kept pace with the reality of where the market is today,” he says. “There’s a mismatch between return expectations and the reality of where we are in the cycle.” “The easier, value-add deals are fewer and far between,” adds Hooper. “You now have to look more closely at the \[investment\] manager, and how they’re approaching things differently” from the herd. **The smart money, says Larry Sullivan, president of Passco Cos., does not necessarily worry about what is happening today, or even tomorrow. Long-term investors, he says, should be thinking about trends — demographic and otherwise — that will drive real estate demand over the next decade. That’s the approach his Irvine, Calif.–based firm has taken since its founding in 1998.** **WHO IS GENERATION Z?** **Today, Sullivan and his colleagues are pondering such questions as: What attributes will come to define Generation Z — the demographic cohort following the millennials — and what are the implications for real estate demand?** **Millennials, for instance, may be content to live in tiny spaces, but members of Generation Z (an estimated 70 million people) may prefer apartments that can accommodate workstations, he said. The number of self-employed workers in the United States is expected to rise dramatically in the coming years.** **“It’s too early in the game to figure out what exactly this next renter cohort will want, but you have to start thinking about it,” says Sullivan.** **“The smart money has to consider what trends will drive demand, so that the assets purchased today are still viable eight to 10 years from now,” he adds.** **That kind of thinking led Passco — which shifted its focus 12 years ago from the retail sector to multifamily — to invest in the Southeast between 2006 and 2012. During that period, many other investors were focused on the two coasts. But Sullivan and his colleagues believed the Southeast was poised for strong population and job growth, driven by an influx of millennials as well as companies relocating from other regions owing to state-government incentives and other factors. His firm’s instincts proved right, says Sullivan.** **“We were trying to figure out where to buy \[apartment properties\], and we landed on the Southeast, partly because the yields were higher. More importantly, we felt it was a part of the country that would explode with jobs and population growth,” he explains.** **“We’ve harvested great gains from the investments we made between 2006 and 2012. We were smart — and we got lucky — to sense what we believed to be a demand curve and invest into it,” says Sullivan.** **A HEARTLAND RENAISSANCE?** **Passco is still bullish on the Southeast, but it is also keeping an eye on the Midwest, which might benefit from the Trump administration’s efforts to bring more manufacturing jobs back to the United States.** **“The U.S. coasts are still strong because of the affinity of capital” for those markets, says Sullivan. But “the Midwest might have a renaissance of a certain nature,” he adds. “That is a more-risky curve, and it has longer to play out, but it’s interesting to watch.”** Anna Robaton is a freelance business journalist based in Portland, Ore. *[Article on Real Assets Advisor](https://irei.com/publications/article/trends-real-estate-investing-growth-cycle-matures-decelerates-conventional-thinking-undergoes-revisions/)* **Categories:** Passco News --- ### [Passco Companies, An Influencer in Multifamily](https://www.passco.com/passco-companies-an-influencer-in-multifamily/) **Published:** October 29, 2018 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC The CEO and founder of Passco Cos,. Bill Passo, entered the real estate investment industry with the purchase of a single multifamily property in 1976. Passo was a true game-changer who was the first to present to the IRS the concept of the tenant-in-common investment structure. Under his leadership, along with a team of experts, Passco’s current multifamily portfolio includes approximately 40 properties and 13,000 units nationwide. While the company was founded 20 years ago with the niche investment strategy of acquiring retail properties in California, in 2005 – sensing the market climate and recognizing that an economic slump was approaching-it shifted its focus to multifamily. This redirection not only preserved its profitability, but it also greatly expanded its national presence and established Passco as a top name in the sector. Passco’s team has continued to follow the same smart, strategic, and realistic approach to investment in the years since this shift, remaining highly-focused on the multifamily investors have recently been overwhelmingly chasing yield to secondary and tertiary suburban markets, while this has been Passco’s primary investment strategy for the better part of a decade. Several years ago, Passco’s experienced team realized that the suburbs were slowly by surely attracting Millennials, and this would only continue to increase. knowing that many members of this demographic would not necessarily be able to buy a home in the near future, but still desired a high quality of liging and amenities, the firm began to target best-in-class assets in submarkets boasting exceptional school systems and experiencing strong population and job growth. The company has also strategically enacted a 10-year hold strategy for most of these properties. its success, in addition to the fact that many investors have followed suit, solidifies Passco’s place as a true pioneer. Recently the firm has been particularly bullish on the Southeast, acquiring approximately $1 billion in multifamily product, totaling more than 5000 units, in the region within just the last three years. The innovative and constantly-evolving company does not limit itself. By staying on the pulse of the industry, the company ensures that it does not miss a prime opportunity just because it is outside of Passco’s niche. For example, the firm is also pursuing value-add multifamily investments and standout opportunities in core markets. And with a total market value already in excess of $2 billion and growing, endless opportunities abound. This article was originally published in [Real Estate Forum’s October issue](http://www.reforum-digital.com/reforum/october_2018?pg=58#pg58). **Categories:** Passco News --- ### [Plenty of Opportunities in Texas: Q&A with Passco’s Gary Goodman](https://www.passco.com/plenty-of-opportunities-in-texas-qa-with-passcos-gary-goodman/) **Published:** August 24, 2018 **Author:** Synoptek Web Dev **Content:** Passco Cos.’ Gary Goodman recently spoke at Connect Media’s Connect Apartments Conference, which took place in Los Angeles. He’s also joining us in Texas on Aug. 23, for the upcoming Connect Texas Multifamily Conference. We asked Gary some Texas-specific questions about multifamily in Texas, and where it’s headed. **Q. What types of properties are investors interested in?** A. There has recently been heavy interest from investors in value-add multifamily opportunities across the country, and Texas is no exception to this. That said, we find that in many Texas submarkets where there is an ample delivery of new units, this strategy can be risky, as softening rent growth can make it increasingly difficult to maintain a significant delta between new and renovated units. At Passco, our strategy is to focus primarily on best-in-class, newly-constructed Class A multifamily properties within suburban areas with less development in the pipeline, in relation to job and population growth. Further, we are continuing to see increasing demand from residents for walkability – even in traditionally suburban areas. As a result, we are attracted to well-located properties within these submarkets that have nearby retail, restaurants, and employers. **Q. From a geographic perspective, what areas of Texas present the most opportunity to investors?** A. The state of Texas is presenting long-term multifamily investment potential primarily due to its strong employment growth. While the Dallas-Fort Worth market is experiencing the highest rate of job growth, some investors are approaching acquisitions with caution, as many properties are posting occupancies of 80%-85%. It is critical to evaluate the ratio of jobs to unit permits, not simply the number of jobs being added. For example, DFW is seeing four jobs per every unit in the pipeline, while the ratio in Houston is 12-to-1. Like with all real estate, multifamily in Texas is very submarket specific. We are seeing some of the strongest opportunities in Houston overall, but certain areas – such as inside The Loop –are showing signs of becoming overbuilt. Likewise, emerging areas in DFW may still present lucrative opportunities. Further, it is also important to look beyond these figures to the types of jobs created. For instance, in Austin there are fewer jobs per unit permits than in San Antonio, but much of the growth in Austin is white collar jobs, while in San Antonio it is blue collar jobs. **Q. What is your forecast for the state for the remainder of 2018 and into 2019?** A. Because of the strong growth projections, we anticipate that multifamily activity and prospects in Texas will remain strong into next year and beyond. Passco plans to continue to aggressively pursue acquisitions within Texas markets, closely monitoring development pipelines within specific submarkets. Currently, we believe that the Houston area will present the most multifamily opportunities that are in line with our suburban investment and long-term hold strategy. Fewer units are projected to be delivered in the market by 2020, but job growth is forecast to continue at high rates. **Categories:** Passco News --- ### [Roundtable: What strategies will make the retail centers of the future successful?](https://www.passco.com/roundtable-what-strategies-will-make-the-retail-centers-of-the-future-successful/) **Published:** July 10, 2018 **Author:** Synoptek Web Dev **Content:** Traditional retailers have taken a pounding the past couple of years, with the high-profile bankruptcies of Toys “R” Us, RadioShack Corp., Gymboree Corp. and Sports Authority, among many others. Meanwhile, the “bankruptcy watch list” includes the likes of J.C. Penney Co., Sears Holdings Corp., Burlington Stores and Stein Mart, all of which are said to be at risk of insolvency. Yet, Forbes reported in June that, despite the supposed brick-and-mortar retail plague, many traditional retailers continue to open and expand the sales of physical stores. Lululemon Athletica and Costco Wholesale Corp., for example, managed to drive double-digit comparable store increases, as well as robust e-commerce growth, and Ulta Beauty, the cosmetic products brand, is opening 100 new stores this year. We asked retail and real estate observers to give us their views on what retail centers must do to be successful in this age of e-commerce and rapidly changing consumer tastes. **Jeff Edison, chairman and CEO, Phillips Edison & Co.** The experiential economy is propelling the retail industry forward as brands introduce experiences that appeal to changing consumer preferences, and retail centers that can adapt will continue to thrive. Phillips Edison focuses on grocery-anchored shopping centers, which are uniquely experience-based in that they offer the everyday necessities that can’t easily be found online, creating the nucleus for local communities. We target leading grocers like Kroger and Publix specifically because these operators embrace new technology and constantly look for ways to stay competitive, ensuring their continued success. **James Cook, Americas director of research, retail, JLL** Shopping centers will succeed by targeting the specific needs of local families. Neighborhood centers can offer a robust mix of goods, services and dining, targeted to the tastes of the community. Not to mention easy access to online-order pickup. For regional centers, the more unique they can become, the more relevant a destination they will be. This can be achieved by adding locally operated restaurants and boutiques to the mix of national tenants, along with fun destinations like arcades, theaters and even location-based virtual reality. **Stacy Stemen, vice president of corporate marketing, Passco Cos.** Eat, experience and socialize! Those are the three main components to a thriving “future” retail center. Today’s consumers don’t want to shop at “regular” stores. The only apparel stores in your center must be trendy boutiques and retailers who make shopping into its own experience. In addition, and as the true traffic drivers, today’s consumers crave entertainment, participation and socializing with friends and family in unique spaces. You must outfit your center with eateries, fitness and entertainment. Even “farm to table” needs a culinary fusion twist, or better than a twist, craft cocktails and innovative food and authentic experiences. If you don’t adapt, you will become one of those “tired, dying shopping centers.” However, it’s an exciting and opportune time to add value to a destination-style center if you can create what your customers want — and, indeed, what they now expect! **Larry Taylor, founder and president, Christina Development Corp.** Retail is very much alive. Distilled down to its basics, retailing relies heavily on human contact. While the Internet has carved a portion of the retail market from “bricks and mortar,” the future net result will be an expansion of overall sales. The Internet introduces the broader population to goods and services otherwise unknown. Thus, the future is bright, as consumers seek out goods and services that can be purchased in an environment that provides entertainment and dining. Think Le Bon Marché in Paris — that is the concept that retail centers of the future will adopt to become successful. **Craig Zuelke, real estate advisory specialist for the Midwest, Wells Fargo Real Estate Asset Management** Successful retail centers will have a mutually supportive marketing relationship with their tenants. They will have a robust and efficient digital marketing effort that can integrate their tenants’ exact targeted promotions while promoting the overall center. Successful centers will offer both compelling price-conscious shopping and entertaining experiences with easy access. **Bryan Mick, president, Mick Law P.C.** Many retailers will not survive the “Amazon era.” The extinction of many retailers (Kmart, Best Buy, Sports Authority) is only the beginning. Retailers must rebalance brick-and-mortar, online and supply-chain investment to compete, suggesting a smaller, traditional retail footprint and stronger online fulfillment. Retailers will continue to move away from the power center and regional mall concepts to smaller-space factory outlet–type offerings or niche neighborhood pop-up spaces. Small neighborhood and community centers will continue to fare well with Amazon-resistant experience or service uses — such as local restaurants, hairstyling, dry cleaning, etc. **Merrie Frankel, president, Minerva Realty Consultants** Strategies that make retail centers successful include what are often cited: e-commerce resistant, necessity goods and experiential stores. Additionally, it is important to create a reason for shoppers to return often by frequently replenishing inventories and making shopping a fun treasure hunt that is not replicated online. This strategy has been successfully implemented by Ross Dress for Less, and the TJX Cos. — T.J.Maxx, Marshalls and HomeGoods. **Bill Shopoff, president and CEO, Shopoff Realty Investments** One strategy that will lead to success in retail centers is for tenants and landlords alike to invest in technology that will give customers a compelling reason to leave their home and go to the store. Creating unique in-store experiences will be key, with everything from store events to workshops to enhanced technology. Removing the use restrictions that preclude alternative uses is also key. Centers are transforming into entertainment destinations, not just as a place to shop, which will require a renewed mix of services, experiences and products. **Warren Thomas, managing member, ExchangeRight** Demographics, coupled with the deeply felt emotional and financial impacts of the last recession, will continue to drive consumers to retailer solutions that provide value. Coupled with consumer sentiments toward value and the U.S. population growing in moderate- to lower-income households, opportunities will be created for increased positions of discount retailers and necessity retailers and their products. These retailers will also remain less impacted by e-commerce trends. **Brian DeLucia, managing partner, Arrivato LLC** Retail is simply being reimagined for the next generation, as everyone looks for a bargain and the millennial population seeks experiences. This means we will see the continued trend of creating lifestyle centers and walkable master-planned communities, while utilizing evolving technologies to offer strategically timed bargains within the traditional retail environment. *This article was originally published in [Real Assets Adviser’s July issue](https://irei.com/publications/article/roundtable-strategies-will-make-retail-centers-future-successful/).* **Categories:** Passco News --- ### [CREW Network CEO: Gender Equality Studies Should Be “Required Reading”](https://www.passco.com/crew-network-ceo-gender-equality-studies-should-be-required-reading/) **Published:** July 6, 2018 **Author:** Synoptek Web Dev **Content:** RETS Associates’ new survey on gender equality in commercial real estate is in line with the findings of CREW Network’s benchmark studies over the past decade, national CREW CEO Wendy Mann (pictured) told Connect Media. She called studies such as the RETS and CREW surveys “required reading” for decision-makers at CRE organizations. Derived from a survey of 615 women in CRE, the RETS study found that pay inequity is the biggest issue facing women in the industry. With eight out of 10 respondents citing the salary gap, no other issue came close, although some media reports have focused on the problem of sexual harassment identified in RETS’ study. “This survey confirms what our research has shown,” said Mann. “We know that the CRE industry continues to lag in gender equity—across the board in C-suite and board positions, pay and opportunities.” Or, as Cushman & Wakefield’s Jennifer Hafner, president of CREW Inland Empire, put it, “Women have made great strides in the commercial real estate industry, but there is still room for improvement and greater diversity.” A 2015 CREW study identified an “aspiration gap” among women in CRE: 28% of women in the industry aspire to the C-Suite versus 40% of men. The most recent CREW study, issued in December 2016, cited a lack of support for women—both in the C-suite and at home—as the most common reason for this gap. The second most commonly cited factor in the aspiration gap was women’s belief that holding a C-suite position would adversely affect their commitments and responsibilities outside of work. CREW’s benchmark studies “provide the hard data and pinpoint areas where we need to improve, including mentoring and sponsoring women in our companies, and analyzing our hiring and compensation practices,” said Mann. “And, our recent white papers have highlighted how to identify unconscious bias and other barriers for women in the industry, and best practices of CRE companies who are getting gender equity right.” In Mann’s view, “these studies, surveys and publications should be required reading for all CRE leaders. Until CRE leaders understand what the market is telling them, they won’t understand what the problem is and how to solve it.” The bottom line, said Mann, is that “gender equity will come through a culture change first in companies, and then industry-wide. This kind of change that starts at the top of the organization has not happened. And the most important thing is that we know that gender diversity adds value to the bottom line in CRE companies. Studies have shown that companies with a gender diverse board, C-Suite and management are more profitable.” Passco Companies’ Stacy Stemen, president of CREW Orange County, cited the importance of mentorship and encouragement in overcoming gender bias. “It is important to encourage and mentor women to be confident, creative and courageous,” she said. “By having confidence in yourself, being creative in your approach and having the courage to ‘pitch’ yourself to colleagues and potential business partners, you will be amazed at the results,” she added. “Being a part of a strong network of other like-minded women and men, who promote the advancement of women in CRE, will help narrow the gender equity gap.” *This article was originally published on [Connect Media](https://www.connect.media/crew-network-ceo-gender-equality-studies-should-be-required-reading/?utm_source=mlCalifornia&utm_campaign=mlCalifornia-2018-07-06_15:30-CREW_Network_CEO_Gender_Equality_Studies_Should_Be_Required_Reading_&utm_medium=email&utm_term=united-states%20employment%20research&utm_content=CREW_Network_CEO_Gender_Equality_Studies_Should_Be_Required_Reading_&pid=c9a2c188-4ad6-4f1d-b4f8-0ec6144865b2).* **Categories:** Passco News --- ### [Investing in Multifamily: Challenges, Opportunities & Moving Forward](https://www.passco.com/investing-in-multifamily-challenges-opportunities-moving-forward/) **Published:** June 28, 2018 **Author:** Synoptek Web Dev **Content:** All five experts on the Investing in Multifamily: Challenges, Opportunities & Moving Forward panel at 2018’s Connect Apartments hold bullish views on the multifamily market. Yet, the future is not without challenge or uncertainty. ARA Newmark’s Curtis Palmer, who moderated the discussion, said the Costa Hawkins repeal – which qualified for California’s November ballot – is potentially the “biggest albatross over the investment horizon.” He notes, over the last 3 to 4 weeks, buyers and sellers are starting to express concern that it will tie up properties and they won’t be able to execute deals. Essex’s John Eudy agreed that the threat of Costa Hawkins is real, even though six to eight months ago most in the industry didn’t know what it was. Now, they understand it, and have gotten educated on what means to production and investment. It is on the radar, and he says the industry must push back and then find ways to produce low-end housing. He doesn’t see Costa Hawkins as a threat to Essex’s business, and predicts California will adjust to pre-1995, through its repeal will likely cause rampant litigation. Long term, he quietly hopes owners will panic and sell because it will create opportunities for them to buy. TruAmerica Multifamily’s Noah Hochman notes the company has been an active buyer with 27,000 units and 94 properties totaling $5 billion in acquisitions under their belts in the last five years. He equated the market in a golf analogy: “We’re on the back nine at this point.” The company’s focus is on the Class B workforce housing space. They focus on the middle market, which rents by necessity, not the luxury or new product type of renters. He says, the “demographics and fundamentals support our view,” of being right in the middle because those renters want safe, clean places to live close to work. Waterton’s Peter Kuzma points out they’ve been “creative in our approach to classic value-add” via a variety of investment vehicles. They’ve diversified and been “forced to be aggressive” because of the acquisition environment and competitive landscape. Waterton looks to help developers that need to get out of a mezzanine piece of financing as it comes due. Passco Companies’ Gary Goodman says, “We are cash-flow oriented, and focus on secondary and tertiary markets because cap rates were much better there.” He points to Passco’s investment approach in the Southeast where they “like the story in Florida,” based on immigration policies, jobs, lack of income tax, and the “demographics are solid.” Goodman says it has steered towards suburban markets because they think the trend of following Millennials into inner cores is too oversaturated. They look for suburban multifamily assets surrounded by single family residences, since homeowners typically won’t allow any other new projects to be built, so that limits the competition. If they can find a recently-built asset, “it’s gold.” They may even consider buying a just-completed project that’s 75% leased up, and go for a pre-stabilized execution financing, which is a strategy that’s worked well for them. In a discussion of buy versus build, Jamison Properties’ Garrett Lee says its strategy is to tap into the private investor and family office capital. The company actually likes urbanization and density plays. They do investments where “people want to live, work and play.” They look for projects where people can walk to where they want to go, which has involved properties in core areas such as Hollywood, DTLA or Koreatown. They’ve seen a resurgence in dense markets, where jobs and public transportation are, he says. But, Jamison will also look at other areas, like East Hollywood, since land prices have increased in Koreatown. Since the recession, Essex has built 8,000 units from 2007 to 2017. Eudy says, they’d rather develop than buy, since they can do a 5 or even 4.75 cap. He indicates, development is tough right now because costs are up 10% year over year for the third straight year. But, he points out, “we’re way undersupplied and we need to find ways to bridge the gap.” Yet, since the cost is the same for a luxury and affordable product, developers must find a way to bridge that difference in order to build affordable housing. ARA Newmark’s Palmer says population growth in California is up and projected to hit 50 million, but warned legislation can kill development and will create the exact opposite effect, by causing less housing to be built. Eudy pointed out that it will be difficult to make up for 40 years of nimbyism. Though legislators are trying to solve the housing emergency in California by getting more extractions out of developers. Waterton’s Kuzma predicts markets like Phoenix, Denver, Reno or Las Vegas will benefit from the regulations being forced on other states. He pointed out that “Section 8 doesn’t address the supply issue. Three million units are not going to magically appear overnight. \[You\] can’t legislate supply into markets,” he says. He suggests developers and housing agencies will need to do some “big bargaining” to create supply. He noted that housing authorities are bidding on projects now because there’s such a dire housing shortage. Lee says they are looking to solve housing issues by adding more density on site via density bonuses. Developers, for example, are allowed to build 35% more if they provide 11% affordable in a project in L.A. There’s also the transit-oriented construction incentive based program option as part of the JJJ measure in L.A., where developers receive an 80% bonus by providing 11-18% affordable. They can also explore strategies using in-lieu fees options. When queried about rate dislocation, Passco’s Goodman says he isn’t seeing it. But, he finds it interesting that they expected cap rates and pricing to go up after interest rates went up, but they are not seeing that occur. He says that’s mainly because there’s so much capital out there. The competition is up, so they’re having to reduce leverage to 55% to get the cash flow the company likes. He noted, “year one cash flow is key for us,” as a property needs to produce yield for investment to be safe. Kuzma pointed out that following its $1 billion allocation, the company envisioned a “kissing the ring” situation, but that turned out not to be the case due to so much capital in the market. Though he says, lately the “herd is thinning.” There used to be be 5 to 7 competitors in the best and final round, now it is just 1 or 2, he notes. TruAmerica’s Hochman says because of the “low cost capital we have behind us,” they JV with institutional capital and global capital now. Since there’s plenty of capital available, “investing in U.S. is still attractive for global investors compared to other options. They are in search of yield and stability.” He also notes, “multifamily is embraced now as an institutional quality asset class that’s more liquid and accepted institutionally and globally.” Coupled with the fact that investors have come to grips with lower returns “12% is better than zero,” he doesn’t see the investment-side demand “abating anytime soon.” He says, multifamily offers an attractive yield and is a safe investment, albeit with lower returns now. Passco’s Goodman questions the value-add strategy, especially if investors are worried about a recession, they may get stuck with an asset where they run out of capital to complete improvements. He says the returns investors get on value- add plays doesn’t seem worth the risk, especially since rents are lower than class A product, making it a “very risky” strategy in this environment. ARA Newmark’s Palmer suggested looking for value-add plays in properties built between 2003-2010, since those properties aren’t functionally obsolete, though may not have the new quality of what will be found in post-recession properties, such as amenities, finishes, etc. The value-add play is to add those to bring it up to level of post-recession assets. Essex’s Eudy noted a strategy they are deploying now is preferred equity deals, as a way to partner with developers and grow Essex’s portfolio. That allows them to get in on development opportunities, “a seat at the table to hopefully be in a position to buy and make 10-11% on the investment.” In a word of caution, Goodman says all the talk of recession is likely to create a drag on confidence. He points out it takes an event to create a recession, like the tech bubble or the capital markets crash in 2007, but he doesn’t “see anything on the horizon to suggest a problem” is imminent, because tenant demand and financing are on a really solid growth pattern right now. *This article was originally published on [Connect Media](https://www.connect.media/investing-in-multifamily-challenges-opportunities-moving-forward/?utm_source=mlApartments&utm_campaign=mlApartments-2018-06-28_16:00-Multifamily_Stars_Tertiary_Markets_and_Workforce_Housing&utm_medium=email&utm_term=news%20top-ca%20development%20financing%20multifamily&utm_content=Multifamily_Stars_Tertiary_Markets_and_Workforce_Housing&pid=8be954e9-f4f7-4140-9334-ff4fa22a98de).* **Categories:** Passco News --- ### [ICSC RECon Insights: The Hottest Product Types](https://www.passco.com/icsc-recon-insights-the-hottest-product-types/) **Published:** May 31, 2018 **Author:** Synoptek Web Dev **Content:** Connect Media caught up with the retail experts making the rounds at the recent ICSC RECon in Las Vegas. We asked them what product types are being seen most favorably, and their responses not only identified the opportunity sets they’re seeing, but also the investors who are best-positioned to take advantage of them. Watch the video below to hear insights from the following: Passco’s Alan Clifton CBRE’s Phil Voorhees Faris Lee’s Richard Chichester JLL’s Greg Maloney *This video interview originally published on [Connect Media](https://www.connect.media/icsc-recon-insights-the-hottest-product-types/?utm_source=mlRetail&utm_campaign=mlRetail-2018-06-01_20:30-Leadership_Insights_at_ICSC_2018_Where_are_Leasing_and_Sales_Volumes_Headed_&utm_medium=email&utm_term=united-states%20acquisition%20icsc%20retail&utm_content=Leadership_Insights_at_ICSC_2018_Where_are_Leasing_and_Sales_Volumes_Headed_&pid=3619c96c-f39f-4191-bc64-3cbcfba7dd57).* **Categories:** Passco News --- ### [Leadership Insights at ICSC 2018: Where are Leasing and Sales Volumes Headed?](https://www.passco.com/leadership-insights-at-icsc-2018-where-are-leasing-and-sales-volumes-headed/) **Published:** May 31, 2018 **Author:** Synoptek Web Dev **Content:** Connect Media joined the 40,000 or so retail-focused commercial real estate leaders in Las Vegas for the annual ICSC RECon conference. Beyond the extensive treks across the trade show floor, and in between the deal-making and networking events that carried on into the wee hours of the morning, we captured insights from retail leaders. Check out the video recap above to hear what Passco’s Alan Clifton (pictured), Faris Lee’s Richard Chichester, CBRE’s Phil Voorhees, and JLL’s Greg Maloney had to say about the prospects for leasing and investment volumes increasing in 2018. *This video interview originally published on [Connect Media](https://www.connect.media/leadership-insights-at-icsc-2018-where-are-leasing-and-sales-volumes-headed/).* **Categories:** Passco News --- ### [Leadership Insights at ICSC 2018: The Outlook for Retail](https://www.passco.com/leadership-insights-at-icsc-2018-the-outlook-for-retail/) **Published:** May 24, 2018 **Author:** Synoptek Web Dev **Content:** Connect Media joined the 40,000 or so retail-focused commercial real estate leaders in Las Vegas this week, for the annual ICSC RECon conference. Beyond the extensive treks across the trade show floor, and in between the deal-making and networking events that carried on into the wee hours of the morning, we captured insights from retail leaders. Check out the video recap above to hear what Passco’s Alan Clifton, CBRE’s Phil Voorhees, Faris Lee’s Richard Chichester and JLL’s Greg Maloney had to say about the outlook for retail in 2018. *This video interview originally published on [Connect Media](https://www.connect.media/leadership-insights-at-icsc-2018-the-outlook-for-retail/?utm_source=mlRetail&utm_campaign=mlRetail-2018-05-24_20:00-Leadership_Insights_at_ICSC_2018_The_Outlook_for_Retail&utm_medium=email&utm_term=united-states%20icsc%20retail&utm_content=Leadership_Insights_at_ICSC_2018_The_Outlook_for_Retail&pid=c9a2c188-4ad6-4f1d-b4f8-0ec6144865b2).* **Categories:** Passco News --- ### [Retail Deal Strategy: Zig When Others Zag](https://www.passco.com/retail-deal-strategy-zig-when-others-zag/) **Published:** May 21, 2018 **Author:** Synoptek Web Dev **Content:** Big deals tend to grab eyeballs simply because they are easy to spot and hard to ignore. But Passco Companies has recently adopted a slightly contrarian strategy of pursuing smaller retail deals. While the Irvine, CA-based commercial real estate investor still often completes larger-sized deals, it sees value in smaller retail properties that often get overlooked. Connect Media sat down with Passco’s Tom Downes to explore this small-center strategy in our latest 3 CRE Q&A. **Q: We understand Passco is zigging a bit when other CRE investors are zagging. What’s behind the company’s small deal strategy? A:** We think it is a smart strategy to work with brokers who are hungry for business, and cater to smaller centers that typically fall in the $1 million to $10 million range, too. That means finding centers that may be a bit dated, but are located on a strong corner and offer tremendous potential. We want to be able to come in and make a difference in the community by adding value with quality tenants and curating the right mix of retailers. So ultimately, our objective encompasses a bit of a revitalization effort to help breath life back into communities one small center at a time. **Q: What does that rebirthing process entail typically? A:** We start by looking at the demographics. We examine other centers in the area, and we assess the needs of the community. That might entail cleaning up the graffiti and giving these communities a needed face-lift. Our goal is to help build a thriving community through the reintroduction of a dynamic retail center that’s right for that area. We think of this as bringing the experience back into retail. **Q: How does the redevelopment approach change with smaller centers? A:** There are a host of opportunities to reposition and redevelop these smaller properties. Clearly, despite the challenges the sector faces, retail is changing, but NOT dying. Our approach involves looking for experience-driven retail. That means restaurants, outdoor shopping and dining, entertainment and experience, which we see as a shift from commodity retail product. This is especially true where Millennials are concerned. This approach is anchored on a “back to the fundamentals” perspective. We focus on good traffic counts, high quality trade areas and are targeting neighborhood retail vs. big box and power centers. We see consumers valuing convenience and quality over commodity products. As the retail landscape continues to evolve, we are looking to e-commerce resistant businesses, like food and fitness, rather than traditional retail. That requires an acute focus on tenant mix. *This article was originally published on [Connect Media](https://www.connect.media/retail-deal-strategy-zig-others-zag/).* **Categories:** Passco News --- ### [Fostering Employee Longevity in Today’s Career Environment](https://www.passco.com/fostering-employee-longevity-in-todays-career-environment/) **Published:** May 15, 2018 **Author:** Synoptek Web Dev **Content:** It was once an oft-recounted biography—an executive climbing the ladder in the commercial real estate industry and retiring at the same company where the ascension began. However, such is not frequently the case in the current climate, where employers regularly make a variety of changes to retain the best and brightest. Commercial Property Executive spoke with William Passo, founder & CEO of Passco Cos., about the factors that spur longevity in today’s workforce. Passo has witnessed countless changes in his 40-year career, half of which as head of Passco. **What are some of the factors that prompted the change in employee loyalty from workers seeking long-term positions with all the benefits that come with them, such as pension and seniority, to workers preferring a more transient professional lifestyle?** **Passo:** I am not sure workers are any more or less loyal than in the past. While employers used to provide pension plans that had vesting requirements related to longevity, today most employers offer 401K plans, if they offer anything at all. Those plans are portable and do not lock people in as the defined benefit pension plans of the past did. Also, I see young people today marrying later in life and planning their families at an older age than in past generations. Thus, the need for stability in the family situation, the ability to provide adequate housing comes later in life. People today seem to want to try things out before making a commitment and that goes for career choices as well as spousal choices. Thus, we see more movement in careers in the early stages of working lives. To some extent, the decline in unionization in the private sector can be a contributor to freedom of movement for workers who would like to expand their skills or change employers. I also suspect that, as workers improve their skills, they want to move up in the ranks when their current employer may not be able to provide an opportunity. Often, horizontal moves in employment result in higher income and additional opportunities for growth. **What are some of the aspects of Passco’s structure and culture that contribute to employee longevity?** **Passo:** It seems to me that members of the workforce are motivated by three things: security, lifestyle and recognition. Everyone from our “director of first impressions” to the CEO makes it a point to recognize someone who has completed or participated in an accomplishment. We utilize e-mail, notes, handshakes, pats on the back and verbal congratulations consistently. We support a work-life balance for the people of Passco that is supportive of and recognizes needs outside of the office and that those needs may require time off. We seek to empower people when given a responsibility and operate on a philosophy of “enlist and enroll” versus “command and control.” We encourage individual thought and creativity when dealing with the issues that matter and we support them in implementing their ideas and achieving success. Our support is a form of further recognition. Of course, people want to earn as much as possible, and I would guess our pay scale represents us well, especially since we have so many of our people participating in incentive programs and everyone sharing in year-end company profit through a cash distribution. We also celebrate the milestones of our employees who have reached five, 10, 15 and 20 years here with Passco with an impressive crystal award and a check. This year, we will be celebrating five 20-year milestones. **What are some of the aspects of today’s commercial real estate industry in particular that may or may not inspire long-term commitment?** **Passo:** Real estate as an industry appeals to a class of people that are more risk tolerant than some other classes. The industry offers people a way to take more responsibility for their own success. Whether in sales, leasing, management or development, people can earn supplemental income through commissions, profit participation or incentives and in most cases have some sort of a base income. By providing living base coupled with incentive compensation conditioned on successful performance, companies can attract and retain skillful people. When the company can demonstrate continued activity and success even in down markets, qualified people can feel secure in staying with the company even though their personal incomes, as well as company profitability, may decline during the down markets. However, those companies positioned to be sustainable in the down times are the ones that will deliver the greatest rewards in the good times. **How does this apply in Passco’s case?** **Passo:** In Passco’s case, buying continuously even during the Great Recession, and because the property portfolio is spread across 21 states, regional downturns do not have the negative impact that local companies may experience. A further benefit to Passco is allowing professionals in different parts of the country to stay close to home near one of Passco’s six regional offices. Proof of Passco’s success in creating an environment that cultivates employee commitment is in the numbers. Nearly 40 percent of Passco’s staff has been with the firm for more than 10 years. **To which factors do you attribute employee longevity at Passco and how do you plan to breed longevity among the Millennial and Gen X populations?** **Passo:** In addition to an environment conducive to an ideal work-life balance, we support longevity through the opportunities for growth that we offer and an active process of working with employees to determine their goals and support them every step of the way. By partnering with our employees through their career journey and planning process, we help them stay engaged—the key factor in loyalty and longevity, especially for our team members in the earlier stages of their careers. That said, it is critical to our success that we do this for each and every team member, including executives. Another way we drive success and longevity is through getting our employees at all levels outside their comfort zones through assigning them tasks that grow and refine their skills. When there is trust communicated from employer to employee, this is not scary, it is empowering. *This article was originally published on [Commercial Property Executive](https://www.cpexecutive.com/post/fostering-employee-longevity-in-todays-career-environment/).* **Categories:** Passco News --- ### [Passco Expands with Orlando, Florida Office; Adds Five New Team Members](https://www.passco.com/passco-expands-with-orlando-florida-office-adds-five-new-team-members/) **Published:** April 24, 2018 **Author:** Synoptek Web Dev **Content:** Passco Companies,a privately-held California-based real estate company that specializes in the investment, acquisition, development and management of commercial properties throughout the U.S., has announced that it is bolstering its presence in the Southeast with the addition of an Orlando, Florida office, and is expanding its team nationwide with the five new hires. “As we continue to drive our plan for growth forward in our 20th year, we are delighted to establish our seventh office in six states,” explains Larry Sullivan, President of Passco Companies. “With a current Florida portfolio of eight properties totaling nearly 2,400 units, we knew that Orlando was the ideal, central location for our next office. We look forward to deepening our relationships and expertise in the region as we continue to manage our existing portfolio and identify new opportunities in submarkets throughout the state.” The firm’s Orlando office will be spearheaded by seasoned property management professional Brooks Foy, who joins Passco as an Investment Manager from Greystar. In addition to Foy, Passco recently appointed four new team members across the firm’s departments and geographical regions, notes Sullivan. “We are honored to welcome these exceptional individuals to our team, who will all play critical roles in overseeing and expanding our portfolio,” says Sullivan. “We are experiencing rapid growth that has allowed us to bring on these five new team members within just one month, as we prepare for further expansion.” In his new role, Foy will be responsible for overseeing the management of a portion of Passco’s $2.5 billion investment portfolio, as well as play an instrumental role in strengthening the firm’s presence in Florida in conjunction with the establishment of the new Orlando office. Prior to joining Passco, Foy most recently served as a Senior Regional Manager with Greystar. He has also held positions with the Irvine Company, Elmington Property Management, and AvalonBay Communities over his 11-year career in the real estate industry. He holds a Bachelor of Arts in Business Administration and Management from California State University, Channel Islands. Joining Passco’s executive team out of its Dallas, Texas office is J. Alex Brown as Vice President, Realty Investments. Brown has nearly 15 years of experience in the real estate investment industry, in both the finance and asset management spaces. In his new role, Brown will oversee due diligence and financing for Passco’s acquisitions of multifamily and commercial properties nationwide, as well as transitional asset management. Brown most recently served as Director of Asset Management with Presidium Group, where he was responsible for the firm’s entre multifamily portfolio and successfully oversaw a total of more than $460 million in property sales and refinances. Prior to that, he held the position of Asset Manager with ORIX Capital Markets. He earned a Bachelor of Business Administration in Real Estate from Baylor University. Passco has also brought on an experienced multifamily asset management expert Nika Dufour to its executive team as Vice President, Multifamily Investments. She will be based out of the firm’s Atlanta, Georgia office. In her new role, she will oversee a portfolio of properties located in Georgia and South Carolina and supervise the continued development of policies, processes and procedures for the multifamily portion of Passco’s $2.5 billion portfolio, which totals nearly 12,000 units. Dufour has more than 15 years of real estate and finance experience with a focus on asset and portfolio management. Before joining Passco, Dufour served as Director of Asset Management at Gables Residential, where she was responsible for a portfolio of multifamily assets valued at more than $1.5 billion. She also served as Senior Director of Capital Markets and Finance at AvalonBay Communities. She holds a Chartered Financial Analyst designation, a Master of Business Administration from Tulane University in New Orleans, and a Bachelor of Chemical Engineering from the Georgia Institute of Technology. Joining Dufour in the firm’s Atlanta office is Stephen Biehle, an experienced real estate investment professional and Chartered Alternative Investment Analyst Designee. In his new role as a Senior Analyst, Multifamily Investments, he will work closely with Passco’s Multifamily Investments’ team to manage and evaluate the existing portfolio and identify areas for growth and opportunity. He most recently served as a Senior Underwriting Analyst at Walker & Dunlop and holds a Bachelor’s in Finance and Economic from the University of Nevada. The firm has also added Lino Lourenco as a Financial Analyst, Realty Investments. In his new role, he will be responsible for financial analysis related to the acquisition and due diligence of real estate assets, and will be based out of Passco’s corporate headquarters in Irvine, California. Lourenco has several years of experience in the investment management and analysis industry, most recently serving as a Financial Analyst, Portfolio Management with the Irvine Company. His previous experience also includes roles with Canterbury Consulting and Morgan Stanley. He holds a Chartered Financial Analyst designation and a Bachelor of Science in Finance from California State University, Long Beach. Passco’s team currently operates nationwide out of six offices in five states: Irvine, California; Denver, Colorado; Dallas, Texas; Austin, Texas; Littlerock, Arkansas, and Atlanta, Georgia. The firm’s Orlando, Florida office will open in Summer 2018. **Categories:** Passco News --- ### [Overlooked But Not Forgotten; Investors Shift Focus to Seniors Housing](https://www.passco.com/overlooked-but-not-forgotten-investors-shift-focus-to-seniors-housing/) **Published:** April 18, 2018 **Author:** Synoptek Web Dev **Content:** There has been a tremendous amount of focus on the Millennial cohort for the past several years. While many multifamily investors chase the highly paid Millennial workforce, many have overlooked the aging Baby Boomer population, as well as the growing demand and subsequent opportunity within this sector. Until now. In 2017, about 50 percent of the U.S. population was aged 50 or older, with Baby Boomers ranging between the ages of 53 and 71. Though this generation was recently surpassed by Millennials as the largest generation in U.S. history, the Boomers remain a massive demographic that will drive tremendous demand for seniors housing over the next several years. This is especially true as this demographic continues to age and average Americans live longer. At the top end of the Baby Boomer generation, individuals are reaching 71 years old, which fuels an immediate need for independent seniors housing facilities in the market. Looking ahead, an additional 10,000 Baby Boomers turn 65 every day, resulting in significant long-term demand for seniors housing facilities over the next several years. This demand is no longer unnoticed. Many investors are beginning to shift their focus to this growing rental market. In fact, 60 percent of investors plan to increase their portfolio size with seniors housing investments, according to a 2017 survey by CBRE. Passco has been extremely active in the multifamily sector for the past several years. We are finding deep value in capturing both ends of the rental market, from Millennials and Gen Z entering the market to Baby Boomers shifting into seniors housing. This strategy is further supported by fundamentals. Cap rates for multifamily properties, while still favorable, have dropped to the high fours, whereas cap rates for seniors housing are about 75 basis points higher than traditional multifamily. Baby Boomers also want to retire in style and are willing to pay a premium, in many cases nearly double the rents for Class A luxury multifamily product. These individuals are looking for seniors housing projects that provide a strong sense of community and feature a diverse variety of services and amenities. These include restaurant and meal services, on-site transportation, and organized events and activities like book clubs, arts classes, etc. The common misconception from an investment standpoint is that investors will incur significant costs, or need to hire more staff to accommodate the demand for these additional services and amenities. This isn’t always the case. There are a variety of opportunities for investors to partner with non-profit and service coordinators that will keep the costs of these services down, translating to strong, risk-adjusted returns for investors. Baby Boomers are aging, living longer and are willing to pay premium rents while aging in place. This translates to strong long-term demand and retention for seniors housing communities. While seniors housing may have been overlooked in the past few years due to a narrow focus on the younger Millennial cohort, many are now shifting their focus to leverage the tremendous opportunity available in the seniors housing sector. As this demand grows, we’ll see an increase in investor appetite for this product type. *This article was originally published in Western Real Estate Business’s April 2018 issue.* **Categories:** Passco News --- ### [A Look Back: Celebrating 20 Years](https://www.passco.com/a-look-back-celebrating-20-years/) **Published:** March 16, 2018 **Author:** Synoptek Web Dev **Content:** In looking back over the 20 years since I formed the Passco Companies, I am proud of the successes that the Company has achieved, the friends we have made, our impact on the alternative investment industry, and our success in helping people achieve their financial and growth goals. Some of the events and accomplishments of which I am most proud include seeing Passco named in the Orange County Business Journal as the County’s number 1 place to work based on independent employee surveys; being named as one of Orange County’s fastest growing companies three years in a row; being recognized in the Wall Street Journal for our successful Puente Hills Mall transaction which enhanced the reputation of the company as well as the entire alternative investment industry particularly in the area of utilizing fractional ownership interests in completing 1031 exchanges. Most importantly, I am grateful to the people who have made our growth and success possible. Nearly 40% of the people working for Passco have been with us for over 10 years. Many have moved up through the ranks to now be part of management. Some have moved on to greater opportunities where the skills they learned at Passco helped them achieve their goals. It has been gratifying to see my personal goal of making everyone who has ever worked for me or with me better off for the experience achieved with so many people. All of us at Passco can be proud that we successfully navigated the “great recession” when so many of our competitors failed. Now we have achieved a favored status in our industry and we have become the firm to consider and go to when the broker dealer and registered representatives have clients needing a 1031 exchange or other alternative investment. While we at Passco can all be proud of our record of achievement over the past 20 years, it speaks well that we have set a record for acquisitions, funding, and profits in each of the past three years as a result of our position of leadership in providing 1031 exchange opportunities in multi-family properties. Notwithstanding our success, to maintain success we recognize that change is a constant in the real estate business as in all other businesses. In anticipation of possible industry changes we have rekindled our focus on “value add” opportunities in class B and C multifamily; self storage; and strip retail. We have also launched our “ground up” development division and have three projects underway. Success in these efforts will further enhance the Passco’s financial success in areas outside of the 1031 exchange business. So as I reminisce over the challenges and accomplishments of the past 20 years, I am proud and somewhat humbled when I see that the Company now has over $2.5 billion in assets under management; over 5,000 investors; over 50 programs and properties that have gone “full cycle”; that we are recognized by Fannie Mae as one of their most favored borrowers; that we have grown to over 65 people in 6 offices nationwide and have been named in Inc. Magazine as one of the 500 fastest growing companies in the U.S. As a final thought, I am most grateful to my wife, Eileen, nicknamed “Magic”, who in the beginning spent long hours in the office organizing, encouraging, and doing whatever needed to be done to help launch our Company and who for 28 years has been my biggest fan. *This article was written by William O. Passo, CEO & Founder of Passco Companies, LLC.* **Categories:** Passco News --- ### [Sunpreme Partners with Blue Sky Utility and Passco Companies to Deploy 1.62MW Bifacial Solar Panels at Hanford](https://www.passco.com/sunpreme-partners-with-blue-sky-utility-and-passco-companies-to-deploy-1-62mw-bifacial-solar-panels-at-hanford/) **Published:** February 16, 2018 **Author:** Synoptek Web Dev **Content:** Blue Sky Utility, a California based renewable energy developer, and Sunpreme Inc., a US-based solar photovoltaic company and Passco Companies, a national real estate investment firm, are pleased to announce the completion of a 1.62Megawatt commercial rooftop solar system located on Hanford Mall in Hanford, CA. The system is the largest commercial rooftop Solar PV installation in Hanford and the largest solar system to be installed, to date, on a shopping mall in the state. The system is estimated to generate almost 3,000,000 kWh of clean, emission free electricity annually – enough energy to serve over 450 homes, while providing a centerpiece to the holistic approach to environmental stewardship. “There was only one panel design capable of meeting the energy production requirements within the constraints of available rooftop space, timeframe and cost efficiencies required for Blue Sky Utility. We chose Sunpreme Bifacial Panels once again for their higher lifetime energy production, proven product reliability and an outstanding warranty for a long-term investment. Over 1.62MW of Sunpreme Maxima GxB310/370 with bifacial advantage – were installed to meet the project requirements. This is our 3rd business project in collaboration with Sunpreme, with a unique business model, and they have demonstrated once again that they are a reliable and trusted partner, with innovative and truly professional customer support,” said Ran Bujanover, Founder and President at Blue Sky Utility. “Passco Companies is excited to be part of this industry leading project. The unique business approach that Blue Sky Utility implemented was a perfect fit for Hanford Mall. As stewards of the environment and an important part of the Hanford community, we’re eager to participate in a renewable project that creates triple bottom line impact,” said Joanne Doerter, General Manager of Hanford Mall. “We could not have envisioned such a long-term partnership with anyone other than Blue Sky Utility and Sunpreme, given their extensive expertise in applying renewable solutions to retail real estate settings,” noted Joanne. “We are privileged to have collaborated with Blue Sky Utility once again and with Passco Co. in making Sunpreme bifacial double glass panels available to their prestigious business project at Hanford. Sunpreme bifacial high performance solar panels are an industry game changer offering our customers a world-class product, with superior lifetime yields, and the safest long-term energy investments — backed by an outstanding industry-leading warranty,” said Surinder S. Bedi, Executive Vice President for Global Business Development, System Products and Quality & Reliability at Sunpreme. “These bifacial panels absorb light from both sides increasing energy yield (kWh) per kWp further combined with industry leading temperature coefficient, fire class rating A and with expected useful life exceeding 30 years. Through this project and many others, we are committed to provide best-in-class customer experience, thereby maximizing customers’ IRR,” added Bedi. **ABOUT BLUE SKY UTILITY** Blue Sky Utility is a unique renewable energy developer providing solutions for retail real estate landlords and tenants. Blue Sky Utility combines their extensive engineering knowledge with their financial structuring expertise to create custom solutions, providing tenants and landlords with programs that are both environmentally sustainable and value accretive. For more information, visit www.blueskyutility.com **ABOUT PASSCO COMPANIES** Celebrating our 20th Anniversary in 2018, Passco Companies, LLC is a nationally recognized market leader in the acquisition, development, and management of multi-family and commercial properties throughout the US. Passco has delivered sound investment strategies to clients and partners, enabling them to create, maintain, and add value to their portfolios through a full set of real estate services as well as property development and construction. Headquartered in Irvine, California, Passco currently has $2.5 billion assets under management and is involved with over 50 properties in 17 states. For more information, please visit www.passco.com **ABOUT SUNPREME INC.** Headquartered in California US, Supreme is a global solar photovoltaic company that designs, develops, and manufactures its innovative bifacial double glass panels utilizing a proprietary Hybrid Cell Technology (HCT), with efficiencies from 21.8% to 24%. These panels deliver the best cost performance value and outstanding warranty to clean-tech customers. Sunpreme’s Bifacial, Smart optimized panels are among the world’s most powerful, with STC outputs ranging from 310 to 510W before the bifacial boost, with superior product reliability and environmental stewardship. Sunpreme was ranked among the top three performers in the entire global PV market, and has won 7 of the top 10 rankings among thin-film PV products. Sunpreme solutions are deployed in 28 countries around the world. For more information, please visit www.sunpreme.com *This article was originally published on [PR Newswire](https://www.prnewswire.com/news-releases/sunpreme-partners-with-blue-sky-utility-and-passco-companies-to-deploy-162mw-bifacial-solar-panels-at-hanford---becoming-one-of-the-largest-rooftop-installations-on-a-shopping-mall-in-california-300600321.html).* **Categories:** Passco News --- ### [Passco Expands into New Product Types; Promotes Olsen and Wang to Senior Vice President of Sales as Part of Ongoing Growth](https://www.passco.com/passco-expands-into-new-product-types-promotes-olsen-and-wang-to-senior-vice-president-of-sales-as-part-of-ongoing-growth/) **Published:** February 14, 2018 **Author:** Synoptek Web Dev **Content:** Coinciding with the firm’s ongoing growth and expansion into new product types, Passco Companies, has announced the promotions of Adriana Olsen and Andy Wang to Senior Vice President of the firm’s Sales division, according to Belden Brown, Executive Vice President and National Sales Manager of Passco Companies. Passco Companies has focused on retail since its inception and has been extremely active within the multifamily sector for over the last decade. The firm plans to expand its portfolio this year into new product types including senior housing, industrial, and self-storage. “We’ve had a rich history in both the multifamily and retail sectors,” says Brown. “We’ve acquired more than 18,500 multifamily units and over six million square feet of commercial assets over the last several years, and in 2017, completed one of our most active years to date. As part of this continued growth, we are diversifying our portfolio and expanding into new product types while multifamily and retail will remain a core component of our investment strategy.” Brown explains that the firm’s in-place team will play a tremendous role in Passco’s ongoing growth and that these promotions are demonstrative of the significant value Passco places on Olsen and Wang and their ability to aid in furthering this momentum. “Adriana and Andy have continued to demonstrate their tremendous real estate expertise and continue to excel to new heights in all that they do,” says Brown. “They will be instrumental as we continue to expand our presence in 2018 and will drive our sales team forward.” In her new role as Senior Vice President, Sales, Adriana is responsible for raising funds for DST 1031 properties and other investment vehicles, as well as overseeing registered representatives throughout the nation. Prior to joining Passco 15 years ago, Adriana served as a licensed Real Estate Agent with Prudential Real Estate. Her qualifications include FINRA series 7, 22, and 63 licenses and she holds Bachelor of Arts degree from the University of Delaware. As a Senior Vice President, Sales, Andy is responsible for sharing accurate and detailed information regarding the company’s DST 1031 products, and builds and maintains strong relationships with broker dealers, clients, real estate agents, and other investors as well as being a principal for Passco’s Managing Broker Dealer. Andy is a graduate of Baylor University. Prior to joining Passco, he gained experience in financial advising and consulting with Wells Fargo and Morgan Stanley. He holds FINRA series 7, 24, 31, and 66 licenses. Both Adriana and Andy are active members of Alternative & Direct Investment Securities Association (ADISA). **Categories:** Passco News --- ### [Investment Trends: What's Driving Retail Deals Today?](https://www.passco.com/investment-trends-whats-driving-retail-deals-today/) **Published:** February 1, 2018 **Author:** Synoptek Web Dev **Content:** *Connect Retail West brought together more than 300 commercial real estate leaders for an information-packed conference at the Hurley Surf Club’s new retail experience at Pacific City in Huntington Beach, CA. The immersive afternoon overlooking the Pacific Ocean included three one-on-one conversations with top brands, two panel discussions and a retail trends keynote.* *Connect Media shared key takeaways from the conference’s one-on-one conversations and an in-depth report on neighborhood centers. Today we hear from the CRE investment panel that was moderated by Colliers International’s Michelle Schierberl.* Marcus & Millichap’s Bill Rose says the West Coast is a bit tighter from an investment perspective, while the Midwest is more open and on the East Coast, properties are getting 5% caps and no one is balking because they know it is quality real estate and well located. He notes, retail “always functions at the crossroads of population and income.” Rose pointed out some of the problems facing retailers today is structural to the sector, but in the case of some, like Toys ‘R’ Us, it is a case of their own debt becoming a big problem. CBRE’s Philip Voorhees believes the negativity clouding the retail space in 2017 will dissipate and 2018 will be viewed more positively. He believes the collaborative approach that surfaced in the 2017 holiday season between brick-n-mortar retail and the Internet will extend into the year. Rose asserted the retail marketplace has matured from days when retailers didn’t embrace the “web thing,” to a newfound embrace of the various ways online can “augment retail sales.” He cited the Kroger/Alibaba deal, and Target and Walmart’s zealous online sales efforts as evidence of the aggressive posture retailers are taking to combat Amazon these days. “There’s a tenant war going on,” says Rose. That’s one reason Passco’s Alan Clifton says it is wise to “focus due diligence on who owns a company and how well capitalized it is.” That could help avert problems down the road. Companies that don’t have the balance sheet to react and change according to challenges the sector faces, may “be in trouble,” he says. But beyond solid tenants with strong balance sheets, there are other ways to meet challenges the retail sector faces today. Clifton notes, markets once considered “taboo,” such as the Southeast, are in the investment mix today. That’s mainly because of the growth being experienced in markets like Savannah and its bustling port. These previously overlooked markets may provide investors with the yield they’re seeking, yet it is still “quality real estate.” To be sure, he notes, the appetite for investors has changed since the 2000’s,” especially pertaining to risk and yield. The pursuit of deals today may require a shift into “different classes of assets,” or making a geographic adjustment. In terms of markets, Voorhees says the Coastal markets tended to focus on appreciation as a goal, but there could be a strong case made now for exploring other markets in a push to “get better yield elsewhere.” Though he notes institutional investors are attributing risk to certain mall deals in the form of double digit cap rates, and he’s seeing a pull-back on power centers or properties in tertiary markets. There’s also been a shift in equity requirements that were in the 70-75% range in 2006-2007, but now are in the 50- 55% range, he says. Voorhees notes that retail properties may deliver some of the more intriguing investment opportunities today, simply because the sector is so dynamic and there are long-term plays worth exploring. For instance, he points out that malls were typically built at a low building to land coverage ratio, with the norm at 20-25% coverage. Even if a property struggles as a retail site, an investor could look at development options down the road in a longer-term land play. Rose agreed, noting a quest to find the highest and best use could include adding different uses such as multifamily, hotel, office or even industrial. *This article was originally published on [Connect Media](https://www.connect.media/investment-trends-whats-driving-retail-deals-today/?utm_source=mlCalifornia&utm_campaign=mlCalifornia-2018-02-01_18:01-Trepp_Report_CMBS_Delinquency_Rate_Continues_to_Fall&utm_medium=email&utm_term=news%20los-angeles%20development%20lending%20retail&utm_content=Trepp_Report_CMBS_Delinquency_Rate_Continues_to_Fall&pid=c9a2c188-4ad6-4f1d-b4f8-0ec6144865b2).* **Categories:** Passco News --- ### [The Frontrunner Slows Down](https://www.passco.com/the-frontrunner-slows-down/) **Published:** December 8, 2017 **Author:** Synoptek Web Dev **Content:** Multifamily is still the favored asset class in commercial real estate, but this year deal velocity and rent growth slowed. While multifamily core fundamentals remain strong—driven mostly by soaring demand that continues to grow—investors are making more thoughtful investment decisions. In October, the ALM Real Estate Media Group hosted RealShare Apartments, a national apartment conference in Los Angeles. Major players from across the country attended to discuss the market activity, and measured optimism was a driving theme in their commentary. “In 2017, we found less product available and a larger appetite to buy,” says Greg Campbell, senior managing director of acquisitions and dispositions at TruAmerica Multifamily. “We had this equilibrium of not enough supply and too much demand, which drove pricing up. Almost any group will tell you that they didn’t buy as much this year as they had planned to. Sales volume across the country is down about 20% to 30% on average. We will probably be off on our goal by 15% to 20% this year.” The theme of softness in certain markets dominates the multifamily conversation. Gary Goodman, SVP of acquisitions at Passco Cos. agrees that there is some softening in the market, but says that it is concentrated in urban core environments. “The basic supply demand fundamentals are very strong, but there are certain cities, particularly in the urban cores, that are somewhat soft,” he explains. “There has been a lot of new development in those areas, partially due to the fact that cities have done a lot to stimulate revitalization in downtown cores. The capital community has really drunk the Kool-Aid of the idea that Millennials want to live in an urban core, so there is a lot of capital that has been built in those areas as a result.” While rental growth may be slowing, demand continues to be strong, and that detail is very important to players in this asset class. With Baby Boomers and Millennials entering the apartment market, there is growing demand for rental housing. Slowing rent growth and growing demand seems to be the current dichotomy. “The pace of rent increases has clearly slowed,” says Ella Shaw Neyland, president of Steadfast Apartment REIT III. “There is an ability to increase rents initially and then there is a stabilization. The pace of the rent increases has slowed, but the demand has not.” Neyland says that there are 10,000 Baby Boomers turning 65 every day, 300,000 Millennials turning 22 each month and another 300,000 Millennials per month turning 23. These staggering numbers are ensuring a strong demand flow well into the future. That demand, of course, has also created a dearth of supply. Goodman quotes a national study out of Florida that estimates there is an apartment supply shortage of 4.6 million units nationwide. “Because of the demand from Millennials and Baby Boomers, some studies estimate that we will need 4.6 million apartment homes by the year 2030, and it will take 385,000 apartment units built each year to meet that demand,” he says. As a point of reference, the average number of units built between 2012 and 2016 was 244,000. This year will be a peak year with 350,000 new units, but beyond that it is expected to decline pretty dramatically because of the difficulty financ- ing new development. “That is why the fundamentals for rental housing are going to be very strong,” says Goodman. “It is very submarket specific and very market specific. On the demand side, it is well known that 18to 34-year olds are coming into their prime rental ages. Many of them are still underemployed and burdened with student debt.” This combination of high demand and softening rents and deal volume has left investors searching for opportunities in niche multifamily classes. For Passco Cos., the best opportunities are in suburban markets just outside of an urban core. “Many of the suburban areas around various cities are not overbuilt,” explains Goodman. “There is a certain amount of NIMBYism in those areas, especially for multifamily development. We have seen that in a number of suburbs where there is a real restriction on new development, and that has created a lot of investment opportunities for owners. It is kind of counterintuitive. Historically, the focus has been on building in the urban core, but it has really gone the other way.” TruAmerica has had a workforce housing strategy since its inception, and today, it sees a need for workforce housing more than ever before. “Early on in the cycle, we bought presale properties from the developer and we would take over the lease-up,” explains Campbell. “We haven’t been doing that lately because there are so many class-A properties delivering and the cap-rate discount isn’t as big as it used to be. We do try to be opportunistic. We are still focused primarily on workforce housing because we feel like there is a shortage of workforce housing. That is where we want to be.” The shortage of workforce housing is only growing, and Campbell says the occupancy rates for this multifamily niche typically exceed class A housing by 8% or more. “The only way that something becomes workforce housing is if a property ages into it. That is not happening at a huge rate, and it doesn’t make sense financially for people to build brand new B product. We feel like because there is not much supply of workforce housing it is a space we can be in for a long time,” says Campbell. “The rent disparity between class-A and class-B is still pretty great in almost every market we look in. We feel like there is still opportunity for us to see strong rent growth on the class B product—and it stays occupied.” Neyland agrees that the best opportunities are in what some are deeming the “urban suburban,” a market outside of the urban core but not in the deep suburbs. “If someone has a choice, they are going to choose to live in a cool city. I think that you are seeing migration out of some cities, because it is expensive to live there, but they still want a nice lifestyle,” she explains. “The concept that people used to have of the top 20 MSAs isn’t true anymore. Smart apartment owners are looking at cities where businesses are moving. Reno, NV is a great example of a small city where businesses are moving. Austin, TX is another good example. People today are saying that they don’t need to live down- town, but they can live in the loop downtown and Uber into the city core.” Each of these investors are seeing better demand, returns and rent growth in markets just outside of downtown areas. “Our view is that buying in the secondary and tertiary markets throughout the country is a better risk-reward statistic than buying in the gateway cities,” says Goodman. “What is happening in many of the gateway markets is that a higher percentage of income is required to pay rent.” In the markets where his firm is active, most residents spend 30% of their income on rent, however some reports show that residents living in the urban core are spending as much as 50% of their income. Those rising rents are pushing renters out into more suburban markets. “The affordability challenge is quite pronounced in large urban cities,” says Goodman. Neyland adds, “You are going to see some strata, but we’re moving into a more normalized increase in rents. It does have to be pegged to what people are making. Wage growth is the huge challenge for all of us. That is one of the reasons why you are not going to see double-digit rent growth.” Another issue pushing renters out of the core markets is the abundance of luxury housing, which has helped to fuel the double-digit rent growth to which some developers have become accustomed. “There has been an overabundance of luxury high-end apartments post Great Recession, so there is a natural competition for residents,” says Neyland. “That resident pool is very small, so you really need to have someone that is making enough money and has no desire to live anywhere else to continue those rent increases.” She expects that the slowed rent growth will make development more difficult in the next year. “Apartment owners need to be realistic about rent growth,” she explains. “Builders have penciled in pretty significant rent increases, and it made the construction costs work. The price of construction has really gone up. However, that’s going to be really challenging based on where rent growth is going to be—it will be healthy, but it won’t be double-digit growth.” As a result, she adds, “New construction will have a hard time penciling rents that will justify the cost associated with building.” Underwriting strong rent growth also helped to fuel increased pricing this year, at least for investors willing to take the risk. Many weren’t willing to estimate double-digit rent growth, and that contributed to the slowed deal velocity. “We remained disciplined this year. If there was an asset that we really liked, we would try to find a way to stretch a little bit more, but there were often other groups that were stretching a lot further,” says Campbell. “We found that the other groups that were winning the value-add deals, which is what we buy, were those that were willing to underwrite much higher rent premiums than the rest of the bidders. We tried to remain disciplined, and it might have lost us a few deals along the way—but we sleep well at night.” As a result, TruAmerica leaned heavily on industry relationships to find and source deals. “We buy both market and offmarket deals this year. We buy about 50% of our deals off-market,” he says. “Even on the listed deals, we tend to have a good relationship with the seller that gives us a competitive advantage.” In the next year, the firm will likely take on more bad-debt deals to secure acquisitions. “Over the next year or two, you’re going to need to be willing to assume debt, and it might not be as good as the debt that you could secure. Those are the deals that are available,” Campbell adds. “That is something that we are increasingly willing to do.” Uncertainty caused by the new Administration fueled much of the slowed activity, according to these investors. “The day after the election, interest rates bounced up 40 or 50 basis points, and a lot of sellers wanted to wait to see if interest rates would come down—which, of course happened,” says Goodman. “Additionally, there were a lot of buyers, like us, sitting on the sidelines because there weren’t any deals available. That first quarter was really a wipeout in terms of deal volume.” Taxation, especially, became an area of concern for potential sellers, and many accounting firms discouraged selling before the new tax plan was proposed. “The taxation issue was a big one this year,” adds Campbell. “I talked to a lot of owners that thought about selling this year but didn’t because they didn’t know how new tax policies would impact them. For a lot of private sellers, taxation is a driving force behind what they do, and I think it had a bigger impact than we can measure.” In 2018, the multifamily market should improve compared to this year, and no one is expecting a recession or a black swan event to topple the market. “For 2017, I think we’ll see sales activity in the multifamily market drop off from where it has been for the past two years. Having said that, 2016 was a record year and 2015 was a record before that,” explains Neyland. “The interesting thing about 2017 is that one of the reasons activity is down is because there were more portfolio transactions in the previous years and now you’re not seeing as much of that. You are also seeing fewer higher-end deals. You are seeing more increased liquidity in the more moderate housing market. Looking ahead, we will see the normal volume of transactions and the activity is still going to be strong.” Passco and TruAmerica predict that they will remain net buyers in the coming year, and are continuing to look for opportunities. Campbell, in fact, is hopeful that the firm will make up some of the acquisition activity it lost this year as a result of slowed growth. “We are selling selectively as well, and you will see us selling some assets every year going forward,” he says. “Next year, we are hoping that our portfolio will be back up to where we wanted it to be this year.” While investors are remaining cautious and thoughtful about the multifamily market, they are also remaining overwhelmingly positive about the future. Strong demand continues to drive opportunities in the market—in many geographic areas and price points. In 2018, the confidence is high that multifamily will remain the darling of the commercial market. *This article was originally published in [Real Estate Forum’s November/December 2017 issue](http://www.reforum-digital.com/reforum/november_december_2017?folio=38&pg=46#pg46).* **Categories:** Passco News --- ### [Checkout California: Stacy Stemen](https://www.passco.com/checkout-california-stacy-stemen/) **Published:** December 6, 2017 **Author:** Synoptek Web Dev **Content:** Stacy Stemen, Vice President, Corporate Marketing for Passco and President CREW-OC (Commercial Real Estate Women) on future real estate trends in OC and elsewhere. *This talk show originally aired on [OC Talk Radio](https://www.youtube.com/watch?v=AZTzn3QuuVU).* **Categories:** Passco News --- ### [ADISA Leadership Comments on House GOP Tax Plan](https://www.passco.com/adisa-leadership-comments-on-house-gop-tax-plan/) **Published:** November 8, 2017 **Author:** Synoptek Web Dev **Content:** Last week, House Republicans released a proposed tax bill, the Tax Cuts and Jobs Act, which seeks to enact the most significant federal tax reform since 1986. If passed into law in its current form, the bill would: - Permanently lower the corporate tax rate from 35 percent to 20 percent - Reduce the number of tax brackets from seven to four - Eliminate the alternative minimum tax and estate tax - Nearly double the standard deduction (from $6,350 to $12,000 for individuals, from $12,700 to $24,000 for married couples filing jointly) - Eliminate personal exemptions as well as state and local tax deductions (but allows for an itemized property tax deduction of up to $10,000) - Limit deductible mortgage interest on newly purchased homed to $500,000, down from $1 million - Repeal many other deductions, including those for medical expenses, tax preparation fees, alimony payments, student loan interest and moving expenses - Introduce a new 25 percent rate for pass-through entities such as LLCs, Sub S Corps and partnerships Of course, many across the nation breathed a collective sigh of relief that Section 1031 exchanges involving real property have been untouched by the House GOP plan. The Tax Cuts and Jobs Act will be presented to the House Committee on Ways and Means this week, and a vote in the House will potentially occur next week. “Although the overall tax reform process remains relatively fluid, the lack of repeal or limitation to real property Section 1031 like-kind exchanges for real estate owners in the recently released House plan is very good news,” said Larry Sullivan, president of Passco Companies and vice chair of ADISA’s Legislative & Regulatory Committee. “ADISA and our industry partners have worked diligently over the past several years to educate members of Congress and their staffs about the importance of 1031 exchanges, and we are certainly very gratified to see that our hard work has been well received.” Incoming 2018 ADISA president Keith Lampi, who is also president of Inland Private Capital Corporation, added, “The demand for real property Section 1031 exchanges has grown significantly over the last 10 years, and we are pleased that this powerful provision of the tax code, which supports job creation through increased transaction volume and liquidity in the general CRE market, has been preserved in the House GOP tax plan.” The next step in the process is the introduction of a companion bill in the Senate, which is expected to occur between tomorrow and early next week. Further changes could come in conference committee when/if the bills are passed in both houses before being submitted to President Trump. ADISA will remain a vigilant participant in the process as tax reform moves forward. “ADISA is pleased that the tremendous value real property Section 1031 exchanges provide the national economy has been recognized as we move forward in the proposed tax bill process,” said ADISA Executive Director/CEO John Harrison. “Over the course of nearly four years, beginning with our involvement in the original design of the two major industry studies which showed the great value of LKEs, members of our association and its leadership have fought hard to demonstrate the fiscal importance of like-kind exchanges especially involving real estate. We are glad those economic studies co-sponsored by ADISA and other industry organizations, which validate this importance, were taken into consideration by government representatives during the preparation of the proposed tax bill.” John Grady, ADISA president and partner with DLA Piper, said: “ADISA could not be more thankful to its hundreds of members that became involved in the protection of Section 1031 exchanges. Many professionals took the time to contact their Congressional representative to voice their concern for the protection of like-kind exchanges, became engaged in the conversation by educating themselves at our conferences throughout the year, and participated by distributing our educational booklet describing a Section 1031 exchange.” “A special thanks to Larry Sullivan and Catherine Bowman, vice chair and chair, respectively, of ADISA’s Legislative and Regulatory Committee and members of our board of directors, for their efforts to show the value of Section 1031 exchanges,” said Grady. Harrison added: “While we are very pleased with the outcome for Section 1031 exchanges involving real estate under this proposed tax bill, ADISA recognizes that others have been greatly affected and further changes may still be on the horizon. We will continue our efforts to bring to light this valuable economic stimulus and encourage everyone to stay involved and to keep up on education at industry events.” ADISA will continue to monitor the situation on behalf of its members and industry alike, and keep you informed as the situation progresses. *This article was originally published on [ADISA](http://www.adisa.org/news/current-news/leadership-comments-gop-tax-plan).* **Categories:** Passco News --- ### [Passco Ranked on 2017 Top 50 Owners](https://www.passco.com/passco-ranked-on-2017-top-50-owners/) **Published:** November 3, 2017 **Author:** Synoptek Web Dev **Content:** **Passco Companies, LLC Rank:** 47 **Total Portfolio Value:** $2 billion **Total Owned (MSF):** 9.8 **Multifamily Units Owned:** 10,870 **Average Occupancy:** 94.0% **Portfolio Diversity:** Multifamily, Retail **DIVERSIFICATION IS KEY** While geopolitical, macroeconomic and real estate market uncertainty contributed to a modest slowdown in commercial real estate transaction activity to start off 2017, volume picked up as the year progressed, with prices remaining high and cap rates and interest rates still at historic lows. Investors are becoming more selective as the cycle continues to mature, although with ample capital available there are still certain markets and property types attracting investment. The owners that topped the CPE-MHN 2017 Top 50 Owners ranking remain well diversified, as nine of the top 10 firms operate property in at least 5 separate asset classes. Clarion Partners took the top spot, with one of the highest portfolio values and total square footage in its owned portfolio. Tough competition for high-quality assets in the multifamily and office sectors, and the retail sector struggling with the impact of e-commerce, many real estate owners are looking to diversify their portfolios by investing in asset classes like industrial, self-storage and medical office to capture additional yield and long-term appreciation. Geographical diversification also played a key role for many of our top-ranked firms in 2017. Most of the top owners operate assets across the United States and internationally. The growing interconnectivity of global markets allows and encourages real estate owners to grow their portfolio overseas. As the current real estate cycle extends and many industry insiders question when the next downturn will occur, the leading owners should be well positioned to withstand a future market correction. **METHODOLOGY** The 2017 CPE-MHN Ranking of the Top 50 Commercial and Multifamily Owners utilized self-reported data for all firms. The ranking is a weighted formula based on a variety of factors (only a few of which are specified here), including the total square footage and number of units owned, owned portfolio value, historic performance and participation in property sectors, among others. The ranking represents what we feel is a logical balance between firm growth and market share, as well as property diversity. *This article originally published in [Multi-Housing News November 2017 issue](https://www.multihousingnews.com/post/2017-top-50-owners-2/).* **Categories:** Passco News --- ### [ADISA Honors 2017 Award Winners at Las Vegas Conference](https://www.passco.com/adisa-honors-2017-award-winners-at-las-vegas-conference/) **Published:** October 27, 2017 **Author:** Synoptek Web Dev **Content:** ADISA, the nation’s largest trade association for alternative and direct investment space, has announced this year’s winners of the organization’s A Champion of Excellence (ACE), Distinguished Service and President’s awards. The honors were presented during the welcoming ceremony at ADISA’s 2017 Annual Conference in Las Vegas. ADISA’s 2017 Annual Conference & Trade Show, the nation’s largest event for members of the alternative and direct investment space, brought together approximately 1,000 of the industry’s leading professionals for education, networking and the exchange of ideas. Larry Sullivan, president of Passco Companies, was presented with The ACE Award, the highest honor bestowed on a member by ADISA. This award is given to an organization or individual that has reached a pinnacle in their career, and has brought credit to themselves and ADISA through distinguished accomplishments. “ADISA is proud to honor Larry Sullivan, Greg Mausz, Mark Kosanke and DFPG Investments for their dedication and perseverance throughout the year that has led to substantial achievements for the alternative, direct investment industry,” said ADISA Executive Director and CEO John Harrison. “These recipients have all demonstrated a remarkable commitment to excellence and adhered to the highest ethical standards and quality performance, and we’re pleased to present each with their respective award.” *This is an excerpt from an article originally published on [Connect Media](https://www.connect.media/adisa-honors-2017-award-winners-at-las-vegas-conference/).* **Categories:** Passco News --- ### [Passco Makes 2nd DC Purchase for $113M](https://www.passco.com/passco-makes-2nd-dc-purchase-for-113m/) **Published:** October 2, 2017 **Author:** Synoptek Web Dev **Content:** Passco Cos. continues to expand its portfolio of more than 50 properties in 17 states with the purchase of The Parker, a 360-unit luxury community in Alexandria, Va. A joint partnership between AEW Capital Management and MRP Realty sold the Fairfax County property for $112.8 million. This marks Passco’s second acquisition in the Washington D.C. metro, following the purchase of The Shelby, a 240-unit community in 2016. Eastdil Secured represented both parties in the transaction. Chris Black and Caleb Marten of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing for Passco Cos. through Fannie Mae. **WELL-POSITIONED FOR GROWTH** Located at 2550 Huntington Ave., the community was built last year and features studio, one and two-bedroom floorplans. The asset had a 92 percent occupancy rate at the time of the transaction. Property amenities include two landscaped courtyards complete with gas grills and outdoor TVs, a swimming pool and sundeck, a virtual sport simulation room, a 24-hour fitness center, a bike trail and outdoor fitness station and a dog park and washing station. Huntington Metro Station offers direct connectivity to employment centers throughout North Virginia and Washington, D.C. Downtown is eight metro stops north of the asset. Employment hubs in the area include the Patent & Trademark Office, which is a 10-minute walk away and the National Science Foundation, which recently moved to the area, bringing around 2,400 new employees. “Fairfax County and the city of Alexandria both provide ideal multifamily market fundamentals,” said Gary Goodman, senior vice president of acquisitions at Passco, in prepared remarks. “The region features a combination of strong job growth, low vacancy rate, high-wage earning population and a minimal supply of competing multifamily assets. These are the key demand drivers we look for with any new acquisition.” Demand is also fuelled by Alexandria’s unemployment rate of 3.5 percent and new workplace facilities under construction. Moreover, Forbes Magazine recently ranked Fairfax County as the third wealthiest county in the nation, according to Goodman. The company plans to acquire more properties throughout the Washington, D.C. metro in the coming months. *This article was originally published on [Multi-Housing News](https://www.multihousingnews.com/post/passco-makes-2nd-dc-purchase-for-113m/).* **Categories:** Passco News --- ### [Luxury Still Pencils Out](https://www.passco.com/luxury-still-pencils-out/) **Published:** September 27, 2017 **Author:** Synoptek Web Dev **Content:** In December 2014, Houston-based PM Realty Group and its partner, National Real Estate Advisors, started construction on the Confluence, Denver’s then newest ultra-luxury high rise tower. Located at the confluence of the South Platte River and Cherry Creek, the for-rent 34-story highrise will fully open this fall. The project was started at a time when many multifamily experts said that luxury was starting to get overbuilt. A recent report from Harvard University says that most new supply is aimed at the upper end and that while there are indications that some luxury segments are becoming saturated, rental conditions in a large majority of metropolitan areas remain tight. Experts say that while many industry insiders continue to warn about luxury overbuilding, the term “overbuilt” is not even close to a word that should be used to describe the currently state of the luxury market. As a testament to this, Bryant Nail, EVP of PMRG, says the timing for the Confluence project was just right, noting that preleasing has been strong. In some ways, the multifamily luxury market has been a victime of its own success. Max Sharkansky, managing partner at Trion Properties, maintains that strong renter demand, coupled with steady rent growth, has fueled a multifamily construction boom in major metropolitan markets throughout the nation. “More than 80% of newly developed units in the largest US metros are luxury, mainly because it is cost prohibitive to develop anything less,” Sharkansky says. “As a result, there has been some speculation that the influx in new deliveries may potentially soften rent growth and generate higher vacancies.” And while the multifamily market has sustained strong demand for the past several years, the surge in new supply has definitely increased competition among properties in lease-up, especially in these major metropolitan areas, explains Sharkansky. “Some developers have even resorted to offering concessions to lure residents.” But developers are still looking to build luxury multifamily projects and are targeting supply-constrained, urban-core markets that have strong growth fundamentals, Sharkansky adds. “In Los Angeles, for example, demand for multifamily continues to outpace supply, driven by tremendous job growth and population gains. Many urban core markets \[Seattle, L.A. and Dallas\] have already demonstrated such strong demand that they’ll likely be able to absorb new inventory, albeit at a slower pace than before.” On the lending front, in the last year, banks have tightened construction loans because of fears about overbuilding, but not all lenders are following suit. Arixa Capital’s Jan Brzeski, managing director and CIO, recently told sister publication GlobeSt.com that the company is doing a lot more residential multifamily and multiunit for-sale housing, but still with an urban infill focus. “There is a need for more and better housing in these infill locations.” Brzeski added that the very high-end properties have had a lot of development in certain locations. “We like properties in more affordable markets and affordable price points. We’ve been doing B and C properties in B and C locations, but strong locations.” PMRG’s Nail believes there’s growing demand for luxury multifamily in urban areas throughout Denver. Access to the Riverfront Park area is in high demand due to its prime infill location. The firm’s Confluence highrise is located adjacent to the South Platte River and possesses views over Confluence and River Front Park. Other believers in the Denver market are CityView and the Dinerstein Cos. While the project is still early in the planning stages (with completion expected by the second quarter of 2019), a CityView/Dinerstein joint venture has proposed a class A, 350- unit development named Colorado Station that will replace an underutilized retail center that’s now on the site. It will incorporate a green-roof system, electric vehicle-charging stations, energy-efficient appliances and several other sustainable elements. Denver is ideal given the city’s increasing population, healthy lifestyle, proliferation of good jobs and the fact that housing there is simply in short supply, says Sean Burton, CEO of CityView. “These are the factors we look for when choosing where to invest our capital, and Colorado Station fits squarely in that strategy.” But it isn’t only Denver where luxury highrise is still working. PMRG is also starting construction on 330 Main, a 30-story building in Houston, this fall and is evaluating purchasing sites in Atlanta and Dallas currently. “We are focused on the major metropolitan areas in the southwest and southeast,” adds PMRG’s Nail. “Most all of these markets that we have studied have the necessary demographics to craft a successful project.” Nail says his firm hasn’t found a market that won’t work. Still, location may remain an issue because “sometimes we cannot find the site that will fit with what we think needs to be built.” Florida should also be on people’s radar, notes Bill Worrall, VP of FirstService Residential Florida. “In Florida, we’re seeing solid demand across the market at our luxury properties.” And while he says new development may have slowed down a little, overall, the market appears to have normalized. “That means buyers are still looking for luxury properties to fulfill their living, investing, and holiday vacation needs, especially in South Florida.” In South Florida, developers are taking a different approach to the luxury market than in previous years, Worrall observes. “We’re increasingly seeing buyers attracted to buildings and communities developed in conjunction with luxury brands like the Fendi Chateau Residences Miami, the Porsche Design Tower and the planned Aston Martin building in Downtown Miami. Communities like this leverage a brand’s recognition and lifestyle offerings to attract luxury buyers.” From a volume and inventory standpoint, Worrall also says he has seen developers in Florida begin to partner on luxury developments. “As the market has normalized, developers are taking steps like this to mitigate risk and avoid overextending. The result is, at least in Florida, fewer unfinished highrise buildings and more completed luxury communities.” Meanwhile, up in New York City, price points depend on location and convenience to mass transit, says FirstService Residential New York’s executive managing director, Robert A. Scaglion. He points out that the millennial population, which is the strong base of today’s renters, wants locations convenient to work on mass transit. “Walking to work is preferred, if affordable.” A prime Manhattan location would generate higher prices than new development in outer areas of Queens and Brooklyn, Scaglion says, but it only works for a certain price point. “The cost of land and construction makes building class B housing inefficient.” Developers, Scaglion continues, are looking outside prime Manhattan locations, at sites along transportation lines. “Brooklyn and Queens waterfront locations are already prime locations, so new development is taking place farther out in those boroughs.” Luxury is never overbuilt, he asserts. Instead, the word is overused. “People always aspire to the best they can afford,” Scaglion observes. “Old developments that don’t upgrade over time will serve to fill in the lower price points.” And when you pick a place that doesn’t have many luxury options, luxury works. That was the case with SALT Development, which is currently developing the 4th WEST project in Salt Lake City. “When we first looked at Salt Lake City, we discovered there were very few options for luxury multifamily,” says Thomas Vegh, managing partner of SALT Development. “In reality, the existing ‘luxury’ projects in Salt Lake City were not viewed as luxury by those coming from other large cities. We saw a terrific opportu- nity to provide a true luxury product for an underserved market in one of the fastest-growing cities in the country.” While 4th WEST is still being finished, SALT Development feels that it has already exceeded its own expectations of what they had hoped to achieve. “We opened the first phase of 4th WEST last November with rents 25% higher than our projections,” Vegh explains. “We are on track to stabilize by Dec 2017.” And the firm’s property management group reports 4th WEST’s prospect capture rate is one of the highest in the state, he explains. “It’s interesting to note that more than 60% of our residents originate from outside Utah, including employees for Goldman Sachs, Adobe and University of Utah research-related companies.” Gary Goodman, SVP of acquisitions at Passco Cos., says that there are specific submarkets where he is seeing an influx in luxury multifamily supply. However, it is not indicative of the luxury multifamily market as a whole. For example, he says, “we are seeing the most new development in urban-infill locations in gateway cities. Most of these cities have public policies in place that are encouraging development such as tax breaks and other entitlement incentives to promote revitalization. This influx in new development has also trickled down into some secondary markets including parts of San Antonio, Nashville, Austin, and Denver, among others. These specific submarkets have experienced rapid growth and expansion, creating an influx of new supply and competition.” He also notes that US suburban markets still have significant runway left and provide tremendous opportunity for investors. “These markets are often dominated by single-family home ownership, which has resulted in limited new apartment development as homeowners often try to protect their environments.” Goodman explains that if developers are able to find locations with high walkability scores such as near a town center, retail, restaurants and other entertainment, they will be able to develop properties that will garner strong demand and the opportunity for long-term rent growth. For those developers not sticking to a luxury focus, one of the other big trends is the flight to secondary markets. Steadfast Cos., for example, acquires class B properties in B markets—those so-called less desirable communities often overlooked by its peers. The company has also found that these class B communities often perform as well as, if not better than, their luxury counterparts. Ella Shaw Neyland, president of Steadfast Apartment REIT III, has previously said that primary markets with bustling downtown cores will always be in demand, but they will come at a cost; however, mid-tier properties in thriving secondary markets can accommodate the budgets of most “GenerationALL” renters. She also has said that secondary markets demonstrate robust population growth and proportionate unit supply and demand. Neyland shares that the most recent US jobs report highlighted that real wage growth (year-over-year) is about 1% and continues to be slow. Also, a significant number of people are working part time—the gig economy, she says. “This employment picture does not support the ability for most people to afford to live in luxury apartments, which is defined as the top 20% of monthly rent.” She continues to note that people paying too much for rent in some cities means less money for consumer spending, which accounts for 65% of GDP growth. “But it sets a great stage for well-located and well-maintained moderate-income housing.” Plus, the “urban myth” is that most people want to live downtown in urban cores, she says. “The constraint is price, and the draw has traditionally been walkability. But the walkability component is less important today with the convenience of Uber and Lyft.” Trion Properties’ Sharkansky says that his firm’s strategy has always been to focus on class B assets in primary markets such as Los Angeles, the Bay Area, San Diego and Portland, OR. “We view this as a better investment strategy and a cost-effective alternative to pursuing ground-up luxury development.” He continues that his firm seeks to acquire and reposition value-add multifamily in high-growth locations along the West Coast, “allowing us to deliver a high-quality, value-oriented alternative to new luxury construction.” As such, he continues, “our properties are not impacted by new luxury supply and have generated attractive risk-adjusted returns to our investors.” Sharkansky points out that by acquiring value-add product well-below replacement cost at an attractive basis, his company has been successful in repositioning class B assets and bringing rents up to market, thereby generating strong cash flow and risk-adjusted returns to investors. “At the same time, we’re able to provide residents with a more affordable alternative to new construction.” On the other hand, it can be quite challenging to develop class B or workforce housing, explains Passco’s Goodman. “The cost of construction for a class B property is relatively similar to the cost of a luxury multifamily community. Therefore, the cost of construction doesn’t justify the difference in rents, making class B properties much more difficult to pencil out.” And unless there are public policy changes, Goodman says he doesn’t anticipate an increase in class B development in the coming year. “Similar to the incentives offered for revitalization in inner cities, there will need to be some sort of incentive to encourage development in the class B or workforce sector for us to see a change in development.” As for what types of amenities are wooing renters, luxury developers are going to greater lengths due to the sheer volume of new units coming on line. Passco’s Goodman says that there is an amenities race taking place among luxury communities today. “These amenities are constantly evolving and becoming more and more sophisticated,” he says. “Properties that were constructed relatively recently, four and five years ago, are not as upscale as those built today. We anticipate this trend will continue over the next several years, meaning property owners and developers will need to be cognizant of this and work to keep up with the most up-to-date amenities in order to attract and retain tenants.” Speaking of amenities, a recent survey from the National Multifamily Housing Council showed that 82% of renters view fitness centers as the most important amenity. Developer Cortland Partners, which has 40,000 apartment units nationwide, includes on-site gyms as part of each of its community revamps and also provides residents of 27 communities with access to Fitness on Demand classes like Zumba, P90X, spin classes, yoga classes, circuit training and boot camp-style classes. Cortland Partners has also taken a unique approach to meeting that need, recently hiring Dr. Karl Smith—also known as Dr. Fitness in Cortland circles—to head the design of residential fitness and wellness programming. And to keep tenants satisfied for higher renewal rates, Cortland offers a variety of innovative amenities that residents welcome even if they never realized they needed them. Residents enjoy everything from garbage ‘valets’ to 48-hour service guarantees to courtesy move-in assistance such as picture-frame hanging, unpacking and more, the company says. FirstService’s Worrall says that in today’s luxury market, amenities are a key differentiator. “Buyers are looking for services that enhance their lifestyle and make them feel safe. We see increased buyer and renter interest for luxury properties that offer high-end fitness center and spa amenities with on-site programming (e.g., trainers, massage services, etc.). We’ve also seen an increase in interest from buyers, especially international buyers, in properties that offer their residents increased peace of mind through amenities like semi-private elevators, advanced security technology and well-qualified, around-the-clock security staff.” In addition to amenities, Worrall says that what attracts luxury renters is really location. This in turn is “driven by the lifestyle they want to lead. Whether it’s a condo that offers waterfront views and quick access to the beach, or a downtown loft that’s a short walk to the office, shopping and nightlife, buyers are looking for the location that best matches up with the lifestyle they want to live.” And today’s buyers are much more sophisticated in their knowledge of the financial aspects of the community they would like to live in as well, explains Worrall. “Luxury buyers are taking the time to review the association’s budget, its reserves and its governing documents to ensure each community has a strong financial foundation. Communities with strong reserves and a healthy budget typically attract more luxury buyers, because there is often a smaller chance of special assessments being levied in the short term.” *This article was originally published in [Real Estate Forum’s September 2017 issue](http://www.reforum-digital.com/reforum/september_2017?pg=44#pg44).* **Categories:** Passco News --- ### [Passco Ranked #4 Fastest-Growing Private Companies by OCBJ](https://www.passco.com/passco-ranked-4-fastest-growing-private-companies-by-ocbj/) **Published:** September 18, 2017 **Author:** Synoptek Web Dev **Content:** In life, in lists, it’s rough to do apples-to-apples comparisons. In culling our weekly lists of every business silo and subsilo, of firms of all ownership forms and makeups, we have several goals: to compile as comprehensive and accurate a roster as possible; to produce features on the best and the brazen; and to analyze beyond a comparison of numbers. As an editor wrote one sentance ago, “It’s very difficult to do apples-to-apples comparisons.” But one can’t help but be struck by both the statistical anomaly of this year’s Business Journal list of the fastest-growing privately held firms and tha kangaroo sales leap by the Class of 2017. For trivia buffs, as with last year, we found exactly 157 small, medium and large private companies that met our main metric: at least 15% sales growth over the two years starting on June 30, 2015. Promise. Didn’t fix the total. Our excel spreadsheet is infinite. Of course there are always a few companies we don’t uncover and a few that chose to stay undercover – please tell us if you know members of either group. That said, this years’ group of cheetahs put on the afterburners, growing sales by 90% versus last year’s 66%, when the cover photo was a cheetah. The Class of 2017 grew jobs by 30% versus 38%. Why the sales leap? In a moment, some ideas. Also, know the sprinters are ranked by percentage increase in sales. Our research team, led by Dana Truong, also provides companies’ employment numbers, not our metric here but surely good to know. By now you may know that I’m a fan of business maxims and precepts: “Follow the Money,” “Follow the Lawyers,” and “Follow the Growers.” We believe this list of fastest-growing private companies highlights our local businesses, industries, and niches of opportunity, for everyone from job seekers to vendors to investors. Passco Cos. in Irvine is No. 4 with about 121% growth, $684 million in sales. Impressive for any firm, more so in that Bill Passo started buying commercial real estate 41 years ago. “Just a high-energy person,” the philosophy major told me this summer. “Always have been. As long as I can add value to my company…” Passo’s idol is Gen. William Lyon, 94, of William Lyon Homes. **Two-year Revenue Growth:** 121.4% **Revenue for the 12 months ended 6/30/2017:** $684 million **Revenue for the 12 months ended 6/30/2016:** $481 million **Revenue for the 12 months ended 6/30/2015:** $309 million **OC Employees as of 6/30/2017:** 52 **OC Employees as of 6/30/2016:** 52 **OC Employees as of 6/30/2015:** 47 *This article was originally published in Orange County Business Journal’s September 18-24, 2017 issue. Passco’s revenue reflects the 12 months ended December 2016, 2015, and 2014, respectively* **Categories:** Passco News --- ### [Texas Multifamily Investors Focused on Dallas, Tertiary Markets](https://www.passco.com/texas-multifamily-investors-focused-on-dallas-tertiary-markets/) **Published:** September 5, 2017 **Author:** Synoptek Web Dev **Content:** Texas markets are meeting a healthy demand for multifamily housing from millennials who are reaching renting age and baby boomers who are downsizing, while attracting investment from around the United States. “The millennial cohort is just coming into the rental pool,” said Gary Goodman, senior vice president of Passco Cos., an Irvine, California–based acquirer of Class A multifamily properties. “That’s a huge demand factor.” Millennials, unlike previous generations, are delaying marriage, children, and homebuying while showing a penchant for living in an urban, multifamily setting. “You’ve got a barbell effect—the millennials on one end and the baby boomers on the other, creating demand,” Goodman said. “The prospect looks terrific.” Goodman was one of several panelists at a recent Dallas ConnectTexas Multifamily conference, which provided a statewide perspective on the multifamily market. While panelists noted some challenges emerging in major markets, they said that fundamentals were generally strong with higher cap rates possible in tertiary markets such as Midland-Odessa, Waco, and Lubbock. **Strength in Dallas Metro** Among major markets, Dallas remains one of the most active multifamily markets in the nation, with an estimated 24,000 units expected to be delivered this year, behind only New York City, which is projected to deliver 27,000 units. Houston was scheduled to deliver 17,000 to 18,000 units by the end of the year, but that was before Hurricane Harvey devastated the region. Austin also ranks among the top ten markets nationally for expected multifamily completions in 2017. “Texas is a very attractive market for people to live in,” said Laurie Baker, senior vice president of fund and asset management for Camden Property Trust, a Houston-based real estate investment trust (REIT) that invests in apartments nationwide. Camden operates nearly 20,000 units in Texas, which represents about 37 percent of its portfolio. “We are very bullish on Texas—Houston, Austin, and Dallas,” Baker said during the conference, which occurred before Hurricane Harvey made landfall. Baker noted there has been softness in the Houston market where renewals are flat, and property owners are offering concessions to compete with other property owners. Camden has also offered concessions at a downtown Dallas property and said that rents in Austin have slipped below budget. Shortly after the conference, Camden reported minor hurricane damage to the company’s apartment communities in Houston and Corpus Christi, but said that all communities were operational. Tony Ferrell, vice president of portfolio operations for the Bascom Group, a private equity firm that acquires value-add properties for short-term holds of three to five years, said the company has an aggressive renovation strategy and recently bought properties in San Antonio and Round Rock, north of Austin. The Round Rock acquisition was “a great deal and an eyesore when we bought it,” Farrell said. “We redid the interiors, and it is leasing like gangbusters.” He said Austin, however, has been a bit difficult “to pencil \[out\] and find a deal that makes sense.” Doug Banerjee, managing director of Greysteel, a Washington, D.C.–based transactional commercial property adviser in the value-add space, said that about 37,000 multifamily units will be delivered in Dallas between now and the end of 2018. While absorption remains strong, rent growth has flattened, he said. Still, with strong absorption, he expects to see rent growth return in the next year or two. In comparison, only 14,000 units are expected to be delivered in Houston during the same time period as construction there slows. Carrington Brown, executive director of investments for San Antonio–based USAA Real Estate Co., said the investment firm owns 11,000 multifamily units, 25 percent of which are in Texas. With supply elevated in most major markets, investors and developers can expect debt to be harder to come by as banks become more selective on multifamily financing, he said. Scott LaMontagne, managing director of the capital markets group, multifamily, for JLL, said that Texas can expect to see a breather on supply next year in places such as Austin, San Antonio, and Houston, with Dallas the exception. **The Attraction of Tertiary Markets** While some softness in major markets exists, investors are closely eyeing tertiary markets where cap rates can be significantly higher than those in the major metro areas. Hugh Cobb, principal with Alpha-Barnes Real Estate Services, an Atlanta-based multifamily investment, acquisition, and development firm, said that Midland-Odessa is one of the state’s strongest tertiary markets, even with oil below $50 a barrel, as oil companies continue to drill and invest in the oil-rich Permian Basin. Waco, home of Baylor University, is also a strong tertiary market, with a 95 percent occupancy rate. Killeen-Temple, home to Fort Hood, relies heavily on the military base and is a weaker market as is Abilene, which has seen occupancy decline to 90 percent from 92 percent a year ago, Cobb said. Shravan Parsi, co-CEO of Austin-based Napa Ventures, said he has tracked the Corpus Christi market for the last 18 months and likes what he sees there: an expanded port, a growing medical center, an expanding Texas A&M University campus, and a vibrant petrochemical industry. The investment company will buy two assets in Corpus Christi this year, he said. Lubbock also has strong investor interest, noted Matt Wideman, transaction manager for Dallas-based ARA, a Newmark Co., who noted that the company has 20 offers on a Lubbock portfolio. Investors can get cap rates in the 5s and 6s on Class B and C properties in a variety of Texas tertiary markets compared with 4s on Class A properties in Dallas, panelists said. Buyers who were very active in Dallas in recent years are now chasing yields in smaller markets. “It’s amazing to see how many people are looking \[at Texas markets\] from all over the country,” Wideman said. “You can sell a 12-unit deal in California, a 1031, and get 100 units in Amarillo. It’s amazing what is happening,” he said. “There are deals to be made.” *This article was originally published in [Urban Land Magazine](https://urbanland.uli.org/development-business/multifamily-investors-shifting-tertiary-markets-texas/?utm_campaign=magazine&utm_content=60201849&utm_medium=social&utm_source=twitter). The property pictured above is not owned by Passco Companies, LLC.* **Categories:** Passco News --- ### [Passco Hires Brett Johnson to Bolster Investment Activity in Midwest, West](https://www.passco.com/passco-hires-brett-johnson-to-bolster-investment-activity-in-midwest-west/) **Published:** August 21, 2017 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC a privately held Calif.-based real estate company that specializes in the investment, acquisition, development and management of commercial properties throughout the U.S., has announced the addition of Brett Johnson as the firm’s new Vice President of Acquisitions for the West and Midwest. Johnson will be based in the firm’s Denver office. The new appointment coincides with Passco’s ongoing growth and its goal of reaching $1 Billion in acquisitions by the end of the year, doubling the firm’s acquisitions from the year prior, according to Larry Sullivan, President of Passco Companies. “We have been extremely active in growing our portfolio in multiple markets across the country,” says Sullivan. “In fact, we recently surpassed $2 billion in assets under management.” He explains, “Brett will play a tremendous role in continuing this momentum and spearheading the acquisitions process on behalf of Passco, especially in the West and Midwest regions.” In his new role, Johnson will take the lead in identifying, sourcing, underwriting, negotiating and acquiring assets that are well-aligned with Passco’s long-term acquisition strategy, according to Gary Goodman, Senior Vice President of Acquisitions. “Brett has nearly twenty years of industry experience, especially within the multifamily sector,” says Goodman. “This depth of experience and expertise will be instrumental in successfully driving our future acquisitions efforts forward.” To date, Johnson has been involved in closing more than $5 billion in institutional multifamily transactions. He first began his career at Archstone and was an integral part of their acquisitions team for ten years. Prior to joining Passco, he held positions at UDR, Inc., a multi-billion-dollar multifamily REIT, JRK Investors Inc., a private multifamily owner and operator with more than 32,000 multifamily units, and Milestone, a private real estate investment management company. He graduated with a degree in Business from Miami University and holds a MBA in business with a specialization in finance from the University of Denver. **Categories:** Passco News --- ### [Passco Trades Remaining Interest in KS Property for $48M](https://www.passco.com/passco-trades-remaining-interest-in-ks-property-for-48m/) **Published:** August 16, 2017 **Author:** Synoptek Web Dev **Content:** Passco Cos. sold The Village at Lionsgate, a 360-unit community in the Kansas City submarket of Overland Park, Kan. The buyer already owned a portion of interest in the asset and purchased the remaining interests in the property for a net sale price of $48 million. ARA Newmark Kansas City Vice Chairman Mac Crowther represented both the seller and the buyer in this transaction. Located at 14631 Broadmoor St., The Village at Lionsgate provides easy access to Interstates 35 and 435, Corbin Park Shopping Center, Overland Pointe Marketplace, Town Center Plaza, Urban Air Overland Park and B&B Theatres Overland Park 16. Situated in the Blue Valley School District, the property is near Lakewood Elementary and Middle Schools, Blue Valley West High School, Sprint Campus, Honeywell Federal Manufacturing & Technologies and Cerner Innovations Campus. The community features one-, two- and three-bedroom units. Amenities include: - business center - billiards room - clubhouse - fitness center - gazebo with picnic tables - coffee bar - patio/balcony - swimming pool - barbecue grills **LONG-TERM STRATEGY** Passco brought the asset full cycle after a nearly 10-year hold period. “We initially acquired the asset prior to the recession, successfully operated it as cash flow positive throughout the downturn and sold it, achieving returns that were within our initial projections,” said Passco COO Alan Clifton, in a prepared statement. The sale of this asset was also timed to capitalize on strong investor interest in the region. During ownership, Passco brought the average occupancy of the multifamily asset up to approximately 95 percent and achieved steady net effective rent growth. **Categories:** Passco News --- ### [U.S. Needs 4.6M New Apartments by 2030](https://www.passco.com/u-s-needs-4-6m-new-apartments-by-2030/) **Published:** June 12, 2017 **Author:** Synoptek Web Dev **Content:** Delayed marriages, an aging population and international immigration are increasing a pressing need for new apartments, to the tune of 4.6 million by 2030, according to a new study commissioned by the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA). It’s important to note that: - Currently, nearly 39 million people live in apartments, and the apartment industry is quickly exceeding capacity; - In the past five years, an average of one million new renter households were formed every year, which is a record amount; and, - It will take building an average of at least 325,000 new apartment homes every year to meet demand; yet, on average, just 244,000 apartments were delivered from 2012 through 2016. Based on research conducted by Hoyt Advisory Services and commissioned by NAA and NMHC, the data includes an estimate of the future demand for apartments in the United States, the 50 states and 50 metro areas, including the District of Columbia. For the purposes of this study, apartments are defined as rental apartments in buildings with five or more units. The data are available on the website [www.WeAreApartments.org](https://www.weareapartments.org/). The increased demand for apartments is due in large part to: - **Delayed house purchases**. Life events such as marriage and children are the biggest drivers of home ownership. In 1960, 44 percent of all households in the U.S. were married couples with children. Today, it’s less than one in five (19 percent), and this trend is expected to continue. - **The aging population.** People ages 65-plus will account for a large part of population growth going forward across all states. The research shows older renters are helping to drive future apartment demand, particularly in the northeast, where renters ages 55-plus will account for more than 30 percent of rental households. - **Immigration.** International immigration is assumed to account for approximately half (51 percent) of all new population growth in the U.S., with higher growth expected in the nation’s border states. This population increase will contribute to the rising demand for apartments. Research has shown that immigrants have a higher propensity to rent and typically rent for longer periods of time. “We’re experiencing fundamental shifts in our housing dynamics, as more people are moving away from buying houses and choosing apartments instead. More than 75 million people between 18 and 34 years old are entering the housing market, primarily as renters,” said Dr. Norm Miller, Principle at Hoyt Advisory Services and Professor of Real Estate at the University of San Diego. “But renting is not just for the younger generations anymore. Increasingly, Baby Boomers and other empty nesters are trading single-family houses for the convenience of rental apartments. In fact, more than half of the net increase in renter households over the past decade came from the 45-plus demographic.” “Apartment rentals are on the rise, and this trend is expected to continue at least through 2030, which means we’ll need millions of new apartments in the U.S. to meet the increased demand. The western U.S. as well as states such as Texas, Florida and North Carolina are expected to have the greatest need for new apartment housing through 2030, although all states will need more apartment housing moving forward,” said NAA Chair Cindy Clare, CPM. “The need is for all types of apartments and at all price points.” There will also be a growing need for renovations and improvements on existing apartment buildings, which will provide a boost in jobs (and the economy) nationwide. Hoyt’s research found that 51 percent of the apartment stock was built before 1980, which translates into 11.7 million units that could need upgrading by 2030. The older stock is highly concentrated in the northeast. “The growing demand for apartments – combined with the need to renovate thousands of apartment buildings across the country – will make a significant and positive impact on our nation’s economy for years to come,” explained NMHC Chair Bob DeWitt. “For frame of reference, apartments and their 39 million residents contribute $1.3 trillion to the national economy. As the industry continues to grow, so will this tremendous economic contribution.” Other highlights from the report include: - Demand is expected to be especially significant in Raleigh, N.C., with a 69.1 percent increase in new apartment units between now and 2030, Orlando, Fla. (56.7 percent), and Austin, Texas (48.7 percent). Also notable, the demand in the New York City metro area will call for an additional 278,634 apartment units, Dallas-Ft. Worth, Texas (266,296 new units), and Houston, Texas (214,176 new units). - Propensity to rent is higher in high-growth and high-cost states. - Hundreds of thousands of new rental units will be needed by 2030 in states such as California, Georgia, Arizona, Florida, North Carolina, Nevada, New York, Texas, Virginia and Washington. In conjunction with the study’s release, the website [www.WeAreApartments.org](https://www.weareapartments.org/) breaks down the data by each state and 50 key metro areas. Visitors can also use the Apartment Community Estimator – or ACE – a tool that allows users to see the trends in their state or metro area to determine the potential economic impact locally. *This article was originally published on [NMHC.org](http://www.nmhc.org/News/US-Needs-4-6M-New-Apartments-by-2030-to-Keep-Pace-with-Demand/).* **Categories:** Passco News --- ### [Passco Picks Up Another Florida MF Asset](https://www.passco.com/passco-picks-up-another-florida-mf-asset/) **Published:** June 1, 2017 **Author:** Synoptek Web Dev **Content:** Irvine, CA-based Passco Companies acquired Pearce at Pavilion, a 250-unit Class A multifamily community in Riverview, FL, located southeast of Downtown Tampa. The apartment community was purchased from a joint-partnership between two Miami-based companies, Adler Group and Mattoni Group, for $49.7 million. This is Passco’s third multifamily acquisition to close in Florida in the last month, and brings the firm’s holdings to more than 2,000 units throughout the region. The property is located at 3603 Pavilion Palms Center, near the convergence of Interstate 75 and U.S. Highway 301. Passco Companies’ Colin Gillis said, “We are very focused on all major metropolitan areas throughout Florida. Nowhere are we seeing such progressive economic growth than we are here.” JBM Institutional Multifamily Advisors represented the seller. Chris Black of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing for the buyer through Fannie Mae. *This article was originally published on [Connect Media](https://www.connect.media/passco-picks-up-another-florida-mf-asset/).* **Categories:** Passco News --- ### [Passco Acquires Space Coast Property](https://www.passco.com/passco-acquires-space-coast-property/) **Published:** May 22, 2017 **Author:** Synoptek Web Dev **Content:** Passco Cos. acquired The Haven at West Melbourne in West Melbourne, Fla. for $53.3 million. The 336-unit community is a best-in-class asset with a history of high occupancy and rental rates, and is currently 95 percent occupied. The purchase represents Passco’s second acquisition in the Space Coast in the past half year. The Haven, located at 4550 Explorer Drive in West Melbourne, includes a number of common-area amenities including a resort-inspired pool and sundeck, business center, sand volleyball court, children’s play park and yoga center. Passco intends to initiate an array of capital improvements at the Class A property. Among them will be a clubhouse renovation and a transformation of the pool to include new, contemporary furniture. Also undertaken will be an installation of an outdoor kitchen and cabanas, addition of new state-of-the-art equipment in the fitness center and the incorporation of fresh landscaping elements across the property. Conservation-friendly toilets and shower heads will be installed in an effort to enhance sustainability. “By integrating these key upgrades, we will be able to further drive rents and strategically position the asset for long-term growth,” said Colin Gillis, vice president of acquisitions for the Southeast at Passco Cos., noting lack of key upgrades to date has not impacted occupancy rates. “We continue to seek assets with strong upside potential in dynamic markets that are poised to perform well over time.” As it continues to enjoy swift job and population expansion, the Space Coast – home to America’s space and aeronautical industries and a hub of Florida STEM (Science, Technology, Engineering and Math) jobs — has become one of the Southeast’s most rapidly-growing regions. The area population is anticipated to surge another six percent in the next half decade. Among employers expected to add STEM jobs are Harris Corp., Northrop Grumman and Lockheed Martin. All of those employers are located within seven miles of The Haven. Not far away is also I-95, a major link connecting West Melbourne to the submarkets that encircle it. Among those submarkets is Orlando, the home to organizations employing thousands, among them Walt Disney World, Florida Hospital and Comcast. “The property will not only benefit the local Melbourne economy, but also from the demand drivers of its surrounding submarkets,” added Gillis. “As these markets continue to expand, The Haven will be at the center of this growth, providing long-term stability for the asset and continued demand for many years to come. This rapid expansion and ongoing growth will also result in increased property values, and strong rent growth over the next several years. In fact, YTD rent growth in the Space Coast is the highest in all of Florida at nearly ten percent, which is more than double the national average.” Jay Ballard and Ken Delvillar of Cushman & Wakefield’s Orlando Capital Markets Multifamily Advisory Group represented the seller, Flournoy Cos. Chris Black of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing for Passco Cos. through Fannie Mae. *This article was originally published on [Multi-Housing News](https://www.multihousingnews.com/post/passco-acquires-space-coast-property/).* **Categories:** Passco News --- ### [The Other South Florida Sees $53.5M Multifamily Sale](https://www.passco.com/the-other-south-florida-sees-53-5m-multifamily-sale/) **Published:** May 15, 2017 **Author:** Synoptek Web Dev **Content:** Springs at Estero, an institutional grade, class A, 260-unit multifamilycommunity in Southwest Florida, has traded hands. Passco Companies acquired the multifamily asset for $53.5 million. The brand new, stabilized multifamily property is in the submarket of Estero within the Fort Myers/Cape Coral MSA. According to Passco’s research, the Southwest MSA has added more than 55,000 jobs in the last two years, and its population grew by more than 22,000 people from 2015 to 2016. The Southwest MSA is also consistently ranked as one of the fastest growing regions in the US with an unemployment rate hovering around 4.7%. “The region is surrounded by a diverse range of employment hubs, has remarkable population growth, high barriers to entry, and a very limited multifamily development pipeline,” Colin Gillis, vice president of Southeast Acquisitions at Passco Companies, tells GlobeSt.com. “This strongly positions the asset for long-term growth and will drive increased resident demand over the next several years. The limited multifamily development in the region will also create an opportunity to effectively grow rents as the market will not easily become over saturated by an influx of new multifamily development.” Located about five miles from the Southwest Florida International Airport, the multifamily community is located near a diverse range of major employment hubs including Florida Gulf Coast University, Gulf Coast Medical Center and a variety of Fortune 500 companies. Gills is betting the Estero submarket and the Southwest area of the state as a whole continue to expand, attracting new business, new jobs and new people from across the country. “Hertz Rental Cars, with more than 150 locations worldwide, recently relocated its corporate headquarters to the region,” says Gillis. In addition, the Florida Gulf Coast University is continuing to expand with enrollment surpassing 14,500 students and a faculty of over 500. The relocation of major companies such as Hertz to the region, coupled with the growing population of students and faculty will continue to drive demand for the property over time.” Constructed in 2016, Springs at Estero features a resort-style swimming pool with an expansive sun deck, a community clubhouse featuring: Wi-Fi, a coffee bar, fireplace and a catering kitchen. The multifamily community also features a 24-hour fitness center and a poolside summer kitchen, among many other amenities. “The strength of this asset was demonstrated by the property’s initial lease ups. It outperformed similar class A product throughout the region in terms of both speed and rental rates,” says James B. May, chairman and CEO at JBM Institutional Multifamily Advisors, the brokerage firm involved in the deal. “It is truly a class A asset that will continue to deliver value over time.” May represented the seller, Continental Properties, in this transaction. Chris Black of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing for Passco Companies through Fannie Mae. *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/jenniferleclaire/2017/05/15/the-other-south-florida-sees-53-5m-multifamily-sale/).* **Categories:** Passco News --- ### [Passco Nabs Inland Empire Value-Add Retail Center](https://www.passco.com/passco-nabs-inland-empire-value-add-retail-center/) **Published:** May 11, 2017 **Author:** Synoptek Web Dev **Content:** Passco Cos. acquired Temescal Village, a 102,976-square-foot neighborhood shopping center in Corona, Calif., for $17 million. The company plans to reposition the 1983 asset by integrating a series of capital improvements and experience-driven amenities. Dixie Walker and Charley Simpson of Cushman & Wakefield’s Irvine office represented the seller, a private investor, in the transaction. Located at 1181-1199 Magnolia Ave., just off Interstate 15, the retail center is currently 93.5 percent leased to 19 tenants, including CVS Pharmacy, Citibank, Carl’s Jr., Wells Fargo, H&R Block, the UPS Store, County of Riverside and Metro PCS. Passco plans to redesign the landscaping and the exterior, as well as add outdoor dining and seating areas for social gathering. Architecture Design Collaborative will oversee the center’s facelift. “In doing so, we will be able to increase foot traffic to the center, as well as attract and retain high-quality retailers,” said Todd Siegel, Passco’s vice president of retail acquisitions, in prepared remarks. “This will drive the long-term value of the asset and allow us to grow rents as leases roll. Many of the current tenants have been located at the center since the 1980s and have rents that are well-below market value, providing a strong opportunity for upside potential.” Passco entered the tight retail market with Fannie Mae acquisition financing secured by Chris Black of KeyBank Real Estate Capital. At the end of 2016, the immediate Corona retail market had a vacancy rate of 4.4 percent, according to Siegel. He also noted this is one of the lowest vacancy rates they have seen throughout the region in the Inland Empire, Orange and Los Angeles counties. “Temescal Village is an asset that is truly positioned for future upside and growth,” said Walker, in a prepared statement. “It has proven stable cash flow, a diversity of credit worthy tenants, and is located in a market with an established trade area. The region experienced a much quicker recovery post-recession compared to other areas in the Inland Empire, which is indicative of the future economic health of the region, strongly positioning the asset to continue to perform well over the long-term.” *This article was originally published on [Commercial Property Executive](https://www.cpexecutive.com/post/passco-nabs-inland-empire-value-add-retail-center/).* **Categories:** Passco News --- ### [A Cautious Step Forward](https://www.passco.com/a-cautious-step-forward/) **Published:** May 9, 2017 **Author:** Synoptek Web Dev **Content:** Uncertainty surrounding the political climate led to a softening in retail investment toward the end of last year, and so far, 2017 is not much better. The year’s investment activity got off to a shaky start, with investment sales experts at odds as to whether the situation will improve. “We predict that 2017 will be very active on the investment side, given that many 10-year loans from the previous boom mature this year,” declared Anthony Blanco, director of investment sales for The Shopping Centers Group. InvenTrust Properties Corp. CFO & chief investment officer Michael Podboy takes a more tempered view. He anticipates overall transaction volume will be flat to down in 2017, despite a higher volume of investment opportunities than currently in the marketplace. However, he thinks sellers will see the long end of the yield curve and re-enter the market. “The sellers have been taking a wait-and-see approach versus flooding the market,” noted Margaret Caldwell, a managing director in JLL’s Capital Markets Group. That’s in sharp contrast to the anticipated extremely busy start to the year. Preliminary numbers from JLL show that 2016’s total retail transaction volume was $65.6 billion, and despite transaction volume being down slightly in the beginning of 2017, the firm anticipates strong liquidity in desirable retail product throughout 2017. Meanwhile, however, a number of notable big-box retailers have continued to close stores, driving continued uncertainty, pointed out SRS Real Estate Partners senior vice president Pierce Mayson. He also expressed concern about how the recent increase in interest rates will impact the retail real estate market. As usual, though, there are positive sides to both circumstances: GBT Realty Corp. CFO Geren Moor observed that while increased interest rates may slow the pace somewhat, it means the market won’t get overheated—good for retail in the long term. And Blanco, who represents a center in which two notable retailers—hhgregg and Family Christian Store—are closing, pointed out that because the property is dominant in its market, the closings present an opportunity to bring in tenants that drive more traffic at equal or higher rents. SRS also has buyer clients seeking properties with boxes that can be backfilled, Mayson said. **The institutional offload** Properties going to market have a common theme: Most are quality assets in secondary and tertiary markets or Class B properties in primary markets, according to Caldwell. Investors seeking core product aren’t as lucky, though: There is an extremely limited supply of trophy assets available relative to demand. “Investors aren’t undertaking full overhauls of their portfolios, although there has been a continued focus on trimming properties that are not a fit,” Blanco said. “Quality over quantity has been the message since the recession.” The culling is creating opportunities for investors like GBT with value-add acquisition platforms, particularly in secondary cities, Moor noted. This is further bolstered by publicly traded REITs leaving these markets because Wall Street wants them to focus on primary markets. Institutional owners will likely continue to siphon off the bottom tier of their assets throughout the year and recycle the capital into more core opportunities, particularly high-quality, irreplaceable retail assets, Mayson said. **The year of the grocery anchor?** Move over, rooster—2017 may be the year of the grocery-anchored center. A large swath of investors is chasing the asset class due to the traffic generated by supermarkets and the overall impression that they are safer places to park capital. Properties in primary markets find themselves with a huge list of interested investors, Caldwell noted, including institutions and publicly traded REITs. In the suburbs, that list whittles down to private buyers and public and private REITs. Caldwell’s team is selling a grocery-anchored property in the Atlanta suburbs that has attracted significant interest from more than 100 investors, whereas last year it may have received just 80 inquiries, she said. And SCG is preparing to bring to market a Publix-anchored shopping center in Tampa called Northbay Commerce Center; Blanco expects that property to receive substantial attention, as well. But investors want power centers, too. Overall, capital is focused on well-located properties that will survive changes in the retail landscape, according to Caldwell. Investors remain concerned about retailers filing for bankruptcy protection or closing stores, and cap rates have increased to account for this type of retailer risk, primarily in malls and some power centers. “We do not think these retailer issues are driven by less consumer spending, but instead as a result of tired retail concepts that are not meeting the demands of today’s shoppers,” she pointed out. Despite the increased risk, investors still want power centers, as the 150-basis-point cap-rate spread between grocery-anchored and power centers is enough to entice them, Blanco said. They are particularly attracted to properties with fitness, entertainment and medical tenants. Passco Cos. is not a big fan of commodity retail and seeks Internet-resilient mixes of experience plus personal and medical services, according to retail vice president Todd Siegel. The company is in the process of acquiring a grocery-anchored center in Corona, Calif., and plans to re-tenant with quick-serve eateries, upper-end hair and nail salons, and personal and medical uses. He noted that there is still some caution about power centers in secondary and tertiary markets due to increased exposure to larger tenants—some of which are reconfiguring store sizes and adapting to omnichannel models. While the Internet still accounts for just a small portion of retail sales, its growth is faster than that in brick-and-mortar stores, and it has decimated some categories, including clothing, books, office supplies and sporting goods, he said. (The U.S. Department of Commerce noted that e-commerce accounted for 8.1 percent of sales in 2016, an increase of 15.1 percent, while total retail sales volume grew 2.9 percent year-over-year. “In some cases, this means smaller stores,” Siegel said. “Furthermore, power center tenants are typically tied together through co-tenancy clauses, and the loss of one tenant could trigger reduced rent periods from others.” While financing is strong for shopping centers, it remains extremely challenging for malls anchored by the likes of beleaguered JC Penney and Sears, as well as stores that depend on their co-tenancy, Caldwell said. Lenders are reluctant to refinance malls with low store sales unless there’s an opportunity to reposition through the addition of different uses, such as multifamily, or conversion to an open-air center. **Investors’ punch lists** Investors Blanco is watching seem most interested in local market dynamics—such as stable employment and positive demographic shifts, as well as whether the area’s retail is expanding or contracting. InvenTrust is principally focused on the Sunbelt region, in particular 18-hour cities like Raleigh, Austin and Dallas that tend to have solid demographics, strong growth projections, and a better mix of affordable housing and positive employment trends, particularly in areas related to STEM, Podboy said. For instance, InvenTrust’s The Shops at the Galleria near Austin, which it acquired last year, is buttressed by a strong trade area with jobs in technology, while its recent purchase of the Safeway-anchored The Shops at Germantown Town Center in Maryland is in a desirable, high-growth area, he said. Passco, which is mainly focused on retail centers below $20 million, particularly in Southern California and the Southwest, also considers the length and strength of shopping center tenants’ income streams, as well as the potential to increase rents. And most of SRS’s buyers are heavily weighing elements like capital expenditures when evaluating opportunities, Mayson said—think roof condition and age, HVAC and parking lot condition. *This article was originally published in [Commercial Property Executive’s May 2017 issue](https://www.bluetoad.com/publication/?i=405450#{).* **Categories:** Passco News --- ### [4 Steps For Growing Your Business at the Dog Park](https://www.passco.com/4-steps-for-growing-your-business-at-the-dog-park/) **Published:** March 23, 2017 **Author:** Synoptek Web Dev **Content:** For some, taking their dogs to the dog park is a normal, mundane task. For savvy business people, it’s another opportunity to build connections that can ultimately impact the success of their companies. According to the American Pet Products Association, 44 percent of U.S. households have a dog. This means that individuals in nearly half of all households in the United States are dog owners, many of whom are likely to take their beloved canines to a local dog park. In fact, the number of people frequenting the dog park and the amount of dog parks in general are rapidly growing across the country. Over the last five years, the number of dog parks across the U.S. has risen by more than 20 percent. This is a trend that will continue over the next several years, and it provides business owners with a tremendous opportunity to establish connections with people who live and work near them. In addition, individuals at the dog park usually bring very few items with them, meaning they are less distracted, more approachable and more open to conversation. Business owners and entrepreneurs that recognize this opportunity will find these fellow dog owners could potentially lead to a new business deal or referral. So how do you go about building relationships at the dog park? Below are a few successful strategies for networking at the dog park: **Step 1: Find the right park.** The first component of networking at the dog park, and arguably the most important, is finding the right dog park. As business owners and entrepreneurs, you know who your target audience is. The dog park you select should reflect this, and will require some research in order to find the right place to help you effectively grow your business. Dog owners will typically choose a dog park within a 5- to 10-mile radius of their homes or neighborhoods. This means that entrepreneurs will want to pay close attention to the demographics of the area. For example, if your target audience is high net worth individuals, you will want to select a dog park in a more affluent area. Once you’ve determined the targets you want to reach and the area, select three of the top dog parks in the area and visit each one of them. Pay attention to the dynamic of the dog park: Is it clean? Is there a large number of visitors? Would you visit again? There are dog parks that are better than others and this process will help you to weed out the bad ones, and find the best fit for you, your dog and your business. **Step 2: Start the conversation.** Now that you’ve found the right dog park, it’s time to master the art of conversation. This shouldn’t be hard since you instantly have somethign in common — your dogs. The best way to approach any fellow dog park-goer is to ask her about her dog. First, start with the basic questions, such as the breed of dog, the dog’s name or how old the dog is. Once you’ve established this initial connection, you’ll want to try to dig a little deeper with some more personal questions. One way to do this is to act like you already know the dog. For example, I will usually start with, “I think Bailey has played with your dog before. Do you come here frequently?” This tactic goes a long way and opens up the conversation to help you find out if the person is local and provides the opportunity to ask follow up questions such as what city they live in, how often they come to the dog park and what days of the week they are normally there. These questions will help you to determine if this is a viable new contact for your business. For instance, determining the days and times a person frequents the dog park will help you gauge the person’s work schedule. If the individual frequents the dog park Monday through Friday during the middle of the work day, then this person may be retired or does not work a typical work week. **Step 3: Make your pitch.** Now that you’ve finished chatting about your dogs and where you both live, it’s time to make your pitch. In order to do this, you’ll want to make sure that you casually mention where you work and what you do. For example, you may want to lead with something like this: “I work in Irvine at a real estate company, so I only bring Bailey here on the weekends. What do you do?” This casually opens up the conversation to work without sounding like a sales pitch. Next, you can offer your business card and ask for theirs. People typically just bring their phone, leash and dog to the dog park so it’s unlikely that they will have a business card handy. In this case, you will want to ask for their phone number or email address and add it into your phone contacts immediately. When you do this, make sure to add the name of the person’s dog and the breed so that you remember when it’s time to follow up. **Step 4: Follow up.** Depending on how strong of a connection was established during the initial meeting, you may want to take two different approaches when following up: If a strong connection was made, you may want to follow up by email or with a quick call offering to meet up for coffee or to set up a time to meet up again at the dog park. This shows that you are serious about further connecting with this individual and are willing to learn more about his business and future ways in which the two of you may collaborate. If the connection needs more grooming, you may want to hold off on following up right away. Instead, remember the person, her name, her dog’s name what you talked about, and follow up the next time you see her at the dog park. By remembering the people you’ve already met, you can continue the conversation and over time the once-stranger will evolve into a connection. Overall, business owners and professionals shouldn’t keep themselves on a leash when it comes to networking. The time spent playing fetch with your pup could double as time spent building relationships with the people that may potentially help you grow your business. And, the more relationships built, the better your business can be. Whoever said “you can’t teach an old dog new tricks” clearly was not referring to networking. *This article was originally published on [Entrepreneur.com](https://www.entrepreneur.com/article/290991).* **Categories:** Passco News --- ### [Q&A: Alan Clifton on Adjusting to Online Shopping](https://www.passco.com/qa-alan-clifton-on-adjusting-to-online-shopping/) **Published:** March 14, 2017 **Author:** Synoptek Web Dev **Content:** *Connect Media will sit down with retail industry leaders on March 16 at Connect Retail West for a panel entitled: “Investing in Retail: Strategies in 2017.” Retail experts will examine what primary, secondary, and tertiary markets are piquing the interest of investors for new opportunities and portfolio growth.* *Passco Companies’ Alan Clifton shares with Connect Media the opportunities he sees ahead in the retail market, what factors are driving decisions today, and what markets investors are exploring in our latest 3 CRE Q&A.* **Q: What will drive new opportunities and portfolio growth in the year ahead?** **A:** For Passco \[growth means\], staying the course and finding well located retail with strong tenancy that matches the demographics of the market it serves. Knowing where the market is today and is trending is key, especially from a long term hold perspective. Looking at the relevance of the current tenants in serving the demographic can either solidify a center or provide opportunity to re-tenant to the market’s socioeconomic demographic growth on a “on going” basis. **Q: What factors are driving these decisions?** **A:** Retail is evolving more than ever, especially with increased data collection bringing more clarity to retailers’ location picks. Brick and mortar retailers continue to re-evaluate space needs, store density in a geographic area and their relevance to a specific store’s market demographic. Key questions in the decision-making process include “who is my center’s demographic specifically,” “how divisible are my larger spaces” and “what is the current and possible future demand for this center.” The ever-increasing numbers of both baby boomers and millennials mandate more specific knowledge of where the demographic of the population is trending and of that demographic, how will the increase in online purchasing influence the center’s potential tenants and shoppers. **Q: Where are investors looking next as this sector continues to evolve?** **A:** Bigger isn’t always better. Money can be made by fixing up and repositioning smaller, well located centers and boxes. As retailers require less space, where once a parcel could only accommodate a 25,000 square foot user, now two to three tenants can occupy the same space and in some cases, feed off each other’s foot traffic. Retailers are downsizing and in certain instances, by downsizing, can relocate to better locations, increasing sales through lower operating costs, increased visibility and higher auto traffic counts. Landlords who are creative, can take advantage of this trend. *This article was originally published on [Connect Media](https://www.connect.media/qa-alan-clifton-on-adjusting-to-online-shopping/?utm_term=Los%20Angeles%20News&utm_campaign=USC%5Cu2019s%20Raphael%20Bostic%20is%20Fed%5Cu2019s%20%5Cu201CFirst%20Step%5Cu201D%20Toward%20Diversity&utm_content=email&utm_source=Act-On+Software&utm_medium=email&cm_mmc=Act-On%20Software-_-email-_-USC%5Cu2019s%20Raphael%20Bostic%20is%20Fed%5Cu2019s%20%5Cu201CFirst%20Step%5Cu201D%20Toward%20Diversity-_-Los%20Angeles%20News).* **Categories:** Passco News --- ### [Plenty of Runway Left](https://www.passco.com/plenty-of-runway-left/) **Published:** March 13, 2017 **Author:** Synoptek Web Dev **Content:** Multifamily has remained the preferred investment vehicle of commercial real estate for the last several years, and for good reason. Apartments have demonstrated strong demand, healthy absorption levels and rents that are growing at rates above historical norms. In addition, multifamily provides a stabilized opportunity for investors, as it is more apt to withstand shifts in economic pressures compared to other product types. People will always need a place to live, and therefore there will always be demand for multifamily product. That said, many investors are wondering if the multifamily market has reached its peak. With more than 18 years of experience and $1.7 billion in multifamily product in markets across the country, Passco Cos. believes there is still plenty of runway left and have prepared a few strategies for navigating the multifamily landscape in 2017. These strategies include: **Focus on Strong Markets** Despite rising concerns that multifamily has reached its peak, apartment fundamentals remain very strong. Demand has continued to grow with high occupancy and rising rents in many markets across the Southeast. In addition, job creation is running at full steam, homeownership is at historic lows and Millennials entering the workforce continue to maintain their preference to rent versus own. Investors that focus on areas with meaningful economic drivers by diversified job growth, rising rents and stable occupancies will have the most success in 2017. For example, at Passco, we closely monitor all of these factors and pay attention to macro-level U.S. Bureau of Labor Statistics data, population trends and job announcements. We also closely monitor markets on a more micro level, such as evaluating individual property performance and determining the economic factors driving that performance. We are currently targeting suburban areas of high-growth markets across the Southeast, including Atlanta, Nashville, Louisville, Charlotte, Raleigh, Charleston, Tampa, Orlando, Jacksonville and both coasts of South Florida, among others. We anticipate that these areas will continue to demonstrate strong market fundamentals, providing a healthy multifamily investment landscape in 2017. **Target Suburban Properties** There continues to be a push among investors toward apartment communities in growing suburban areas in search of higher yield. This is especially true today with the post-election interest rate movement. A year ago, when 10-year loans were pricing in the mid 3-percent range, we were able to get a little more competitive on core, infill assets at the lower end of the cap rate range and still find acceptable yield. Now, with rates back up to the low-to-mid 4-percent range, many investors are finding themselves seeking out newer suburban assets in the suburbs of high-growth primary and secondary markets. In addition, suburban areas often have more restrictions on development, which results in less competition for investors, unlike urban cores, which often have extremely high development pipelines due to local governments encouraging revitalization through new development. Passco is extremely selective about the submarkets in which it invests. The company’s preference is primarily driven by a submarket’s supply pipeline, which today is ruling out assets close to the urban cores. A lot of the markets we own in and would buy again in have very strong development pipelines with many properties in lease up, where concessions are sometimes eclipsing two months. We are currently avoiding the submarkets where the lease ups have diluted rents to the point where no one is very comfortable in hypothesizing just how far the rents must drop for a property to remain competitive from an occupancy standpoint. **Look for Long-Term Value** In addition to looking for assets in markets with strong fundamentals and that will deliver higher yields, investors will also want to seek properties that are positioned to perform over the long haul. Investors should be constantly asking themselves: - What is unique about this property? - Would this property be characterized as a commodity? - Ten years from now, will this property still possess the physical attributes or a location that would get the future buyer as excited as we were when we bought it? These questions help to make sure that the assets we acquire are suited for a long-term hold strategy as opposed to buying properties for the sake of buying. Overall, the multifamily landscape in 2017 will remain healthy. There continues to be ample opportunities for investors as long as they focus on markets with quality fundamentals and demographics, target suburban areas with less competition and development and seek properties with long-term value potential. *This article was originally published in [Southeast Real Estate Business’ March 2017 issue](http://southeastrealestatebusiness.epubxp.com/t/169053-southeast-real-estate-business).* **Categories:** Passco News --- ### [Passco Eyes Broadening Mandate; Sees $1Bln of Deals in 2017](https://www.passco.com/passco-eyes-broadening-mandate-sees-1bln-of-deals-in-2017/) **Published:** February 6, 2017 **Author:** Synoptek Web Dev **Content:** Passco Cos., among the big dogs in the structured tax-deferred exchange market, is bullish on its prospects this year. The Irvine, Calif., investment manager last year put together some $600 million of deals, most of which involved buying properties on behalf of Delaware Statutory Trusts that it structured in order to allow investors to complete tax-deferred property exchanges. It’s expecting to do $1 billion of deals this year. Its bullishness is driven by today’s healthy market conditions as well as the hefty volume of tax-deferred property deals that were done during the previous market peak and that might be coming due. Also a factor: the uncertainty surrounding potential changes in the tax code, which might drive property owners to execute deals while tax laws remain unchanged. Given the amount of equity raised through the TIC market during its heyday, between 2005 and 2007, perhaps $25 billion of properties were purchased. Most of those deals have, or are reaching the end of their expected lives. In 2007 alone, more than $3 billion of equity was raised, which when leveraged could have resulted in at least $10 billion of properties being purchased. When investors get liquidity from their tax-advantaged vehicles, they typically re-invest proceeds, which now is typically done through DSTs. Larry Sullivan, president of Passco, called those the “brawny years” of the TIC sector. Other property owners, seeing peak property pricing, might be prompted to sell to take advantage of the market conditions. That could play right into the hands of advisers like Passco, which could help them diversify their portfolios on a tax-advantaged basis. Proceeds from the sale of a single property could be re-invested, and leveraged in a number of DSTs, for instance. Passco historically has played in the middle market, meaning its deals typically were valued at no more than say $30 million or $40 million. It’s now pushing that up, and will consider deals as large as $100 million. A DST can have up to 499 investors in it. Since 2008, Passco has focused on the apartment sector and has targeted the southeastern United States and Texas because of favorable demographic trends. While some areas of the apartment sector might be getting overheated, construction activity nationally still is “not too out of whack,” Sullivan explained. Meanwhile, the southeast has become an engine of growth, both of employment and population. The company now is looking to broaden its focus as part of its effort to hit $1 billion of deals. “We don’t want to be a one-silo business,” Sullivan explained. The company could pursue mixed-use properties that would include an apartment component. It might also pursue old retail or industrial properties that could be redeveloped into mixed-use – properties that Sullivan called adaptive-reuse projects that would entail converting the properties into perhaps retail space and apartments. It’s also looking at what might be described as urban, middle-market housing, that is, properties that cater to an area’s teachers, police officers and firemen. Sullivan noted that much of the apartment stock that has been developed in recent years has been high-end, putting most relatively new units out of the reach of a large portion of any area’s residents. “This is right in the middle sector,” he said, meaning people who earn too much to qualify for low-income housing, but don’t earn enough or are unwilling to pony up the high rents that most newly developed properties command. “There’s a void that could create an opportunity,” he said. In some circles, such housing is referred to as workforce housing, which is becoming popular among a certain breed of investor. Such housing often is older, so it generally requires capital for upgrades, but it’s usually in or near urban centers, making it very attractive to area workers. Among those actively investing in the subsector is TruAmerica Multifamily, which has accumulated some 30,000 units, mostly workforce units in the western United States and Maryland. In addition, Passco for the first time is planning to move beyond putting together structured tax-deferred vehicles. It’s serving as an investment adviser for a foreign capital source that is pursuing investments in Southern California retail centers valued at $10 million to $40 million each. “Our global strategy is to be a more diversified company, beyond DSTs,” Sullivan said. It will pursue value-add properties, urban-centric apartments, adaptive re-use projects and the management of foreign capital. “We have to keep our eyes and ears open,” he said. *This article was originally published on [Commercial RealEstate Direct](http://www.crenews.com/top_stories_-_free/top_stories_subscriber/passco-eyes-broadening-mandate-sees-$1bln-of-deals-in-2017.html).* **Categories:** Passco News --- ### [Two Executives Join Passco’s C-Suite](https://www.passco.com/two-executives-join-passcos-c-suite/) **Published:** January 25, 2017 **Author:** Synoptek Web Dev **Content:** In conjunction with announcing its goal to acquire more than $1 billion in commercial real estate this year, Passco Companies, LLC has announced the promotions of Alan Clifton to Chief Operating Officer and Suzy Cottle to Chief Financial Officer, according to Larry Sullivan, President of Passco Companies. “Last year we were able to reach an acquisition volume totaling over $540 million,” says Sullivan who notes that the firm’s strong in-place team will play a tremendous role in doubling that figure this year. “Alan and Suzy have continuously demonstrated their expertise in real estate and will both be key to our smooth operations, financing, and investor reporting as we rapidly grow this year. By design, we’re readying our own infrastructure to ensure a positive experience for our clients, investors, partners and colleagues.” In his new position, Clifton will negotiate and secure financing for new acquisitions as well as maturing asset loans, and oversee Company Operations, Passco Property Management and Passco Management Services. Clifton will continue his role within Passco Companies Development. Clifton, a Certified Property Manager and licensed California Real Estate Salesperson, currently serves as the Western Division Operations Chair for the International Council of Shopping Centers (ICSC) and is also an active member of the Commercial Real Estate Development Association (NAIOP) and the Mortgage Banker Association (MBA) and National Multifamily Housing Council (NMHC). In her new role, Cottle, who has been with Passco since 2004, will be responsible for overseeing all financial reporting, risk management and strategic banking relationships for Passco Companies and its affiliates. Cottle is currently a member of Commercial Real Estate for Women (CREW), Alternative Direct Investments Securities Association (ADISA) and National Multifamily Housing Council (NMHC). **Categories:** Passco News --- ### [Passco Caps 2016 with Apartment Buy in SC](https://www.passco.com/passco-caps-2016-with-apartment-buy-in-sc/) **Published:** January 9, 2017 **Author:** Synoptek Web Dev **Content:** Passco Companies has acquired Woodfield South Point, a 2009-built, 240-unit institutional quality multifamily community in the West Ashley submarket of Charleston, South Carolina for $38.5 million. This is the firm’s final acquisition in 2016, bringing Passco’s total acquisition volume for the year to more than $540 million, according to Larry Sullivan, President of Passco Companies. “We have been extremely active in the market nationwide, and we anticipate an even stronger stream of acquisitions in 2017,” says Sullivan. Passco aims to acquire $1 billion in assets in 2017, according to Sullivan, who notes that this acquisition in Charleston is reflective of the assets Passco targets. “The acquisition of Woodfield South Point, which we plan to rebrand as 1000 West, is demonstrative of the exceptionally high quality assets we continue to acquire in growing markets across the country,” he says. Colin Gillis, Vice President of Southeast Acquisitions at Passco Companies, explains that multifamily product in economically diverse markets with strong demand drivers, such as Charleston will remain a focus for the firm in the New Year. “West Ashley is quickly becoming one of Charleston’s most desirable suburbs, and is positioned for long-term economic growth,” says Gillis. “The area’s population has increased by more than 50% over the last five years. Centrally located near some of the region’s strongest employment hubs, West Ashley consistently demonstrates high quality demographics. For example, the average annual household income within a one mile radius of 1000 West is over $90,000 a year.” Further, Charleston is one of the fastest-growing mid-size metros for aircraft manufacturing and an emerging hub for international aerospace, aviation, automotive and tech industries, according to Gillis. The city also boasts prominent medical campuses and educational facilities, which account for more than 20,000 jobs. The Medical University of South Carolina is consistently ranked the #1 hospital in all of South Carolina. Aside from being a major hub for these important industries, Charleston is without a doubt one of the most charming cities in the United States and consistently wins top accolades from publications like Condé Nast Traveler and Travel and Leisure, who have ranked Charleston as the number one city in the country and in the world. “Impressive distinctions from renowned publications are a true testament to what a special place Charleston is,” says Gillis. “The city often attracts population growth based solely on its reputation of being a great place to live. We know that Charleston will always be Charleston and that we have made an excellent long-term investment decision.” The apartment community is located off Highway 17, a major thoroughfare in the region, and in close proximity to Interstate 526, providing easy access to north and downtown Charleston. “This strategic location is only a short commute to some of the region’s largest business districts,” says Gillis. “Charleston’s Central Business District is a short 15-minute drive, and North Charleston, home to Fortune 500 companies including Boeing, Mercedes Benz, Volvo, and Bosch, are within twenty minutes from the property. The Boeing manufacturing and assembly plant is located just across the Ashley River, which will continue to drive strong resident demand for this apartment community over the next several years.” Gillis adds, “The submarket is also positioned for long-term rent growth. The property has experienced year-over-year rent increases of approximately six-percent over the last three years, even in the face of over 1,000 deliveries to the submarket.” Kevin Kempf at CBRE notes, “The apartment community’s diverse amenities and distinct Southern charm will continue to drive long-term demand. In addition, its location in one of the most coveted and historic cities in the country makes it uniquely positioned to benefit from high quality demographics and a growing population.” 1000 West is surrounded by a wide variety of high-end retail, residential, and entertainment options. Located close to Bolton’s Landing, an affluent neighborhood with home values ranging from $250,000 to $400,000, the property is within walking distance to the West Ashley Greenway – an 8.25 mile jogging and biking trail – and approximately three miles from Stono Boat launch. The multifamily community features a resort-style saltwater pool and expansive tanning deck, outdoor grills and barbeque areas, a clubhouse with outdoor fireplace, media and entertainment lounge, cyber café, dog park and car washing station, among many other amenities. The property is located at 1000 Bonieta Harrold Drive in Charleston, South Carolina. Kevin Kempf and Phil Brosseau of CBRE represented the seller, Arsenal Real Estate Funds, in the transaction. Chris Black of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing for Passco Companies through Fannie Mae. **Categories:** Passco News --- ### [Passco Acquires $50M Luxury Community in FL](https://www.passco.com/passco-acquires-50m-luxury-community-in-fl/) **Published:** December 29, 2016 **Author:** Synoptek Web Dev **Content:** Passco Cos. recently closed on its third acquisition in Florida this year with the purchase of a high-end multifamily property located in Melbourne, Fla., an area that has the largest concentration of science, technology, engineering and math jobs in the entire state. The California-based real estate investor paid $50.25 million for Marisol at Viera, a 282-unit Class A luxury community at 2439 Casabona Lane. Cushman & Wakefield’s Ken Delvillar and Jay Ballard represented both the buyer and the seller, Atlanta-based Pollack Shores, in the transaction. Chris Black of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing for Passco Cos. through a Fannie Mae program. Completed this year, Marisol at Viera is located within Viera, a high-end, 22,000-acre master planned community that features top retail, restaurants, office space and residential options. Marisol at Viera comprises eight buildings and offers a mix of one-, two- and three-bedroom units ranging in size from 624 square feet to 1,380 square feet. The amenity package includes controlled access, fitness center, business center, club house, two poolside bars and outdoor kitchens, electric car charging stations, as well as a 6,500-square-foot dog park with outdoor grooming station and 564 parking spaces. Thanks to its near high-paying employers such as Harris Corp., Northrop Grumman, SpaceX and Lockheed Martin, Marisol at Viera reached 96 percent occupancy in seven months since completion and with no concessions at an average rental rate of $1,400 per month. “The influx of well-paying jobs has given a tremendous boost to the already strong rental market and has created a very impressive demographic profile at the property, with average resident incomes exceeding $100,000,” said Colin Gillis, vice president of Southeast Acquisitions at Passco Companies. “Home values and schools in Viera are also exceptional, which will assist in maintaining long-term value. Additionally, Viera is the county seat of Brevard County, which provides a very stable local government employment base.” *This article was originally published on [Multi-Housing News](https://www.multihousingnews.com/post/passco-acquires-50m-luxury-community-in-fl/).* **Categories:** Passco News --- ### [Passco Ranked #2 Fastest-Growing Companies 2016 by Real Estate Forum](https://www.passco.com/passco-ranked-2-fastest-growing-companies-2016-by-real-estate-forum/) **Published:** December 21, 2016 **Author:** Synoptek Web Dev **Content:** Following the success of our inaugural Fastest-Growing Companies feature, Real Estate Forum is once again putting the spotlight on some of the most dynamic, successful firms in the commercial real estate arena. We’re ranking companies that have achieved exceptional growth in recent years, outpacing their competition. Be it through mergers or strategic acquisitions, opening offices in new markets or making strategic hires, the 26 firms on the following pages represent the robust health of the industry. Methodology: Nominees received a score for growth in two key areas – revenue and headcount growth – from year-end 2013 to year-end 2015. The sum of those scores determined the final rankings of each company within its size category. All nominated firms provided financial reports, signed affidavits or sworn statements verifying the accuracy of their submissions. **Passco Companies** **Overall Growth Rank:** 2 **Revenue Growth Rank:** 1 **Employee Growth Rank:** 4 **2015 Revenue:** $481,000,000 **Three-Year Growth in Revenue:** 123% **Projected Year-End 2016 Revenue:** $550,000,000 **Number of Employees in 2015:** 58 **Three-Year Growth in # of Employees:** 2% **Projected Headcount at Year-End 2016:** 60 **Head Executives** William O. Passo, *Founder and CEO* Larry Sullivan, *President* Tom Jahncke, *President, Passco Capital* Belden Brown, *SVP and National Sales Manager* **Primary Business:** Private Investor/Owner **Region of Operation:** National Founded by Bill Passo in 1998, Passco Cos. has continued to grow at a rapid rate over the past year not only in terms of revenue growth but also physically, expanding its presence to over 17 different states and growing its national portfolio. One of the key drivers behind this success is its continued strategy to focus on its “Next 10” model, which focuses on markets that are positioned for long-term growth over the next decade. This forward-looking approach has enabled it to acquire properties in markets that will perform well over time, resulting in strong rental growth and increased property values. In 2015, Passco bought more than $230 million in multifamily and retail properties and, by the end of this year, it expects to have completed more than $550 million in deals. It’s also added offices during that time frame, notably in Texas and the Southeast, the latter of which has been extremely active and aggressive in terms of growth. Passco now owns more than 26 assets across the Southeast and is continuing to expand both its holdings and its client base. The firm has also experienced a tremendous increase in the number of investors it serves, particularly foreign investors in China. In 2016 alone, Passco has invested more than $15 million in foreign capital, and that figure is expected to grow in the coming year. As part of its ongoing strategy, expanding the portfolio in strong growth markets across the country will continue to be a major focus. With an emphasis on the multifamily and retail sectors, Passco expects to do more than $1 billion worth of acquisitions over the course of the next year. It also views self-storage as a major potential growth area; the firm recently sold two such facilities in Florida and plans to acquire more than $30 million of that product within the next 12 months. *This article was originally published in [Real Estate Forum](http://www.reforum-digital.com/reforum/december_2016/?pm=2&u1=friend&pg=25#pg25).* **Categories:** Passco News --- ### [Self-Storage Demand Outpaces Supply in Northwest Florida](https://www.passco.com/self-storage-demand-outpaces-supply-in-northwest-florida/) **Published:** November 30, 2016 **Author:** Synoptek Web Dev **Content:** Passco Cos., along with its joint venture partner, Perdew Investment Group, has announced the sale of the Patriot Self Storage Portfolio, which comprises two Class A self-storage facilities totaling 1,667 units in the North Port submarket of the Sarasota-Bradenton MSA of Florida. The properties sold for a combined $19 million. Southern Self Storage acquired the 818-unit Patriot Self Storage of Bobcat Trail at 2245 Bobcat Village Center Road, while Life Storage purchased the 849-unit Patriot Self Storage of Talon Bay at 6029 Talon Bay Drive. “The self-storage sector has demonstrated record growth in the past several years,” Scott Allen, president of development at Passco Cos., said in prepared remarks. “In fact, revenue for the self-storage industry is forecasted to hit $32.7 billion by end of 2016, driving tremendous investor demand for this product type.” According to Allen, Passco Cos. and its partner timed the sale of these assets to capitalize on this strong investor interest, which allowed the partnership to secure a premium price for the portfolio. The firms developed the two self-storage facilities in 2008. “There was a specific need for this product type in the Sarasota-Bradenton MSA, and we recognized the value potential of developing these assets early on,” added Allen. “Demand for self-storage throughout the area has continued to outpace supply. This consistent lack of available supply has driven up self-storage property values, which made this the perfect time to sell this portfolio and bring our investment full-circle.” Hal Perdew, manager at Perdew Investment Group, commented that the joint venture developed the properties in areas that were densely residential and would benefit from projected growth in the region. “Florida has demonstrated tremendous expansion over the last several years, and currently has one of the highest migration rates in the country. In 2015, it surpassed New York as the third most populous state,” added Perdew. “Where there are high population gains, coupled with ongoing demand and development for multifamily, demand for self-storage quickly follows. We were able to foresee this rapid growth, anticipate the deep need for this product type, and develop these facilities early. Now, several years later, this region is dominated by record population growth, multifamily demand and a lack of quality self-storage facilities, allowing us to sell this portfolio at a significant profit and maximize our ROI.” The two facilities are located near major highways and are approximately 8.4 miles apart. During its hold period, the joint venture increased the value of the assets through its comprehensive operating platform. “Each property is operating at nearly full occupancy, resulting in a steady stream of income and positive NOI for the portfolio. This allowed us to deliver a product that could easily be marketed to investment groups, which in turn, resulted in significant interest from both national and regional buyers,” added Passco’s Scott Allen. “The success of this sale speaks to Passco’s core strategy of identifying opportunities in markets that are poised for long-term economic growth. We are actively pursuing opportunities to acquire and/or develop self-storage facilities in others markets across the country that demonstrate these same quality market fundamentals.” Luke Elliot and Michael Mele of The Mele Group at Marcus & Millichap represented Passco as the seller in these transactions. *This article was originally published on [Commercial Property Executive](https://www.cpexecutive.com/post/demand-for-self-storage-outpaces-supply-in-northwest-florida/).* **Categories:** Passco News --- ### [Dunwoody Multifamily Trades For $72M](https://www.passco.com/dunwoody-multifamily-trades-for-72m/) **Published:** November 3, 2016 **Author:** Synoptek Web Dev **Content:** Two Blocks, a Class A, 400-unit midrise multifamily community in the Dunwoody submarket of Atlanta, has traded hands. The sale price: $72 million. Passco Companies acquired the multifamily property. Developed in 2008 by Atlanta-based Pollack Shores Real Estate Group, the Two Blocks multifamily community has demonstrated effective rent growth of more than 11% for the last two years. That’s despite its lack of key unit upgrades and amenity enhancements while maintaining occupancy rates exceeding 95%. “Two Blocks is a rare find in today’s market,” says Colin Gillis, vice president of acquisitions, for the Southeast at Passco. “Institutional quality assets of this nature that provide a strong opportunity for value creation are hard to come by. This property, in particular, is strategically located within a premier submarket of Atlanta that provides quality demographics, a highly educated workforce, and immediate access to a variety of extremely deep and dynamic employment hubs.” Two Blocks is next to Atlanta’s largest office market, Perimeter Center, which over 30 million square feet of office and retail space. Perimeter Center is home to more than 5,000 companies and 123,000 jobs, including the national and regional headquarters of several Fortune 500 and Fortune 1000 companies. The multifamily property is also located less than three miles from Atlanta’s largest medical district, which includes three world-class hospitals employing over 15,000. While the multifamily property is close to some of Atlanta’s most important employment drivers, it sits in a quiet, suburban-like, single-family setting, removed from the congestion in and around Perimeter Mall. Gillis calls it an excellent combination of urban and suburban with immediate access to Interstate 285, GA-400 and Interstate 85. “This stable rent growth and occupancy is a true testament to the strength of the market and the asset’s quality location,” says Gillis, who notes that there is an opportunity to grow rents further through capital upgrades. “We plan to implement a series of improvements that will modernize the property’s amenities and support our strategy to better compete with similar vintage properties in and around Perimeter Mall.” In his estimation, there is currently a $200 gap between rents at Two Blocks and assets of similar vintage product 1.5 miles west off of Ashford Dunwoody Road. What’s more, rents at the property are currently $500 below the newly developed properties along Hammond Drive, 2.5 miles west of Two Blocks. Gillis sees a significant opportunity to cut into this spread with the help of a light value-add initiative. Passco plans to implement a series of upgrades to the interior and exterior of the property including installing granite countertops in the kitchens and bathrooms, significant improvements to the amenity package including the expansion and updating of the fitness center and improvements to the property’s curb appeal starting with an exterior paint job. “We were able to acquire the Two Blocks community significantly below the cost basis for new midrise assets in the Perimeter Center / Sandy Springs submarket in a municipality that will not allow future multifamily construction at very attractive cap rates for Atlanta,” says Gillis. “Additionally, the property boasts some of the largest floorplans in the submarket, averaging over 1,000 square feet across a unit mix consisting of one- and two-bedroom floorplans. This will always provide a competitive advantage going forward in a world where floorplans are getting smaller and smaller.” Two Blocks is Passco’s fourth acquisition in the Atlanta market. The multifamily property closed at contract price within 30 days of Passco being awarded the property, which Gillis says attests to the aggressive-nature of which the firm is pursuing quality assets in great locations. “Passco was quick to recognize the long-term value Two Blocks presented and then performed flawlessly through an accelerated due diligence and closing timeline,” Dan Phelan, director of Multifamily Investment Sales for ARA Newmark. The property is located at 4000 Dunwoody Park in Dunwoody, Georgia, and is within walking distance to local retail and lifestyle amenities. ARA Newmark’s Atlanta team, led by Phelan, John Weber, and Bo Moore, represented the seller in this transaction. Chris Black of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing for Passco Companies through Fannie Mae. *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/jenniferleclaire/2016/11/03/dunwoody-multifamily-trades-for-72m/).* **Categories:** Passco News --- ### [Should Multifamily Developers Focus On Suburban Locations?](https://www.passco.com/should-multifamily-developers-focus-on-suburban-locations/) **Published:** October 27, 2016 **Author:** Synoptek Web Dev **Content:** Apartments transactions rose to an all-time record of $150 billion in 2015 and with $72 billion in sales closed in the first half of the year alone, 2016 is on track to not disappoint. Behind these transactions are the professionals who put each deal together, whether they’re connecting buyers with sellers or lining up the financing to make the sale happen. On a recent panel at RealShare Apartments last week, moderated by Kitty Wallace, EVP of Colliers International, expert sources discussed what it takes to sift through the massive number of players in the market to find the right components and parties for each transaction. Panelist Gary Goodman, SVP of acquisitions at Passco, provided a national overlook, saying that he is fortunate to be able to look at the country as a whole as opposed to being a regional buyer. “The risk adjusted returns to us are really the best in the Southeast,” he said, adding that his firm is very active in Northern Atlanta, the Florida markets, Nashville, and Austin to name a few. “What I like is that they are suburban locations. We aren’t focused at all on the core inner city properties.” For the most, Goodman said that “we aren’t overly built” at this time, but he did say that there are some core markets, especially in the gateway cities that are. “We stay away from those places. We have picked up some assets that are phenomenal that are getting 5% to 6% rent growth. It seems to me that it is a fool’s game to be buying in San Francisco at a 3.5 cap when rents are going down. For us, it is all about cash flow.” James D’Argenio, principal of acquisitions at the Bascom Group, said that in some of the Sunbelt markets, his firm is focused on suburban locations. He pointed to pockets of Dallas, Austin or Arizona, and added that a lot of the schools are better in the suburbs. “You can still underwrite and find good value add deals in those markets if you believe in your strategy and have discipline in your underwriting.” Specifically in Southern California, David Harrington, EVP and national director of multifamily at Matthews Real Estate Services, said that there are opportunities everywhere regardless of where it is. “A lot of the deals we are doing are in the private capital space,” he said. “When you have owners who are asleep at the wheel and they have been for years and they now have to sell, there is opportunity for someone to come in and pick that off.” Some places that stand out to Harrington are places like Boyle Heights and even South Los Angeles is getting a lot of attention. Panelist Steve Fried, principal of Mesa West Capital, who is active in all product types, is seeing banks pull back. “That has created opportunity for balance sheet lenders,” he said. “What we have been focused on historically are primary markets and some of the stronger secondary markets.” Goodman added that “it is so competitive to acquire properties and what we are up against often are private capital guys, sponsors that have partners and very often they will need to do a 30-day due diligence and a 30-day close and bring in a partner.” He explained that brokers and sellers are nervous about those deals. “We close all cash, and don’t need to bring anyone else in. it is very frothy in terms of capital availability to invest in. it takes two or three months to raise $30 or $40 million.” Fried adds that there is less volatility in the multifamily sector compared to other property types. “We financed a deal last year where there were no leases there at closing.” *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/nataliedolce/2016/10/27/should-multifamily-developers-focus-on-suburban-locations/).* **Categories:** Passco News --- ### [Shop Talk: Bill Passo on RIAs and Private-Equity Real Estate](https://www.passco.com/shop-talk-bill-passo-on-rias-and-private-equity-real-estate/) **Published:** October 20, 2016 **Author:** Synoptek Web Dev **Content:** Why are so many wealth advisers reticent to move beyond the two-dimensional stock and bond portfolio model and into real assets — specifically real estate? Why is there such widespread aversion to illiquidity, despite the prospects of reaping the so-called illiquidity premium? What are the advantages to direct ownership of real estate versus the strict use of listed REITs? And where are the sweet spots in the real estate market at this stage? We ask Bill Passo, founder and CEO of the Passco Companies, a real estate operating company that has acquired, managed and developed more than $3 billion in real estate investments with properties in 21 states. https://podomatic.com/embed/html5/episode/8231032?autoplay=false *This podcast was originally published on [Real Assets Adviser](http://www.irei.com/real-assets-adviser/podcasts/shop-talk-bill-passo-on-rias-and-private-equity-real-estate).* **Categories:** Passco News --- ### [2016 General Counsel Award Nominees](https://www.passco.com/2016-general-counsel-award-nominees/) **Published:** October 17, 2016 **Author:** Synoptek Web Dev **Content:** While John Fitzgibbon has been at Passco for a relatively short period of time, his impact throughout the company can be described in one word: invaluable. Fitzgibbon handles all of the legal matters pertaining to the firm’s acquisitions and dispositions of investment properties, one of the most integral parts of Passco’s business. In addition, he manages the firm’s general corporate matter, a tremendous undertaking, which he handles seamlessly. Fitzgibbon has also been instrumental in introducing the company to a number of his contacts, opening the door for new sources of equity and development projects. Passco Companies, LLC is a national real estate investment firm specializing in the acquisition, development and management of commercial properties. Prior to joining Passco, Fitzgibbon served as general counsel and a principal of The PRES Companies, a full-service real estate company in Irvine. *This article was originally published in the Orange County Business Journal.* **Categories:** Passco News --- ### [Multifamily Market Remains “Fundamentally Strong”](https://www.passco.com/multifamily-market-remains-fundamentally-strong/) **Published:** September 22, 2016 **Author:** Synoptek Web Dev **Content:** Connect Apartments brought together more than 500 CRE leaders for an information-packed conference at the JW Marriott in DTLA. The event featured a one-on-one conversation with Geoff Palmer, as well as a keynote presentation by MPF Research’s Jay Parsons. Top apartment brokers, owners, investors and finance players shared multiple ways to navigate a volatile economy while remaining profitable. CRE is an ever-changing and dynamic creature, and these leaders agreed, multifamily is fundamentally strong, with plenty of capital pursuing multifamily product ranging from banks to 1031 exchange investors. Panelists on the Trading Hands: Buying and Selling panel expect multifamily to remain a hot investment asset class. There’s a significant amount of multifamily product available now, and TruAmerica Multifamily’s Greg Campbell expects that to continue next year. He says, “Investors like the safety and security of the multifamily sector.” Investment strategies surrounding multifamily product are adjusting to market conditions, demographic shifts and generational preferences. Among those approaches are investors that are focusing on specific product types, such as only Class A, or downshifting to Class B assets in Class A locations or markets. TruAmerica Multifamily’s Campbell says says what makes sense to them is offering properties that are affordable to the majority of the renter pool. That means acquiring Class B assets that “80- to 85% of the market’s renter pool can afford.” They believe that’s a smart strategy because Class A product is priced out of the majority of the renter pool’s budget. Campbell notes, matching up a properties’ capital improvements with the existing tenant’s budgets allows them to stay at a property. They can add new amenities or upgrade a property, and the rent bumps will be acceptable. Passco Company’s Ogal Claspell says their investment strategy has shifted to the Southeast and Southwest, where they’re seeking assets in both primary and tertiary markets. The search for “yield drove us there” over the past six to seven years. They typically acquire Class A, new assets that are well-located. Another strategy that’s worked for Passco is pursuing a “value-add lite” property in which they invest $3,000 to $4,000 per unit, and can generate 20- to 25% returns. Value-add is a key component of the investment strategy today. JLL’s David Young says the “value-add story is where everybody is now.” He also believes “once Gen Y grows up, we will do more traditional units.” One of the most interesting trends ARA Newmark’s’ Curtis Palmer is seeing is existing, well-located product being brought up to today’s standards. That’s especially true for projects that aren’t functionally obsolete. To compete, owners are being forced to “bring up the finishes to what is being developed today.” Palmer sees a number of challenges faced by the multifamily sector. They include a reduction of available core product, a thinning of the buyer pool, and soaring construction costs. Capital, while plentiful, is shifting. The change has been occurring for some time, as the cap rate compresses to get the yield to work. Campbell says options range from fixed to floating rates for debt, which provides flexibility. But “cash-on-cash returns is king.” That is a change from the previous cycle, when 25% of profits came from cash flow. Now, he says that percentage is closer to 50%. *This [article](http://www.connect.media/multifamily-market-remains-fundamentally-strong/?utm_term=Trading%20Hands%3A%20Buying%20and%20Selling&utm_campaign=Connect%20Apartments%3A%20Event%20Recap%20&utm_content=email&utm_source=Act-On+Software&utm_medium=email&cm_mmc=Act-On%20Software-_-email-_-Connect%20Apartments%3A%20Event%20Recap%20-_-Trading%20Hands%3A%20Buying%20and%20Selling) and [video](https://vimeo.com/183795043) was originally published on Connect Media.* **Categories:** Passco News --- ### [Property Management Rules The New Generation Of Retail](https://www.passco.com/property-management-rules-the-new-generation-of-retail/) **Published:** September 15, 2016 **Author:** Synoptek Web Dev **Content:** Property management isn’t reserved for multifamily properties. It is also crucial to maintaining a successful retail asset, especially as the retail industry moves toward entertainment and experiential centers. At ICSC Western States, we sat down with Vickie Miller, senior property manager at Passco Cos., for an exclusive interview to talk about property management in retail. The firm has a robust property management platform for both its own retail portfolio as well as third-party owners. In the interview, Miller stresses the importance of communication with both retail tenants and, when managing a third-party property, property owners, and tells us how property management has evolved alongside the retail market to continue to enhance and add value to retail properties. *This video interview was originally published on [GlobeSt.com](http://www.globest.com/sites/kelsimareeborland/2016/09/15/property-management-rules-the-new-generation-of-retail/?kw=Property%20Management%20Rules%20the%20New%20Generation%20of%20Retail&cn=20160915&pt=National&src=EMC-Email&et=editorial&bu=REM&slreturn=20160815114133).* **Categories:** Passco News --- ### [Three CRE Q&A: Passco's Claspell Breaks Down MF Market](https://www.passco.com/three-cre-qa-passcos-claspell-breaks-down-mf-market/) **Published:** September 12, 2016 **Author:** Synoptek Web Dev **Content:** Passco Companies’ Ogal Claspell will be speaking at Connect Apartments on September 15 in Los Angeles. Connect Media asked Claspell to assess the state of the the multifamily market in our latest installment of 3 CRE Q&A. **Q: The multifamily market is said to have been approaching its peak and many wonder if it can continue to sustain this rapid growth, where do you see the multifamily market heading into 2017?** **A:** The multifamily market continues to be one of the most attractive asset classes, and we believe this will remain that way well into 2017. Space market fundamentals are strong, rents are growing, absorption is good, and demand isn’t slowing down any time soon. Millennials, which consists of 24% of the U.S. population, are in their prime rental age and will be for the next several years. At this point, this demographic does not appear to be making the move into home ownership, and will remain a key driver for the multifamily industry. It is this incredibly strong demand that is driving the multifamily market forward, and we anticipate this will continue through the next quarter and beyond. **Q: As prices continue to reach record highs, how does Passco identify assets that will deliver long-term value at this point in the cycle?** **A:** The key is the way Passco structures its investments, and that is for the long-term. We are constantly looking at where a market is going and not particularly where it is right now. Our focus is on areas that are demonstrating quality long-term attributes such as strong demographic trends, population growth, high income levels, strong home values, job growth and a higher concentration of millennials, which allows us to identify assets that will provide value over time and withstand economic shifts. **Q: Has real estate analytics and big data made their way into investment strategies? What role do these elements play in the due diligence process for an investment property?** **A:** Real estate analytics and big data play an instrumental role in investment decisions today, especially since the transparency and quality of this data continues to improve. The trick is to know how to accurately interpret this information and how to pull out the relevant information for making an informed decision. One of the biggest challenges when analyzing this type of data is to not solely rely on what happened in the past to guide investment decisions moving forward. *This article was originally published on [Connect Media](http://www.connect.media/three-cre-qa-passcos-claspell-breaks-mf-market/).* **Categories:** Passco News --- ### [Multifamily Sales Are Picking Up Steam](https://www.passco.com/multifamily-sales-are-picking-up-steam/) **Published:** September 7, 2016 **Author:** Synoptek Web Dev **Content:** The U.S. apartment market remains the most attractive property type among investors, with sales volume exceeding $32.7 billion in the second quarter of 2016, a 14 percent increase from second-quarter 2015, according to Real Capital Analytics (RCA). Sales of multifamily communities outstripped office, retail, hotel and industrial sales in the same time period for assets trading at $2.5 million and greater. In Atlanta alone, multifamily trade volume exceeded all other commercial real estate sectors through the first half of the year – combined. Even though sales of apartment residences in Atlanta dipped 5 percent compared to the first half of 2015, roughly $3 billion of multifamily projects traded, according to RCA. “The biggest story in our space is the sheer volume of transactions,” says Chad Thomas Hagwood, senior vice president of originations at Capital One Multifamily Finance. “That’s made up of some big deals and a ton of small- and medium-sized deals.” The healthy investment sales performance across the United States is a product of an overall strong apartment market. According to Axiometrics, U.S. rental rates are up 4.1 percent year-to-date and occupancy remains above 95 percent, despite the large amount of supply hitting the market. Through the first two quarters, 133,337 apartment units were delivered, with 521,694 units under construction as of Aug. 14. Buoying the market is a seemingly endless base of renters who are renting by choice, a well-documented phenomenon that has dropped the homeownership rate to a 50-year low after topping out in 2004. The overall homeownership rate is currently 63.1 percent, and among young adults (under 35 years old) the rate is 34.1 percent, according to the U.S. Census Bureau. Blake Okland, vice chairman of ARA Newmark, says the homeownership rate hasn’t reached its valley yet and doubts it will rebound anytime soon. “We built a homeownership base for a period of time on lending practices that will hopefully never return. The renting cohort experienced a long period of time where the promise of wealth creation in homeownership was turned upside-down. They also know how homes became millstones for their parents, preventing them from taking a new job or moving,” says Oakland. “The renting cohort spent years in luxury student housing projects, so they have a certain standard of living that they’ve been brought up on. They’ll spend incrementally more to stay in luxury living after college, which impacts their ability to save for a house and pay a mortgage in a more disciplined mortgage environment. This idea that the homeownership rate will somehow snap back to ‘normal’ levels pre-recession isn’t the case because it was never normal.” Interest rates are also staying suppressed in the wake of Brexit and other global concerns, leading to more investment activity from companies wanting to take advantage of the low interest rate environment. Additionally, cap rates continue to compress at a very steady clip, signifying that prices are increasing. According to RCA, average multifamily cap rates nationwide were at 5.6 percent in the second quarter, down from 6 percent in second-quarter 2015 and 6.2 percent in second-quarter 2014. In its Quarterly Survey of Apartment Market Conditions, the National Multifamily Housing Council (NMHC) reported that 54 percent of respondents find apartment prices to be “frothy,” meaning that buyers will be satisfied as long as the properties continue to perform. However, about 19 percent of the respondents said that prices have entered “bubble territory,” meaning they’re currently over-valued. (The survey’s respondents comprise 119 CEOs and other senior-level executives of apartment-related firms nationwide). The market of course sets the price, but savvy investors are worried about undisciplined or inexperienced buyers pushing prices to unhealthy levels. Managing expectations is key when brokers assist sellers in listing their properties, and Darron Kattan, managing director of Franklin Street’s Tampa office, says that it’s normal in this part of the cycle to see some unrealistic expectations. “Owners see other properties sell and they automatically assume theirs is better, – whether it is or isn’t – and therefore they should sell for more,” says Kattan. “We’re seeing unrealistic expectations, but then again the market keeps moving and rents keep increasing so in the time that it takes a property to close the neighbor can probably raise their rents ad interest rates will have decreased.” **Buyer Pool is Evolving** The RADCO Cos. is an Atlanta-based multifamily investor that has purchased 61 apartment properties in the last 59 months, or roughly one community per month. The company specializes in value-add transactions in the top metros in the Southeast, namely Atlanta, Tampa, Orlando and South Carolina. “We always look for a lower-performing project in an attractive submarket and we try to improve the operations and make the property as good as it can be, but still be what it is,” says Norman Radow, CEO of RADCO. As an investor using a combination of private equity and bridge financing, RADCO sees plenty of competition for Class B and C product. Value-add deals remain a hot sector for multifamily investment, and in Atlanta alone, nearly 80 percent of transactions in 2015 and 2016 have been Class B and C, according to CBRE. Steven Shores, president and co-founder of Pollack Shores, a prominent multifamily developer and owner, agrees that competition is highest in the value-add segment with a “broad array of buyers.” “Value-add deals seem to trade at the lowest cap rates of any product in the market, which is not historically sustainable,” says Shores. “Sellers are able to capture the economics of the value-add risk right now and leave it to the buyers to prove it up. That’s not the way it normally works.” Value-add deals are increasing in pricing as investors are paying more for the opportunity to renovate assets, focusing more on future rents than on current income, according to Colin Gillis, vice president of acquisitions for the Southeast at Passco Cos. On the higher end of the multifamily spectrum, Shores says the buyer pool for their recently developed projects comprises mostly institutional investors. “We have been developing in pretty unique locations and well-performing metros so we’re still seeing a lot of interest from institutions in our new developments,” says Shores. “Most of our sales have been direct to pension fund advisors or funds comprising pension, endowment and other institutional sources of capital.” Passco Cos. is a Class A apartment investor that seeks assets in high barrier to entry submarkets within high-growth metros, such as Raleigh, Charlotte, Tampa, Nashville and Atlanta. The investment firm looks for a unique story for each asset, and it recently closed a $50.4 million purchased of The Veranda, a 236-unit property in the Louisville suburb of Prospect, Kentucky. The community was built in 2015 by Bristol Development. “The Veranda checked every single box for us. The property is a unique, Class A asset with very high barriers to entry that will deliver an above-average return to our investors,” says Gillis. Gillis has noticed the buyer pool is changing and the background of the companies that it bids against is evolving. Historically Class A assets are of most interest to pension fund advisors, life insurance companies, high net worth individuals, REITs and foreign entities. “The dominant buyers of years past have slowed their appetite in the past two years. This has allowed a lot of the private capital groups, that at one time had to be ultra-aggressive in pricing and terms to compete, to have a little more flexibility in their offers,” says Gills. “Many buyers are recognizing and asserting their leverage more than they were able to in the past.” Simpson Housing LLLP, a privately held multifamily developer and manager, has recently purchased The Residence Buckhead Atlanta from OliverMcMillan for $136.5 million. The 370-unit property is situated within The Shops Buckhead Atlanta, a 1.5 million-square-foot mixed-use development in Atlanta’s Buckhead submarket. Simpson Housing’s purchase proves that not all buyers of Class A product in top submarkets need to be institutional investors or REITs. The makeup of multifamily’s buyer pool has been fairly predictable over the past few years, but Oakland believes that as value-add deals continue to promise a high rate of return, all bets are off. “There is no hard and fast rule across the board between Class A and B buyers as the ebb and flow of investors seeking risk-adjusted returns can push them from one class of asset to another fairly frequently,” says Oakland. With strong competition across all segments of the multifamily spectrum, some buyers seek to differentiate themselves from the pack in order to win the bid. One of the methods that some have resorted to is contingent-free offers. “Contingent-free offers are coming back into style. Buyers are offering up some of their deposit to not be contingent on any sort of due diligence to get their offer accepted,” says Kattan. “Those are attractive to sellers, and disciplined buyers have difficulty competing against those.” Radow agrees, saying RADCO has trouble overcoming those offers during the bidding process: “Unfortunately as the market has gotten more competitive there are a lot of high-flying prices thrown out there that look really attractive to sellers, so some of that competitive edge that we have is lost because the numbers are so spicy and interesting to the seller.” Investors are also expanding their investment criteria to seek multifamily projects outside of their typical target markets. In search of yield and perhaps less competition, buyers seek assets with strong fundamentals in up-and-coming markets with healthy economic indicators such as population and employment growth that can support their investment. “The Charlottes and Atlantas are always in the headlines,” says Capital One’s Hagwood. “The interesting story is that investors are coming to the secondary and tertiary markets to buy. They’re looking for yield and the larger markets are picked over.” Near the popular retail destination The Summit Birmingham, Nashville-based C-H Core I LLC sold the 414-unit Colony Woods for $43 million. C-H Core purchased the asset in October 2009 for $24.8 million and upgraded more than half of the units with new appliances and lighting packages prior to the sale to Forum RE Acquisitions LLC, a multifamily investment firm based in Denver. “The buyer pool has definitely changed in Birmingham,” says Hagwood. “It has solid fundamentals, and it’s attracted a lot out-of-state investment activity.” *This article was originally published in [Southeast Real Estate Business’ September 2016 issue](http://southeastrealestatebusiness.epubxp.com/t/169053-southeast-real-estate-business).* **Categories:** Passco News --- ### [Passco Cos. Lays Out $75M for Florida Community](https://www.passco.com/passco-cos-lays-out-75m-for-florida-community/) **Published:** August 31, 2016 **Author:** Synoptek Web Dev **Content:** Passco Cos. is keeping busy this year, most recently paying $75 million for a 400-unit community located in the growing submarket of Bradenton in the Tampa Bay Area of Florida. The community, ParkCrest Landings, is situated within a 67-acre site that includes nine acres of lakes and 40 acres of nature preserves along a tributary of the Manatee River. One reason the property was attractive to Passco is its location in Bradenton, which is experiencing economic expansion. “Bradenton is one of the most dynamic submarkets on the west coast of Florida,” said Colin Gillis, vice president of acquisitions for the Southeast at Passco Cos. “Manatee County has been one of the most stable counties in the state of Florida since 2010, and is continuing to demonstrate consistent economic growth. It has added more than 11,500 jobs over the last 24 months, and has one of the highest per capita incomes in the state.” The west coast of Florida has seen strong growth in job creation and rental prices over the last several years, according to Bureau of Labor Statistics data. The data also shows that the Bradenton-Sarasota metro area ranks fifth in highest percentage of job growth during the last five years at almost 17 percent. ParkCrest is also located near some of the area’s largest employers, including Manatee Memorial Hospital, the headquarters for retailer Bealls and Tropicana, IMG Academy, and the municipalities for the city and county. “What is nice about a market like Bradenton is that not only will it benefit from the growth of its own demand drivers, it will leverage off of the success and continued growth of Tampa and St. Pete to the North and Sarasota to the South,” Gillis added. Bradenton is also thriving in terms of rent growth and multifamily demand. “What makes Bradenton especially unique is that demand for new apartment acquisitions in this market is always very competitive amongst owners that currently own in the area,” he said. Bradenton is centrally located between Tampa and Sarasota, with immediate access to I-75. The community, located at 5725 1st Ave. East, was built in 2015 by Tampa-based CKT Development and offers 17 three-story buildings. Amenities include a clubhouse and theater, fitness center, lakeside sun decks, resort-style swimming pools, 1.2-acre dog park, 1.5 miles of walking trails, cyber cafe, game room, and kayak/canoe launch and storage with direct access to the Manatee River. ParkCrest is also located next to Tom Bennett Park, a 200-acre recreation and greenspace area with large open fields, playgrounds, fishing pieces, volleyball courts and soccer fields. “These best-in-class amenities truly deliver the lifestyle that residents are demanding and appeal to variety of demographics from millennials, to young families, to baby boomers,” Gillis said. “The ability to attract a diverse group of demographics, coupled with its unique and innovative amenities will further drive demand for the asset and allow for strong rent growth over time.” JBM Chairman & CEO Jamie May represented Passco and the seller, CKT Development in the transaction. Chris Black of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged Fannie Mae acquisition financing for Passco. Other acquisitions for Passco this year include its [$80 million purchase of a suburban Phoenix community](https://www.multihousingnews.com/post/passco-buys-suburban-phoenix-community-for-80m/) earlier this month and a [$54 million purchase of an Orlando community](https://www.multihousingnews.com/post/passco-spends-54m-on-new-orlando-transit-oriented-community/) in May. *This article was originally published on [Multi-Housing News](https://www.multihousingnews.com/post/passco-cos-lays-out-75m-for-florida-community/).* **Categories:** Passco News --- ### [1031 Exchanges: A Quick Primer](https://www.passco.com/1031-exchanges-a-quick-primer/) **Published:** August 30, 2016 **Author:** Synoptek Web Dev **Content:** 1031 exchanges continue to attract interest as a method for deferring taxes on a property transaction. But the strategy can be daunting for the first timer. How does a broker approach these transactions in retail and elsewhere? To learn more about this, GlobeSt.com sat down with expert Belden Brown, SVP and national sales manager at Passco Companies. **GlobeSt.com: Passco is known for its expertise in providing 1031 tax differed exchange solutions. Can you explain what brokers need to know about this process and how a 1031 exchange can benefit a seller?** **Belden Brown:** A 1031 tax deferred exchange allows a seller to defer taxes on the sale of a property, assuming the seller follows the rules established by the IRS. When done correctly this can provide benefits to a seller. The basic rules that need to be followed include: Acquire only “like-kind” replacement property. All proceeds from the relinquished property must be used for purchasing the replacement property. Make sure the debt on the replacement is equal to or greater than the debt on the relinquished property. (Exception: A reduction in debt can be offset with adding additional cash; however, a reduction in equity cannot be offset by increasing debt.) IRS regulation requires a QI (Qualified Intermediary) to be used to properly complete an exchange. Do not dissolve a partnership or change the manner of holding title during the exchange. The title must remain the same during the exchange process. The seller has 45 calendar days from the close of their real estate to identify the replacement property (ies), known as the “Identification Period” and then another 135 days to close on the replacement property (ies) identified. The potential benefits are the deferral of taxes and then having those dollars (which would have been paid in taxes) working for the investors to grow the value of its investment until the property is actually sold, which at that time the taxes would be due, unless the seller decides to complete another 1031 exchange. Depending upon the replacement property there can be some increase in tax sheltering of cash flow from the new property. Some sellers continue to exchange numerous times until their death. At that time the property than goes to their heirs at a stepped up basis. **GlobeSt.com: Can a seller only exchange assets that are within the same product type and can the exchange be split among several different investments?** **Brown:** Overall, a 1031 exchange provides flexibility for an investor to purchase replacement properties within different property types if they so choose, as long as those properties are held for investment. Many times when people hear like-kind exchange they think have to stay within the same property type. With any 1031 exchange, an investor can exchange assets across all property types. For example, if an investor sells a retail center and wants to reinvest that capital into a multifamily asset, that is completely acceptable. An investor may also split the exchange amount among several different investments. During the Identification Period, most sellers use the “three property” rule, by which a seller identifies three separate properties as like-kind investment options. The investor has the capability of closing on all three properties or just one if he or she chooses. The investor may also utilize the “200 percent rule,” which allows an investor to identify any number of replacement properties as long as the values do not exceed 200 percent of the value of the relinquished property. The “95 percent rule” allows an investor to identify any number of replacement properties, but the investor must close on all of the identified properties for this to qualify. The 95-percent rule is the least commonly used of the three. There is no limit as to how many times a 1031 exchange can be completed, allowing an investor to exchange from property to property until they are ready to cash out, but then also realize the deferred taxes will be due. Brokers working with sellers who want to continue to defer their tax liability should consider a 1031 exchange as a viable option. **GlobeSt.com: How is the debt and equity structured in a 1031 exchange?** **Brown:** All proceeds from the relinquished property must be used for purchasing the replacement property. Make sure the debt on the replacement is equal to or greater than the debt on the relinquished property. (Exception: A reduction in debt can be offset with adding additional cash; however, a reduction in equity cannot be offset by increasing debt.) **GlobeSt.com: How would you suggest a broker structure the sale of a property?** **Brown:** When a seller wants to complete a 1031 exchange after their sale, it’s important for the broker to have language in the escrow notifying the buyer that the sale is contingent upon the seller completing a 1031 exchange. The escrow can have extensions, allowing more time for the seller to find a suitable replacement property. This will help to ensure that the seller is able to identify a replacement property to purchase. The second thing a broker will always want to do is to make sure the seller already has properties lined up to purchase prior to the close of the initial sale. A broker will never want to close escrow on a property and then look for a property to purchase. Once the initial property closes escrow, the clock starts and those 45 days can run out quicker than you think, especially in the current competitive market landscape. *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/geofferymetz/2016/08/30/1031-exchanges-a-quick-primer/?kw=1031%20Exchanges:%20A%20Quick%20Primer&cn=20160830&pt=Chicago&src=EMC-Email&et=editorial&bu=REM&slreturn=20160730142409).* **Categories:** Passco News --- ### [Why Multifamily Will Continue To Have Legs](https://www.passco.com/why-multifamily-will-continue-to-have-legs/) **Published:** August 18, 2016 **Author:** Synoptek Web Dev **Content:** Millennials are not looking for their piece of the rock like previous generations did—and many wouldn’t qualify for a home loan even if they were, said panelists at RealShare Orange County here Tuesday. These are among the many factors that make for a continued robust multifamily market—particularly in Orange County, where home prices are high. Speakers on the panel, “Multifamily: On the Rise or at its Peak” were consistent in their appraisal of the market as far from over, although it depends which market you’re looking at, said Gary Goodman, SVP | acquisitions for PASSCO Cos. LLC. Goodman said the largest group of Americans is age 23, and they have college debt and are waiting longer to marry and have children, which means they tend to rent apartments for longer than previous generations did. “There are a lot of structural changes going on in multifamily that bode well for the industry—we have a long way to go.” Chuck Packard, CFO for Pacific American Real Estate Development, said that regulations likeDodd-Frank will limit lending for home mortgages, which is good for multifamily. He added that “Millennials are not looking for their piece of the rock like we did,” another good sign for the sector. Moderator Bob Champion, founder, president and managing director for Champion Real Estate Co., said the market is strong because there’s “still tremendous undersupply.” He added that we could be looking at multiple cycles at work, with the end of a credit super-cycle near. With a nod to Brexit, Packard said, “We forget that we’re a global community, and what happens there affects us and vice versa.” That said, he added, “I believe apartment owners today will do well in the next three to five years.” Stephen Anderson, director of investments for CityView, said if you can get into those markets west of the I-405, you’re in good shape, and he added that there’s a reurbanization going on in Orange County. “You have to do a lot of land-use gymnastics to do development deals in built-out markets.” With regard to cap rates, panelists said they range from 3% to 5% in this market, with vacancy rates of 3% or lower in some areas. “There’s definitely a demand for housing,” said Warren Berzack, a principal and national director of the multifamily advisory group for Lee & Associates. Goodman said a lot of people forget what cap rates represent, which is rental growth. “The expectation that rental rates will increase dramatically” is not necessarily realistic. “Cap rates don’t necessarily have to go up.” Packard said, “We are at a new normal. If interest rates rise and cap rates rise, we will pay more for units because of the supply/demand curve.” He added that he believes cap rates will remain level or adjust downward. Anderson said unit mix is extremely important to his firm; all one-bedroom units in a community are a red flag because one-bedrooms are the most expensive to rent. He added that in many cases, even if the renter is making six figures, they prefer to share a two-bedroom with a roommate than to bear the expense of a one-bedroom. Regarding new areas of opportunity for multifamily in Orange County, Packard said definitively, “There are no new niche areas in Orange County that haven’t been exploited yet.” Anderson mentioned Dana Point, but few other options were listed. Champion said one of the problems in multifamily is, “We’re all building to the class-A renter, but the average renter can’t afford class-A” in many coastal markets like Orange County. In discussing value-add multifamily, Goodman called the concept “a head scratcher. In most cases, you’re paying the seller for value that you’re going to add, and you’ll get caught with your pants down in a recession because the property is a lot older” than other developments in the market. “Value-add is a little oversold.” He added that a lot of people have backed off from buying core assets. With regard to debt and equity, most panelists said 60% to 65% leverage is the way they typically operate, although Packard said his firm was hoping for 80% leverage but is now looking at 50% equity, which is “more realistic.” In closing, he said Orange County still has significant multifamily growth going forward. “Young people need a place to live; the apartment market will continue to grow in Orange County, and Orange County real estate will grow, even in the event of a recession.” *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/carrierossenfeld/2016/08/18/why-multifamily-will-continue-to-have-legs/).* **Categories:** Passco News --- ### [Passco Acquires Luxury Multifamily Community in Phoenix Metro](https://www.passco.com/passco-acquires-luxury-multifamily-community-in-phoenix-metro/) **Published:** August 16, 2016 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC has acquired Almeria at Ocotillo, a 389-unit, Class A luxury multifamily community located within the Ocotillo Master Planned Community, an upscale master planned community in the dynamic Phoenix submarket of Chandler, Arizona, for approximately $80 million. “Chandler is one of the most desirable submarkets in the Phoenix metro,” says Gary Goodman, Senior Vice President, Acquisitions for Passco Companies. “The greater Chandler area is home to the largest concentration of tech jobs in all of Arizona and is positioned to perform extremely well over the next several years.” Goodman notes that Almeria at Ocotillo is located within the region known as “Silicon Desert,” which is one of the most dynamic tech employment markets in the Southwestern U.S. The apartment community is also located within walking distance to three of the largest employers in Silicon Desert, Intel, Wells Fargo and Orbital ATK. “The region’s strong presence of technology-driven employers, highly educated workforce, and projected job growth presents a tremendous opportunity for long-term value,” says Goodman. “By 2017, an additional 17,000 jobs are anticipated to hit the market. Wells Fargo, located approximately a half mile from the apartment community, is also planning a major expansion, adding two 13-story office towers. This may eventually lead to more than 12,000 employees on its campus.” In addition, there is more than four million square-feet of office space planned, or under construction, in the Chandler submarket with two million square-feet expected to open in the third quarter of 2016. “This influx in office development, coupled with the unprecedented job growth throughout the region will continue to drive renter demand for the asset,” says Goodman. “This will result in immediate stabilized cash flow while also allowing for continued rent growth and increased property value over time.” Located within the Ocotillo Master Planned Community, the newly constructed apartment community was built in two phases with the North Phase – featuring 194 units – completed in 2015 and the South Phase – featuring 195 units – completed in 2014. “Almeria at Ocotillo boasts some of the most comprehensive amenities in Chandler further adding to its appeal,” says Goodman who also notes that the average household income within Ocotillo is $104,000. “These high quality amenities will attract the growing demographic of young tech workers throughout the region, keeping renter interest high and maximizing our return on investment.” Sean Cunningham, Vice Chairman at CBRE adds, “Almeria at Ocotillo’s distinctive Mediterranean charm combined with top-of-the-market community amenities and Class A finish-levels set the standard for upscale apartment living in Chandler. The community’s coveted location within the high-end Ocotillo Master Planned Community, surrounded by diverse knowledge-based employers, ideally positions Almeria Ocotillo to benefit from strong future demand for multifamily housing in the surrounding area.” The apartment community features an infinity pool with complimentary day beds overlooking the Ocotillo Lake, a second resort-style pool, a lap pool, two spas, a state-of-the-art fitness center, an outdoor kitchen, electric car charging stations, and a clubhouse equipped with pool tables, among many other amenities. In addition to these upscale amenities, the property is located approximately five miles off of Interstate 10, providing residents with convenient access to downtown Phoenix. “Almeria is a distinctly luxurious community that we designed and built from the ground up, with a mindful focus on including premium, aesthetically-pleasing amenities and design elements,” says P.B. Bell’s Chief Executive Officer R. Chapin Bell. “We’re very proud of what we accomplished at Almeria and we are pleased that others appreciate the value and beauty of this special property. It’s in good hands with Passco.” The apartment community is located at 2470 and 2471 West Edgewater in Chandler, Arizona. Sean Cunningham at CBRE represented the buyer and the seller, PB Bell **Categories:** Passco News --- ### [Big Opportunities In B-Class Retail](https://www.passco.com/big-opportunities-in-b-class-retail/) **Published:** August 15, 2016 **Author:** Synoptek Web Dev **Content:** Retailers are starting to target class-B open air retail centers, and the move is creating big opportunities for investors, according to Todd Siegel, VP of retail at Passco. Passco, a seasoned retail investor, is shifting its retail strategy to class-B centers in growing Southwest markets, and curbing its competition by focusing on all service-driven tenant anchors, not just grocers. To find out more about the new strategy and why class-B centers are attractive investment opportunities, we sat down with Siegel and his colleague Howard Wong, director of retail leasing, for an exclusive interview. Here, they give us an inside look at their acquisition strategy, geographic focus and retailer trends. **GlobeSt.com: Passco has a long history within the retail sector and has been investing in retail product since its inception in 1998. How do the current shifts within the retail sector impact Passco’s investment strategy moving forward? Where are the opportunities?** **Todd Siegel:** Historically, Passco has focused on enclosed regional malls, although we have had both open air centers and lifestyle centers. We’ve essentially run the whole gamut. There’s been a trend among retailers where they are shifting toward open air centers and away from leisure malls. We started to sell our closed retail product to focus on where retailers were moving to and that is the Class A and B open air centers. This shift has been going on for several years now, and with those products getting pretty full, we have started to look for other opportunities, such as B-type centers. We’ve been extremely focused on seeking these opportunities in areas across the Southwest. The nice thing about the B centers is the economics of them: they can be purchased at a higher cap rate and can still give you rent growth. Plus, they have great tenant demand. **Howard Wong:** There is a significant amount of opportunity for these Class B centers due to the overall demographic changes within these Southwestern markets. These regions are demonstrating strong growth in all sectors from new multi-housing developments, to attracting Millennials with the shift of high tech jobs in the regions. We are seeing new hubs of creating new retail close to these employment centers and hubs. **GlobeSt.com: You mentioned that Passco is looking for opportunities in the Southwest. What do you find attractive about this market and are there any areas in particular within the Southwest that Passco is focusing?** **Siegel:** Cap rates are extremely attractive in the Southwest, and the region is demonstrating strong demographics. We are looking at areas with a growing population, such as Arizona, Texas, Nevada and even California. Although in California, cap rates remain compressed unless you go to the secondary and tertiary markets. In Arizona, we are looking at the Phoenix metro area; in Nevada, we are looking at the Las Vegas area; in Texas, we are looking at Fort Worth and Dallas; and in California, we are looking at areas in Central California and the outlying areas of L.A. **Wong:** These markets are particularly attractive to Passco due to the strong actual and anticipated job growth in each of these regions. Businesses throughout the country are attracted to these areas due to the high concentration of Millennials, its lower costs of living, high education and great weather. We see a tremendous opportunity for long-term value in each of these areas. **GlobeSt.com: It’s no secret that retail owners are constantly adapting to the ever changing retail landscape. What are the key attributes that make a retail center attractive today? How does Passco work to ensure the retail centers it acquires will withstand future market shifts?** **Siegel:** Our key focus is on centers that are resistant to the internet, centers that aren’t reliant on having a lot of commodities in them. In the past we would focus on a lot of commodity-heavy uses, like clothes. Today, we look for tenants such as food services with a diversity of categories, from fast service to sit down and everything in between. We also look for services, like haircuts or a chiropractor, because you can’t get those on the internet. As a retail owner, it’s extremely crucial to stay up-to-date on the current trends within the industry and ensure that your centers are in-line with those trends. We are seeing significant growth and a shift towards these food and service tenants. When we purchase a center, if it has other uses, that might be an opportunity for us to bring another higher quality tenant in. Retail has to evolve to compete with the commodities that are sold online, and so centers need to be more experienced based. **Wong:** The tenant mix is an extremely important component for a retail center and it is evolving with the changing wants and needs of the consumer. Today’s consumers are demanding unique centers that provide an overall experience and are looking for environments that emulate the latest in exciting new restaurants and fast casual food options. We also work to create that overall experience for consumers by creating intimate social areas, outdoor living environments with areas for seating and updating the overall landscape of a center. The other big component aside from the tenant mix is the location. We are looking for centers in suburban markets that have a void for these hip open air centers. Often urban cores already have these types of centers in place. By strategically targeting these suburban markets, we can create tremendous value and see tons of opportunity in outlying areas and the suburbs throughout the country and region today. **GlobeSt.com: Do you see any trends emerging in regards to grocery-anchored and non-grocery-anchored centers? Are you seeing a shift towards a more niche focused anchor tenant?** **Siegel:** We are not as concerned about whether it is a grocer anchored or non-grocer anchored center, as long as there is an anchor that we can build off of. 99-cent only stores are a good example. They are not the highest-tier tenant, but they reach a broad group of consumers. If you look at some of the centers with these stores as an anchor, they have attracted other uses. The best case is still a grocery-anchored center, but that is what everyone is looking to do. We are trying to do something a little different that not everyone else chasing. When we look at what is for sale, there is tremendous interest in them, and the pricing gets pretty high and cap rates get compressed. When you have a non-grocery anchored center, you can get a slightly higher cap rate, and it doesn’t mean that the center is not a valuable center or not in a good area. It is just a center that some of the institutions don’t want to be in. When institutional players chase a certain product, they drive cap rates down. **Wong:** There is certainly a shift towards a more niche focused tenant. Today’s consumers are demanding more specialty and niche retailers from unique grocers such as Whole Foods, Trader Joe’s and specialty Hispanic and Asian supermarkets. Consumers are seeking environments where there is a cluster of niche lifestyle retailers including fast casual food options and food halls, fitness and yoga studios, and specialty medical users. This is a trend that we continue to see in a variety of areas across the country and don’t anticipate this slowing down any time soon. *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/kelsimareeborland/2016/08/15/big-opportunities-in-b-class-retail/).* **Categories:** Passco News --- ### ['Cross' Fit](https://www.passco.com/cross-fit/) **Published:** August 9, 2016 **Author:** Synoptek Web Dev **Content:** It used to be that you went to a shopping center to…shop. The concept sounds straightforward enough, but not with today’s changing demographics, technologies and consumer habits. Now, you go to shopping centers to socialize, eat, check out the latest art installation, see a movie and maybe pick up your dry cleaning on the way out. That is, if you don’t have your dry cleaning delivered. The rise in food, service-oriented businesses and artisanal products has dramatically altered the tenant mix at many community and neighborhood centers throughout California. What used to be a hodge-podge of hard and soft-good retailers, mixed in with a chain restaurant or two, must now be all things to all people, it seems. This has caused strip center owners throughout the state to re-evaluate their tenant mixes in an effort to cater to the new consumer. “The key to making our shopping centers stand out is to make sure we have a good mix of services, community-based retailers, great dining options and fair value,” says Sandy Sigal, CEO, president and founder of NewMark Merrill, based in Woodland Hills. “With that in mind, we are always looking to make sure we have a mix of about 25 percent to 35 percent services, which include fitness, schools, etc.; 30 percent to 50 percent true retail, which includes clothing, electronics, etc.; and 25 percent for both sit-down and quick-service restaurants.” **Retail Fever** One of the top service categories throughout California strip centers is health-related tenants. “Medical and health-related tenants, particularly urgent care clinics and fitness centers, are one of the most active tenant categories,” says Rick Rivera, president of Centers Business Management (CBM) in Los Angeles. One of the reasons Rivera believes these tenants have become so popular among landlords – outside of the obvious service they provide – is their flexibility when it comes to space. “Medical and fitness tenants are less selective about individual space positioning \[than many retail and restaurant tenants\],” he continues. “Medical tenants are also less concerned with locating in heavily retail-focused properties. These tenants are typically more destination-oriented.” This creates a mutually beneficial relationship between medical tenants and other strip center services and restaurants. It is this type of collaboration and cohesion that Rivera believes will make or break a center’s new tenant mix as we move further away from strictly retail. “Medical tenants don’t depend on the same level of synergy as many restaurant tenants,” he explains. “As such, medical and retail office tenants often dovetail nicely with one another. Retail office users, which include tax preparation, insurance, staffing agencies and auto title loans, rank as the third most active tenant category in California strip centers.” This is the case at Regency Centers’ Woodman Van Nuys, a strip center in the San Fernando Valley submarket of Arleta. James Rodriguez and Michael Bohorquez of Colliers Retail Foresight leased a vacant 3,000-square-foot spot at the center to an urgent care in May. The medical tenant will co-exist alongside services like H&R Block, Check ‘N Go and LA’s Auto Insurance. The smaller tenants, which comprise a total of 29,965 square feet, are situated adjacent to a 77,648-square-foot El Super Hispanic market. Rivera notes that this mix of medical and retail-office tenants can also benefit other categories, including restaurants, when the combination is just right. “Restaurant tenants seeking space in predominately Hispanic areas look for centers with check cashers and payday loans, dental clinics, mini-markets or any other businesses more heavily patronized by Hispanic clientele,” he says. Adjacent niche anchors, such as El Super, can also do wonders to create a diversified, yet well-rounded roster. “With the changing demographics and ethnicities in our region from Hispanic to the Asian markets, you are seeing stores such as Northgate and El Super, H-Mart and Mitsuwa,” says Howard Wong, director of retail leasing for Passco Companies, based in Irvine. “These types of specialized markets will attract tenants and remain desirable as consumers continue to demand more unique, specialized retailers to the changing demographic landscape. What is exciting is that today’s consumers are becoming sophisticated, and we have seen these retailers capture ‘crossover’ customers and markets that are changing the retail industry.” **Exercise in Fruitility** Roger Burghdorf, executive vice president of leasing at Vintage Real Estate in Los Angeles, notes a broad tenant mix doesn’t just help neighboring retailers, it provides consumers with the most exhaustive, maximized experience, which benefits the entire strip center. “As strip mall owners, it is critical that we bring in customers to the center without limiting their experience exclusively to retail purchases,” he says. “Cutting-edge restaurants, fitness- and entertainment-oriented retailers pull customers in and promote cross-shopping. Examples include regional tenants with a strong cult-like following such as Philz Coffee, Asian Box, Urban Plates, Orange Theory Fitness, Soul Cycle, Bitter Root and Muse Paint Bar.” Even categories within categories are diversifying to provide the most impactful experience to consumers with short attention spans and an eye for technology. While traditional gyms are still popular in strip centers, particularly in converted big box spaces, there are many new workout iterations emerging from the health and fitness category. “The health and fitness category has continued to grow, driven by boutique fitness offerings such as Soul Cycle, Orange Theory, pilates, barre and others,” says Grant M. Gary, president of brokerage services for The Woodmont Company. “Not only are these concepts bringing consumers into shopping centers on a more frequent basis, they are creating synergies with consumers’ evolving apparel preferences, such as athleisure concepts.” Orangetheory Fitness, known for its cardiovascular and strength training interval workouts that utilize a variety of equipment and new heart-rate technology, is one of the newest offerings in full expansion mode. The fitness franchise is on track to open 700 studios by 2017. Not surprisingly, health-conscious and fitness-addicted California is one of its primary targets. The Fort Lauderdale, Florida-based company recently signed two new leases in the San Francisco Bay Area. Orangetheory leased 3,210 square feet of end-cap space in a freestanding, multi-tenant building located at 3517 Mt. Diablo Blvd. in East Bay’s Lafayette. It sits directly across from Whole Foods Market and Safeway, and is easily accessible from Highway 24 – the area’s major east/west traffic artery. The company also took down 4,600 square feet of space within a freestanding, multi-tenant building at the corner of South B Street and First Avenue in downtown San Mateo. This outpost is situated directly across from a Caltrain station. Katie Singer of Cushman & Wakefield’s Retail Services group represented the Orangetheory franchise in both transactions. The company is also a tenant at the Terrace, a two-level, 39,634-square-foot strip center in the Thousand Oaks submarket of Newbury Park, which was acquired by a Los Angeles-based private investor partnership in June for $15.3 million. The fully occupied center includes complementary tenants like Hot Yoga 1000, Road Runner Sports running shoes and Bottle and Pint craft beer bottle shop and tap room. At a purchase price of $385 per square foot, the sale represented a 6.59 percent cap rate. CBRE’s National Retail Investment Group – West (NRIG-West) team of Philip D. Voorhees, Jimmy Slusher, Megan Wood, Matt Burson, Todd Goodman, John Read and Preston Fetrow represented the seller, a Los Angeles-based private investor, in this transaction. “The Terrace is the quintessential SoCal strip center investment property,” Voorhees says. “We love strip centers. Its dynamic tenant lineup caters to the needs of this affluent, progressive trade area. High-performing regional tenants like Orangetheory Fitness and Road Runner Sports complement local favorites like Holdrens and Bottle and Pint.” **Poking About** Wong believes the activity abounding throughout the health and lifestyle sector is representative of larger patterns within strip center tenant rosters. “The wants of the consumer continue to evolve as does the strip center,” he says. “From Millennials to Baby Boomers, we continue to see strong demand for things that are quick and convenient, but also sophisticated in quality and specialty. In health and lifestyle, we see specialized concepts like yoga, pilates and spinning, such as with YogaWorks, Fly Wheel and Soul Cycle. There are also specialty clothing stores like Lululemon, for example, which coincide with these healthy lifestyle concepts.” Then there is the food craze. Though they love their craft beer, artisanal pizzas and organic, grass-fed burgers as much as the next guy, Californians don’t put forth all that effort at Soul Cycle for nothing. Which is why the right restaurant tenants are of the utmost importance to strip center owners. “Consumers are demanding interesting and unique concepts within the realm of food that provide healthy alternatives to the traditional fast food, but still provide the ease and convenience of the QSR \[quick-service restaurant\] concepts,” Wong continues. “Retail owners are turning to more refined fast-casual dining options, such as the Tender Greens, Lemonade, Pieology, and new burger concepts like Hop Doddy and Burger Lounge. We anticipate this trend will continue, and fast-casual dining options throughout strip centers will see significant growth over the next several years. The co-tenancy of this category will also increase.” This increase in co-tenancy is once again attributed to the cohesive, complementary vibe landlords are hoping to achieve, as Wong explains. “Everyone likes to be with their ‘friends,'” he says. “This is the same mentality with tenants. The foodie restaurants wants to be with other foodie restaurants and cluster together. Strong examples of this are the many new food halls that are popping up all over the country and in our backyard in California. The success of these food halls has prompted landlords to include them in their strip centers and malls.” Though many restaurants that rely on fresh, locally sourced ingredients are doing well throughout the state, Rivera points to one concept that’s currently blowing it out of the water, so to speak. “Poke is an exciting new QSR concept,” he notes of the raw fish salad popular in Hawaiian cuisine. “The take-out, QSR nature of the poke concept makes this an ideal fit for strip and neighborhood centers. As such, transaction volume in this category is expected to surge over the next 12 to 24 months.” The new poke trend is similar to Chipotle where you build your own bowl, but with a Hawaiian flare. Instead of Mexican-themed ingredients, raw fish lovers select their vegetables and other fresh fare from a food bar that are combined into bowls or platters. “There’s an enormous buzz surrounding the poke concept, and many deals are pending,” Rivera continues. “Additionally, many poke operators are current and former successful franchise owners looking to develop a restaurant concept they can potentially franchise themselves. And most of these operators are employing business plans that call for opening a minimum of five stores in their initial launch.” Michael Pakravan of Kennedy Wilson recently represented three fast-casual poke restaurants in Los Angeles-area lease negotiations alone. Hoke Poke signed a 10-year lease for 1,200 square feet of space at 801 Hope Street in Downtown, The fish salad purveyor plans to open in July, with three more locations scheduled to open within the next year. OkiPoki also inked a five-year lease for 1,000 square feet of space at the Alexandria, a hotel that was recently converted into apartment units within Downtown. Then there is Honeyfish Poke, which signed a five-year lease for a 1,100-square-foot spot at 8850 Tampa Ave. in Northridge. The chain opened its second location in Westlake Village this past May. Honeyfish Poke joins major national and regional retailers in Northridge, including Petco, Five Guys Burgers and Fries, Pinkberry and In-N-Out Burger. The center sits adjacent to Costco. “Hawaiian poke is the latest trend in fast-casual dining, revolutionizing traditional models by incorporating fresh flavors of sushi into colorful, customizable bowls that are ready to be shared on social media,” Pakravan says. “The restaurant concept fits the Southern California lifestyle of healthy eating and provides for customization and optionality that is in high demand. As a result, dozens of new hip and trendy poke shops have opened new locations all over Southern California.” Whether fish salads sound appealing or not, Jim Lynch, director of retail management at RiverRock Real Estate Group in Newport Beach, believes landlords should eat it up. That is, if they want to stay afloat. “The tenant mix is changing to reflect current consumer demands,” he explains. “The traditional strips are becoming neighborhood shopping centers that aim to compete with regional malls, entertainment centers and other convenience and neighborhood services. Landlords who are willing to change with the times are accepting the fact these enhanced environments that attract today’s consumers for shopping, eating, working out and lingering translate into higher expenditures.” Raw fish, tech-savvy workouts, ethnic offerings and health-oriented clinics. Today’s newest strip center tenant roster doesn’t get much more “California” than that. *This article was originally published in California Centers’ August 2016 issue.* **Categories:** Passco News --- ### [Passco Sees 60% Price Boost In Multifamily Sale](https://www.passco.com/passco-sees-60-price-boost-in-multifamily-sale/) **Published:** August 1, 2016 **Author:** Synoptek Web Dev **Content:** Sundance Creek, a 232-unit multifamily community in the Atlanta submarket of McDonough, GA, had traded hands. Passco Companies acquired the asset for $14.5 million in 2010 and sold it at a 60% increase. “We acquired Sundance Creek in 2010 when many firms were focused on core markets,” Gary Goodman, senior vice president of acquisitions for Passco, tells GlobeSt.com. “We knew that the McDonough submarket was positioned to perform extremely well over the next several years and that entering the market at the outset of this growth would provide tremendous value.” During Passco’s ownership of the multifamily asset, Ford, Nestle USA, and AT&T and other major employers increased their presence in the market. The Hartsfield-Jackson International Airport, one of the busiest passenger airports in the world and the largest employment center for Georgia with 56,000 employees, also launched a $5.4 billion, 10-year expansion. “Six years later, the market’s quality demographics and strong economic drivers are attracting demand from investors across the country, which resulted in us being able to execute on our strategy and obtain a premium price for the asset,” Goodman says. “Passco’s investment strategy has always been forward-looking, and this asset exemplifies that.” Formerly Oxford Creek, Sundance Creek Apartments is 100% townhome style multifamily units. During its ownership, Passco executed interior and exterior upgrades to the community, including the addition of a dog park and cyber cafe. Dan Phelan, director of multifamily investment sales at ARA Newmark, represented Passco in the deal. He says the timing of this transaction was ideal due to the rising multifamily demand in the market. “Passco perfectly captured opportune timing in the disposition of Sundance Creek,” says Phelan. “The growth story of McDonough was immediately recognized by a very competitive field of buyers, resulting in top market pricing for the asset and a great return for our client.” The property is located at 575 McDonough Parkway in McDonough. That’s close to major transit corridors, including Interstate 75, which is located one mile west of the property. *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/jenniferleclaire/2016/08/01/passco-sees-60-price-boost-in-multifamily-sale/).* **Categories:** Passco News --- ### [Multifamily’s Urban-Infill Story May Be Oversold](https://www.passco.com/multifamilys-urban-infill-story-may-be-oversold/) **Published:** July 28, 2016 **Author:** Synoptek Web Dev **Content:** The suburbs are beginning to attract Millennials, and since many can’t buy a single-family home, the apartment market is thriving because of them, PASSCO’s SVP acquisitions Gary Goodman tells GlobeSt.com. Goodman will be speaking on the panel session “Multifamily: On the Rise or At Its Peak?” during RealShare Orange County on August 16. We spoke exclusively with Goodman about the session, trends in multifamilyinvestment and the impact of Millennials on this sector. **GlobeSt.com: What surprising facts about the multifamily sector do you expect to come up during your session?** **Goodman:** I think what will be surprising is the overwhelming support for a continued robust market. What people are nervous about with the market right now is the concept that, “Gee, we’ve been in a bull market for more than seven years, and how much longer can this last?” There’s some concern that we’re at the peak and all of a sudden we will be in some kind of downturn. But barring some major geopolitical event or recession, nothing would indicate that rents are going to fall or that cap rates are going to go up a lot, causing less investor interest in buying multifamily. In fact, all evidence points to the opposite. Is this the beginning of the end? We may have bit of a plateau in terms of rent growth, and on average rents are not going rise quite as quickly as a year ago, but that’s the average. We see a lot of foreign investment capital moving into multifamily, whereas this group hadn’t looked at multifamily before. I’m very optimistic about this sector, although I might be in the minority. **GlobeSt.com: With so many different investors in the market, what should the smart multifamily investor do or look for in order to get a leg up?** **Goodman:** It’s very important to understand that all real estate, especially multifamily, is very submarket specific. It’s very difficult to generalize, and that’s what’s great about real estate: it’s a local investment. You can say you’re buying in L.A., but where in LA? The submarkets there are multiple and all behaving in different ways. More than anything else, knowing your submarket is probably the most important factor. **GlobeSt.com: As Millennials mature and start families, how do you think this will impact the multifamily market?** **Goodman:** Another surprising thing: I think the urban-infill, transit-oriented development that is everywhere in the CBDs of cities throughout the country is an oversold story. What we’re finding is that the suburbs are frankly beginning to attract Millennials. They may be getting married and having children later, but at the end of the day, they will want to gravitate out to where the school districts are better. Unless they want to spend a lot of money for private schools in the inner city, Millennials will look for suburban locations where schools are better, and they will be challenged to buy single-family homes. Most of them want homes with yards, but the reality is their incomes aren’t as high as they want them to be; they’re still saddled with college debt, and the qualifications now for securing mortgages to buy homes are much more difficult to meet than they were seven or eight years ago: you need a higher down payment, incomes need to be higher, and they have student debt. We see suburban multifamily as having strong legs for the next 10 years. The other thing about suburban environments is that, counterintuitive to what most investors have subscribed to for the last several years, many of them have strong barriers to entry. Cities have provided tax incentives for new development, but when you get out into the suburbs—and Orange County is different from other suburbs—single-family owners don’t like multifamily in their neighborhood. They don’t like what it does to their schools or fire and police departments. In many suburban markets, there’s a better barrier to entry than in cities. Prior to the recession, it was harder to build in cities. But the number of properties in foreclosure in suburbs increased during the recession, and the renters of those kinds of properties were residents that single-family homeowners didn’t like. Today, many suburban communities have become cities—they have converted to cities and have put the kibosh on new development for multifamily. We’re seeing very solid rent growth and strong occupancies in those markets, but you can’t build more there. **GlobeSt.com: What else should our readers know about multifamily as an investment category?** **Goodman:** I think the other issue that favors investing in multifamily is that it is becoming a lot more expensive to develop. There’s a shortage of labor in most markets. Also, it’s getting much more difficult to finance new development; banks are requiring much more equity from developers in order to provide construction financing. And banks are having to reserve more of their capital now because of Basel II and III, which were set up some time ago. What developers are telling me is they are having a hard time getting construction financing now to develop new communities. I do get calls from developers looking at sites who are considering JV capital to support a new development. This will continue to keep supply in check while we have this increasing demand from Millennials as well as the Baby-Boomer cohort, who are beginning to retire and wanting to downsize and rent. They like urban environments, but a lot of Baby Boomers are renting apartments in suburbs where their grandchildren are. It’s like a barbell, with Millennials and Baby Boomers on either side, and both are in renting mode. Increasing demand from these two groups will keep supply in check. *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/carrierossenfeld/2016/07/28/multifamilys-urban-infill-story-may-be-oversold/?channel=markets§ion=national).* **Categories:** Passco News --- ### [Passco Buys Newly Developed Apartments in Metro Louisville](https://www.passco.com/passco-buys-newly-developed-apartments-in-metro-louisville/) **Published:** July 27, 2016 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC has acquired The Veranda, a 236-unit multifamily community in the highly sought-after Norton Commons master-planned community in Prospect, Kentucky, a growing submarket of the Louisville MSA, for $50.4 million. “The Veranda at Norton Commons is the only ultra-luxury rental option within one of the best-executed master planned communities in the Southeast,” explains Colin Gillis, Vice President, Acquisitions – Southeast at Passco Companies. “Norton Commons is the embodiment of a high-quality lifestyle destination, with unrivaled walkability to employment, boutique retail, dining, entertainment and recreation.” The Louisville MSA is experiencing rapid economic growth, resulting in strong demand for multifamily product throughout the region, according to Gillis. “The demographic profile at The Veranda is one of the most impressive we have ever seen,” he says. “The region continues to demonstrate strong employment growth, high average income levels, and a highly educated workforce. Market fundamentals are extremely strong, and will drive continued demand for the asset over time.” Gillis notes that job gains in the Louisville MSA far exceed multifamily deliveries. Approximately 8,500 new jobs have been added year-over-year, while only approximately 1,000 new multifamily units are being constructed each year. Further, the unemployment rate in Louisville is 4.6 percent, which is well below the national average of 5.5 percent. “The median household income within a one-mile radius of the area is $115,000, a number that is consistent with the income levels seen at the property,” says Gillis. “In addition, rising construction costs, expensive nuances that accompany developing within Norton Commons, and land prices exceeding $1 million per acre will make the addition of new rental units extremely difficult. This provides Passco with a competitive advantage over any new future development in Louisville for many years to come.” Mike Kemether in Cushman & Wakefield’s Atlanta office adds, “The Veranda at Norton Commons is a unique project, strategically positioned as the only apartment component within the Norton Commons master planned community.” The difficulty in replicating a project of this caliber made this acquisition particularly attractive for Passco, according to Gillis. Constructed in 2015, The Veranda at Norton Commons boasts more than 20 different floorplans and features a series of unit upgrades that attract both the established family unit and the millennial generation, including wood flooring, gourmet kitchens with granite countertops, stainless steel appliances, ceramic tile backsplash and custom cabinetry. “By acquiring a core asset with amenities that attract a wide range of ages, we will benefit from strong renter interest, allowing for continued rent growth and increased property value,” says Gillis. The property is located less than a mile from Old Brownsboro Crossing, a 114-acre mixed-use development featuring retail space and a medical district. Norton Hospital, part of the 11th largest hospital system in the U.S. and a provider of more than 12,000 jobs system wide, is situated within this development. In addition, the Class AA property is approximately ten miles from major employment drivers in downtown Louisville, and is three miles from Ford’s Kentucky Truck plant, which is in the midst of a $1 billion expansion with current employment growth of nearly 1,500 people in 2016 alone. The Veranda is also in close proximity to major transit corridors such as Interstate 71 and Interstate 265. The property will soon benefit tremendously from the completion of the East End Bridge, which will transform a 45 minute drive to the 6,600-acre Jeffersonville, Indiana-based employment hub of River Ridge down to less than ten minutes, according to Gillis. Passco acquired the apartment community from Bristol Development, one of the premier multifamily developers in the country. Known for its extraordinary vision, Bristol Development is widely recognized as one of the first to pioneer many submarkets throughout the Southeast. “Bristol develops thoughtful, well-planned properties in areas that are poised to perform extremely well long term,” says Gillis. “Louisville has always had excellent demographics with virtually no ultra-luxury apartment stock. The swift lease-up of The Veranda and the market’s overwhelming reception to the property is a testament to Bristol’s vision.” David Hanchrow, Chief Investment Officer at Bristol Development adds, “This process has been incredibly smooth, and we are fortunate to have had the opportunity to work with Passco. We hope there will be more deals together in our future.” The Veranda is located at 9506 Civic Way in Prospect, Kentucky. Cushman & Wakefield’s Louisville and Atlanta offices represented Bristol Development in the sale of the property. Craig Collins in the Louisville office and Mike Kemether in the Atlanta office were the selling brokers. **Categories:** Passco News --- ### [Passco Ranked #1 "Best Places to Work" by the OCBJ](https://www.passco.com/passco-ranked-1-best-places-to-work-by-the-ocbj/) **Published:** July 25, 2016 **Author:** Synoptek Web Dev **Content:** Kendall Parisi, corporate designer at Passco Companies LLC, looked over the numerous stacks of marketing supplies, brochures, and trade show materials spread across the conference room table. Time was passing rapidly, and she needed to move all of the paraphernalia downstairs and into the car right away so she and Stacy Stemen, Passco’s director of marketing, could take off for the International Council of Shopping Centers’ convention in Las Vegas. “I knew I could never do it all by myself,” she recalls. “So I asked a couple people in the office for help – and within a minute or two, at least 10 people showed up, ready to help me out.” In fact, she adds, her office mates kept showing up – so many that she had to turn away the would-be helpers. “That’s just what people are like here. Everyone steps up when you need the help – and even when you don’t,” she says with a laugh. **Come Together** Hefting boxes of marketing materials may not on the surface seem like the most productive way to spend time in the dynamic world of commercial real estate investment, with its can’t-miss deadlines and high-stakes deals. On the contrary, says Gary Goodman, Passco’s senior vice president, acquisitions. It’s precisely because everyone is so willing to help one another that the company – which holds a diverse portfolio of more than 60 properties in 20 states – is so healthy. “This is a very fun-filled, energetic group of people who work together to get the job done,” he says. “Day in, day out, I’ve walked these halls for the better part of 10 years. I’ve never seen a frown on someone’s face. It’s always ‘How are you doing? How can I help you?” That attitude, he explains, is the foundation on which Passco is built. Passco is the 2016 winner of the Orange County Business Journal’s Best Places to Work in the mid-sized company division. It was founded in 1998 by William “Bill” Passo – thus the play on words – and focused on retail investments. It’s now a national real estate investment firm specializing in the acquisition, development and management of commercial properties. The rapidly growing company has close to $2 billion in assets under management, more than $3 billion in acquisitions, and approximately 5,000 investors worldwide. It’s added several multimillion-dollar projects in the past six months alone, including apartment complexes in Alexandria, VA., Orlando and Nashville for $69 million, $54 million and $51 million, respectively. Those sorts of high-value projects require that everyone communicate with each other, says Victoria White, vice president, investor services. “Everyone understands that in order to get a project to its goal line, we all need to pull together. Sometimes that becomes very daunting, because we have investors who are signing documents that are 6 feet deep, and we need a lot of help. We have such an open-door policy here at Passco, especially with senior management. They’re in here helping because they understand. **Work-Life Balance** Senior management’s open and understanding approach is one of the key reasons employees enjoying working at Passco, White says. “Our company culture starts at the tope. Bill’s (CEO/founder Passo) main philosophy is balance. Bill doesn’t want our lives consumed by work. He wants you to leave here knowing you’re going home to a great home, a great dinner, maybe a glass of wine. You know that your life is better because of the work you’re doing here.” Goodman adds, “Here, there is true empathy for employees and their personal challenges. Management understands if you have to take time off for personal reasons. Graduations, health issues, there is never any question about what is more important. We recognize that it is good to get the job done, but that if you have a personal challenge, that trumps it.” **Employee Growth** Work-life balance is one of the key reasons employees voted the company top among the Best Places to Work, as is Passco’s commitment to employees’ professional growth. Ronnie Harrell, analyst, realty investments, jokes that he “started in the mailroom” at Passco. Now, a decade later, he has held a variety of positions at the company, always moving onward and upward when the time was right. “At Passco, the upper management believes in its people,” he says. “We’re empowered to make decisions.” White agrees: “Passco gives everyone an opportunity for growth. Not only growth within yourself as a professional, but also paths within the company. Every year, Larry (Sullivan, Passco president) meets with every single employee…to ask, ‘Are you getting what you need? Where do you see yourself professionally?’ He genuinely wants us to succeed. Stemen, director of marketing, adds her perspective: “\[Senior management\] puts you in situations that you may not be comfortable, but it stretches you as an individual and as a professional.” She cites a time when she was invited to a senior management retreat and upon her return to the office was tasked with relaying to the other associates what was presented at the event. “Being the spokesperson for the mission of your company to your associates is a hard thing to do,” she says, “but they (senior management) did it intentionally. They want to push us to be our best.” **Rewarded with Good Times** Adriana Olsen, vice president, sales, points to Passco’s culture of inspiring employees as another reason it has a good reputation in the industry. “Larry came up with this terrific idea at the beginning of the year. It was called ‘just one more.’ The concept was that before you leave for the day, you do just one more task, be it answer an email, make one more phone call…if everyone does just one more thing, every day, the opportunity for success is infinite.” Harrell says of the concept, “This goes hand-in-hand with our work philosophy. We’re competitive, and we push each other in a positive way. We ask ourselves – and each other – ‘How much can we do today?'” Olsen credits “just one more” as one of the reasons Passco employees recently celebrated a significant milestone – the company raised a record $100 million in investments in the first five months of the year. Employees’ commitment to the company is regularly rewarded, she says. There are fun, stress-relieving activities like the Summer Office Olympics, when employees break into teams and compete in events such as “office golf,” and senior management organizes activities such as bowling, ice cream socials, and scavenger hunts. The office was rewarded in the past year with a week day trip to Catalina Island. Employees’ needs are never far from senior management’s considerations, they say. “When we moved our offices to this location, the management took a map and figured out where each employee lived relative to work,” Olsen says. “Then they put the office smack-dab in the middle so that no one’s commute would be negatively affected by the move.” A culture of communication and helpfulness, along with a sense of “we’re all in this together” has shaped the company’s growth. “From the senior management team to accounting to analysts to department managers – everyone just seems to step up and do what needs to be done and we love doing it,” White says. “We’re growing as a company, and we are better today than we’ve ever been.” *This article was originally published in the Orange County Business Journal.* **Categories:** Passco News --- ### [Florida Witnessing Transit-Oriented Developments Rising Left And Right](https://www.passco.com/florida-witnessing-transit-oriented-developments-rising-left-and-right/) **Published:** July 20, 2016 **Author:** Synoptek Web Dev **Content:** Douglas Road Metrorail Station, a mixed-use, transit-oriented project at the Douglas Road Metrorail Station estimated to bring $464 million in revenue to Miami-Dade County, has won Miami-Dade Board of County Commissioners approval. Adler 13th Floor Douglas Station, a joint venture between 13th Floor Investments and Adler Group, also inked a ground lease, setting the stage for construction. Link at Douglas Station will be home to 970 residential units including a work force housing component, as well as 70,000 square-feet of retail space, a hotel, and a public plaza. The mixed-use project will be constructed in four phases. “Transit-oriented development is the wave of the future and Miami-Dade County has proven itself to be a pioneer in helping to redefine the way we think about—and experience—urban living,” says Arnaud Karsenti, managing principal of 13th Floor Investments. “By building around, and investing in, our mass transit, we can reduce congestion on our roadways and connect neighborhoods in our community for greater quality of life.” The Douglas Metrorail Station will serve as the mixed-use project’s defining element. The development will offer immediate access to Miami’s vibrant downtown financial, arts and entertainment districts and create a pedestrian-friendly environment in an urban setting. As part of the lease agreement, 13th Floor Investments and Adler Group are funding $600,000 to the Underline. The Underline is a planned project stretching 10-miles and transforming underutilized land below the Miami Metrorail. “More than anything, this project is a testament of what can be accomplished when the public and private sectors join forces,” says Michael M. Adler, CEO of Adler Group. “This project will hopefully be a model for how we can create a more sustainable and cohesive community through pedestrian and transit oriented development that leverages existing infrastructure.” The joint venture plans design the project in a way that amplifies the existing infrastructure. The goal is to increase public transit ridership while also incorporating new ride sharing and alternative transit technologies. The first phase will focus on the development of a residential tower, 150-key hotel in partnership with Driftwood Hospitality Management, and a portion of the retail footprint which includes a premium supermarket. Florida is seeing more TOD. In May, Passco put down $54 million on a TOD multifamily project in Orlando’s Florida Hospital Village. The Ivy sits along the Interstate 4 corridor near major employment centers at 2650 Dade Avenue. “Nowhere are we seeing more progressive and innovative development than in Orlando, Florida,” Colin Gillis, vice president of acquisitions in the Southeast for Passco, tells GlobeSt.com. “The City of Orlando recently invested nearly $8 billion in infrastructure and transportation projects, inclusive of the Sun Rail commuter line and an expansion of the I-4.” Wendover Housing Partners in February opened Weston Park. The TOD project is home to multifamily housing right next to the City of Longwood’s SunRail Station to encourage residents to adopt a more “car-independent” lifestyle. “As the Central Florida economy continues to boom, public transit will become a necessity. Residents are already finding that personal vehicles are no longer the fastest form of transportation,” Jonathan Wolf, president and founder of Wendover, tells GlobeSt.com. “TOD communities like Weston Park are introducing residents to the convenience of stepping out of their apartments and onto the train. These developments will help Central Florida embrace public transit, the key to unlocking the area’s full economic potential.” *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/jenniferleclaire/2016/07/20/florida-witnessing-tods-rising-left-and-right/).* **Categories:** Passco News --- ### [The Future of CRE Investment in America](https://www.passco.com/the-future-of-cre-investment-in-america/) **Published:** July 7, 2016 **Author:** Synoptek Web Dev **Content:** There’s been a slew of changing variables in the global and domestic economies, which has many people questioning the future of commercial real estate investment in America. Connect Media went straight to the experts to get their take on what’s to be expected as we march towards 2017. Fifield Companies’ Steven Fifield, Passco’s Scott Allen, UCLA Anderson School of Management’s Jerry Nickelsburg, PhD, Avison Young’s John Tronson, and Faris Lee Investments’ Richard Chichester weighed in on the following three questions: What factors are propelling investment in the re-urbanization of American cities? Will the volume of foreign investment change depending on who is elected President? Finishing out 2016, what sectors will investors seek most? Watch the video to hear their insights. *This video interview was originally published on [Connect Media](http://www.connect.media/future-cre-investment-america/?utm_term=Connect%20Classroom&utm_campaign=Costco%20Stocks%20Surge%20on%20Increased%20Sales&utm_content=email&utm_source=Act-On+Software&utm_medium=email&cm_mmc=Act-On%20Software-_-email-_-Costco%20Stocks%20Surge%20on%20Increased%20Sales-_-Connect%20Classroom).* **Categories:** Passco News --- ### [How Top Execs Learn From The Next Generation Of Leaders](https://www.passco.com/how-top-execs-learn-from-the-next-generation-of-leaders/) **Published:** June 29, 2016 **Author:** Synoptek Web Dev **Content:** “This new generation has refreshed and instilled in me as a mentor the enthusiasm and passion to succeed.” That is according to Bill French, senior managing director of Cushman & Wakefield, who recently chatted with GlobeSt.com about mentoring tomorrow’s leaders, succession planning and about what insights and tips they are passing on. “The need to incorporate new technology and new techniques to market property and find new customers is exciting,” he adds. “Whether it be CRE, banking or any other industry, we owe it to the next generation to create an even better environment and forum to advance the industry.” Good ideas come from those who actually are doing the work rather than setting the process from a supervisor perspective, adds Larry Sullivan, president of Passco Cos. LLC. He tells GlobeSt.com that “As much as managers want to manage and direct, they need to listen and share ideas. Nothing makes an employee feel better—besides the traditional rewards of promotion and/or money—than trust and empowerment.” C&W’s Jacqueline Haynes, SVP, says that “The next generation are in tune with trends, technology and new concepts, many of which I only know about by living vicariously through them,” Haynes says. “It’s a welcome exchange to share tips and experiences that challenge them to think critically and strategically, and to work backwards from their desired goal in order to achieve desired results. I enjoy watching a young commercial real estate professional grow into their position as it reminds me to stay open-minded, nimble and humble.” And according to Heidi Hendy, managing principal of H. Hendy & Associates, when working with developing leaders, she learns how to teach and be patient as she passes the baton and watches them move forward. “It is inspiring to sit back and let them take it to the next level,” she says. “I have learned to share the knowledge I have and see how see these individuals get excited and make it their own.” *This article was originaly published on [GlobeSt.com](http://www.globest.com/sites/nataliedolce/2016/06/29/how-top-execs-learn-from-the-next-generation-of-leaders/).* **Categories:** Passco News --- ### [Best Bosses in the Business: The Iconoclast](https://www.passco.com/best-bosses-in-the-business-the-iconoclast/) **Published:** June 28, 2016 **Author:** Synoptek Web Dev **Content:** *Congratulations to William O. Passo, winner of The Iconoclast category for Real Estate Forum’s Best Bosses in the Business.* If one were to look on paper at what makes a great leader in commercial real estate, the criteria would certainly include financial performance, transaction volume, shareholder returns or the number of properties the firm owns or manages—depending on the type of business the individual leads. And a quick look at some of the data available on the industry would make the task of selecting CRE’s top leaders relatively easy. Yet true leaders manifest themselves not only through performance but also—and arguably more importantly—by the way their employees feel about them. After all, real estate is a relationship business, and relationships are all about people. Even the most qualified and experienced C-suite executive would be adrift in such a tumultuous business without a talented, motivated and dedicated crew. With this in mind, we at Real Estate Forum decided to find out who were considered among the industry’s best leaders as part of our inaugural Leadership Issue. Of course, we sought out such factors as ambition, accomplishment and financial prowess. But we also looked beyond those qualities to turn up individuals who were likable, inspirational, innovative and who lead by example. In short, we were looking for leaders who rise above the C-suite sea to have talented professionals clamoring to work for—and with—them. The response to our call for the “Best Bosses in the Business” far exceeded our expectations, with more than 100 nominees submitted for consideration. The editors narrowed down the selections to 26 finalists based on the individuals’ most remarkable characteristic; in fact, the breadth and quality of the nominees was so great that we decided to increase the number of finalists—and their superlatives, if you will—from the initially planned 15. We then conducted a thorough poll of our readership to determine who would grace the issue’s cover as the Best Boss in the Business. Nearly 4,000 votes later, we had our winner in Andrew Wright, the young superstar who founded Franklin Street a decade ago. Yet all 26 of the individuals on the following pages have justly earned the reputation of “Best Boss,” if one were to look at how their employees feel about them. Read on to see who else made the final cut, and what their colleagues have to say about them. And for more information about our process in selecting the finalists, read our detailed methodology section at the end of this feature. **The Iconoclast** When Bill Passo developed the concept for tenant-in-common ownership in the early 1990s, many in the industry scratched their heads. Before then, there has never been a structure in place for multiple investors to share the risk—and returns—in a deal. Yet Bill championed the idea, taking it from a notion unheard of throughout the NASD Broker Dealer nationwide network and the real estate financing industry, all the way to Washington, DC, where he petitioned for what would become the very first TIC structure in real estate. That led the way for the growth of what became a landmark change in the real estate investment industry, and the rest is history. As the TIC structure grew to a $4-billion-plus industry, being formally validated in 2002 and evolving since then, so did Passco Cos. LLC. And when the downturn hit and reduced the number of TIC sponsors, which numbered as many as 80 by the late 2000s, by some 95%, Passco remained afloat, with Bill at its helm as CEO. His ability to not only be a pioneer in the field but also to successfully guide his team through even the worst of times, is what instills confidence and admiration in those who work with him, many of whom have been there for over a decade. Staffers shared such comments as, “Being around Bill is an energizing experience;” “Bill is the reason I am here;” “His accomplishments so far are a form of motivation;” “Everyone at the company is better o for having been employed there,” and “Working with him is an honor and a privilege.” And, indicating that the love and admiration between Bill and his team is mutual, one respondent said, “I have seen Bill moved to tears in front of the entire company when he is speaking on something he is passionate about or someone he is proud of.” *This article was originally published in [Real Estate Forum’s June 2016 issue](http://www.reforum-digital.com/reforum/june_2016?utm_term=Writing%20the%20Next%20Chapter&utm_campaign=Now%20Live%3A%20June%20Digital%20Edition%20&utm_content=email&utm_source=Act-On+Software&utm_medium=email&cm_mmc=Act-On%20Software-_-email-_-Now%20Live%3A%20June%20Digital%20Edition%20-_-Writing%20the%20Next%20Chapter&pg=44#pg44).* **Categories:** Passco News --- ### [Strategic Investor Radio: Passco Companies](https://www.passco.com/strategic-investor-radio-passco-companies/) **Published:** June 27, 2016 **Author:** Synoptek Web Dev **Content:** Listen to Bill Passo, founder and CEO of Passco Companies, a longtime real estate investment firm, in this interview done at the ADISA Spring Symposium. http://www.strategicinvestorradio.com/e/the-passco-companies/ *This interview was originally published on [Strategic Investor Radio](http://www.strategicinvestorradio.com/e/the-passco-companies/).* **Categories:** Passco News --- ### [Experiencing The Retail ‘Experience’](https://www.passco.com/experiencing-the-retail-experience/) **Published:** June 2, 2016 **Author:** Synoptek Web Dev **Content:** If you were here for the 2016 of RECon and stepped into the Passco booth, you lived the retail experience. Continuing his extreme-auto theme from last year (most of you will remember our DeLorean interview), President Larry Sullivan brought in the 1989 Batmobile (also known as the Michael Keaton Batmobile). Why? Retail is all about experience, Sullivan told us in this exclusive video interview. And he is quick to point out that it’s experience not limited to millennials, seniors or boomers. The presence of the Batmobile (and for that matter Christian Bale’s costume from the movie), is a perfect example of cross-generational marketing. The big question is, what’s next. Watch the video for some interesting insights on the subject of experiential retail. *This video interview was originally published on [GlobeSt.com](http://www.globest.com/sites/johnsalustri/2016/06/02/experiencing-the-retail-experience/).* **Categories:** Passco News --- ### [Tacoma Shopping Plaza Sells for $26.7MM To Local Investor](https://www.passco.com/tacoma-shopping-plaza-sells-for-26-7mm-to-local-investor/) **Published:** May 24, 2016 **Author:** Synoptek Web Dev **Content:** An entity related to Irvine-based real estate investment company, Passco Companies, sold a Pierce County shopping plaza late last month to a local investor. Located at 2505 South 38th Street in Tacoma, the nearly 81,000 square-foot plaza was purchased by MK Property Services, LLC of Snoqualmie for $26.7 million, or approximately $330 per square foot. The sales price was an increase of over $5 million since the property’s last sale in 2006. Lincoln Plaza was listed on the market for approximately three and a half months, says Bob Fredrickson, president and co-founder of Coldwell Banker Commercial Danforth in Federal Way. “What this shows is that the property is in a hot market,” added Fredrickson. The shopping center sits on 7.5 acres at the corner of 38th Street and Steele, where Big 5 Sporting Goods, Chevy’s, Bank of America and Men’s Wearhouse are located. According to Fredrickson it is a high traffic area, which makes for a desirable location and good investment. Pierce County’s overall retail market sat at a 7.4 percent vacancy for the first quarter of 2016, states Kidder Mathew’s Seattle Retail Report, which is 3.3 percent higher than King County. NAI Puget Sound Properties’ 2015 Third Quarter Report shows a total of 4,100 retail buildings in Tacoma, compared to 3,140 in Seattle. The Tacoma also market saw the highest vacancy of all the Puget Sound submarkets at 6.3 percent with asking rents just over $15, which is below the market average of $17.58 for the same period. The Puget Sound region as a whole has been targeted by institutional investors for core product due to healthy economic conditions, according to the Kidder Mathews’ report. Several core centers have sold recently, but single tenant net leased assets are a dominant retail investment product for private capital. The current demand is equity driven versus the debt driven demand that was seen previously. The recent Federal Reserve policy has had little or no impact on cap rates so far, and rates are expected to remain low. Retail investment demand remains high as capital from multiple sources is still competing for best product. Passco Companies is known for acquiring, developing and managing multifamily and commercial properties throughout the U.S. In 2015 alone, it acquired over $330 million in real estate, increasing its total assets to over $1.4 billion. *This article was originally published in [The Registry Puget Sound Real Estate](http://news.theregistryps.com/tacoma-shopping-plaza-sells-for-26-7mm-to-local-investor/).* **Categories:** Passco News --- ### [Retail At A Glance: What's Driving Foreign Investment?](https://www.passco.com/retail-at-a-glance-whats-driving-foreign-investment/) **Published:** May 23, 2016 **Author:** Synoptek Web Dev **Content:** *This is a guest column from Jack Fitzgibbon, general counsel at Passco Companies, for RECon 2016.* Foreign investment in US real estate is booming, and the retail sector is no exception. Chinese investors are particularly active in the US retail market, driven by our relatively stable economy and political system, as well as the current low interest rate environment. CBRE reports that Chinese based investors have poured more than $1 billion into large existing Orange County properties and big development sites over the past 18 months. To better understand the factors fueling this trend, below are four key questions regarding foreign investment in today’s retail market: **1. What is driving Chinese investors to US retail product?** There are three factors driving Chinese investors to the US retail market – the ability to own in fee, as well as perception of values. First, in China, investors are typically restricted to owning a leasehold interest in properties, because the government owns the property throughout the country. When these investors come to the US, they are able to own in fee, providing a pride of ownership and an asset that can be passed on generationally. Second, many Chinese investors view US real estate as undervalued compared to property values in China. Because of this perception, demand for US properties across the country continues to climb, boosting competition for assets and driving values upward. We anticipate that this trend will continue for the remainder of the year. Thirdly, there has been continued turbulence in China’s economy and stock market, and has led to Chinese capital flowing to sage havens like the US. **2. What type is being targeted?** For Passco’s clients, retail centers in strong markets that are grocery-anchored or shadow-anchored with a grocer remain a top choice for Chinese investors, as these centers are not as likely to be impacted by online sales. The retail centers are stabilized assets, with a strong mix of tenants with good credit. In addition, medium size multi-family properties (80-100 units) in well located areas are of interest as well. **3. What is the investment process like for foreign investors?** The foreign investors that Passco has been dealing with are high net worth families and family offices that are seeking investment firms with an existing infrastructure to handle the entire process of a deal from start to finish. For example, Passco has a platform in place for working with foreign investors that provides a full-service approach to investing in US real estate. This includes a full due diligence acquisition team, accounting, investor services, and asset management in order to manage every aspect of the investment. Because most foreign investors live within their home countries, selecting an investment firm that can manage the entire process on their behalf makes the process seamless, and thereby more accessible. **4. How is foreign investment affecting the retail landscape as a whole?** The continued growth of foreign investment in the US has kept cap rates compressed due to the continued activity and competition within the market. Cap rates are currently between five and six percent, and we do not anticipate this to change any time soon. Overall, retail assets will continue to command the attention of foreign investors who are seeking long-term stability. As foreign investment increases, US investment firms with a full-service platform in place will be well-positioned to help these investors meet and exceed their goals. *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/geofferymetz/2016/05/23/retail-at-a-glance-whats-driving-foreign-investment/?channel=markets§ion=orange-county).* **Categories:** Passco News --- ### [Adapt or Perish](https://www.passco.com/adapt-or-perish/) **Published:** May 19, 2016 **Author:** Synoptek Web Dev **Content:** Earlier this year, Sports Authority filed for Chapter 11 bankruptcy protection. The retailer cited “the increasing amount of shopping that is occurring online” as one reason for decreased sales and asked a federal bankruptcy judge for permission to begin store-closing sales at about 140 locations. At the time, CEO Michael Foss said that the company filed for the voluntary bankruptcy so that it could continue to adapt its business to meet the changing dynamics in the retail industry. Foss said that Sports Authority intended to use the Chapter 11 process to “streamline and strengthen its business” operationally and financially. However, the retailer subsequently announced that after being unable to reach a restructuring agreement with creditors, it would pursue a sale of “some or all of the business.” The Sports Authority bankruptcy filing was just one in a recent series that has also included RadioShack and Wet Seal. And some sources predict many more will follow this year. “When you combine a critical mass of Internet shopping, the growing reach of same-day shipping and huge amounts of financial leverage, you have a pretty potent cocktail for disaster,” sums up Tom Mullaney, managing director of restructuring services at JLL. “Financial leverage feels great when it works, but when your top line begins to come under attack—as was the case with Sports Authority or Men’s Wearhouse and its Jos. A. Bank division—your cash flow shrivels pretty quickly, and even more than just small same-store sales declines would imply.” Mullaney tells Real Estate Forum that “there has been far too much money chasing a limited number of deals. And much of that money is fueled by debt, rather than equity. With equity, you can skip dividends.” Bondholders and lenders, he adds, are not quite as forgiving. That would explain the “growing number of highly leveraged retailers that are exploring bankruptcy or are taking dramatic action to stop financial losses before it is too late.” Sports Authority’s initial announcement is another example of the evolution of retailers working to “right-size,” with some having more success than others, notes Ben Terry, a senior associate at Coreland Cos. Some of the retailers Terry expects to hear similar announcements from this year likely will come from the soft goods and electronics categories. “Best Buy might be the next to announce store closings, while Staples has been trying to aggressively downsize from its traditional 20,000- to 25,000-square-foot footprint to 12,000 square feet, to remain competitive,” he says. Staples and Office Depot, which planned to merge, called off the deal earlier this month. Terry explains that “retailers are challenged by the need to correctly balance their brick-and-mortar presence with a powerful online presence. Some, like Dick’s Sporting Goods, are doing it very well and expanding. Others—like the aforementioned Sports Authority—have not been able to figure it out.” The best example, Terry says, might be Circuit City, which filed for bank- ruptcy in 2008 and is now reentering the market with a 4,000-square-foot foot-print. He describes this as “much more realistic in an era in which all electronics can easily be purchased online, but the need to touch-and-feel still exists.” Filling traditional big-box space with a single retailer is a challenge today, Terry continues. “There are a number of new concepts expanding in and entering the market looking for the ‘sweet spot’ between 8,000 and 25,000 square feet,” he says. “Many of the vacant big boxes will have to be subdivided to accommodate smaller discounters, gyms, specialty grocers and even a few soft goods and electronics concepts.” Hibbitt Sports is entering Southern California with a 5,000- to 6,000-square-foot concept, he says, similar to Big 5, “but with a strong online brand and a brick-and-mortar target presence in secondary and tertiary markets.” And Ryan Imbrie, managing director for SVN—Imbrie Realty and chair of SVN’s Retail Product Council, agrees, noting that retail companies must adapt or perish. The question becomes, what changes are necessary to survive? At a macro level, Imbrie says, retail sales grow as a whole, but unfortunately, not all retailers are experiencing this trend. “With the announcements of the Chapter 11 bankruptcies of Sports Authority, Radio Shack, American Apparel and several others in the past 12 months, it is apparent that these brands, or potentially their shopping experiences, have fallen out of favor with shoppers. Retailers need to continue to think forward and target the emerging demographic groups.” The importance of the Millennial shopper—“the Holy Grail for retailers,” Imbrie says—is ever-present. “They represent the largest age demographic and have an increasing earning power, but their shopping behavior is radically different than prior generations. Millennials don’t desire the all-in-one shopping experience and are more likely to search for products online. With detailed product information, customer reviews and price comparison at their fingertips, products are only a click away. Retailers who hope to remain relevant must adapt their business model to court this new style of consumer.” And while some retailers file Chapter 11 to help “streamline” their business, others are joining the retail revolution by looking to scale down or vacate their premises altogether. In Phoenix, for example, many retailers are looking for a more efficient footprint that meets the needs of the modern user. LevRose Commercial Real Estate retail team recently told Forum sister publication GlobeSt.com that there is a lot of “push for adaptive reuse” for many cities in the Greater Phoenix market. For example, “our major cities are working with specialists in economic development to create strategies that can revive their downtown areas. The need for a center of entertainment, culture and influence is becoming increasingly popular and of high demand. Each city is looking for a way to define itself with a significant downtown development,” reports the Scottsdale, AZ-based team, made up of senior vice presidents Trenton McCullough, Peter McQuaid and Greg Vanlerberghe, plus associate Mark Cassel. New retail development and “adaptive reuse” is something to pay attention to, according to the LevRose team. “Although good for the economy and state development, it can potentially have a negative impact on the existing retail centers in the area since they would no longer be as desirable to prospective and current tenants. Future development will add retail space that will begin to replace the less desirable product, growing vacancy in older, less up-to-date centers.” The team adds that “This clearly can present opportunities for some buyers that are more hands-on and have the wherewithal to revitalize a center.” Further, the team says that “sellers with older or outdated retail centers may not see benefit from these new developments as they will need to adjust their property values or pricing accordingly.” Whether a seller or buyer of a retail asset, both will need to pay attention to interest rates in the coming year, says the LevRose retail team. “The value of retail assets should continue to grow, and buyers can expect to pay prices that reflect lower cap rates and a higher price per square foot. There should be some good opportunities this year and into 2017.” It isn’t just the retail tenants that must evolve, but retail owners as well. One company that has focused on finding new ways to optimize retail assets is Irvine, CA-based Passco Cos. LLC. According to the firm’s VP of retail acquisitions, Bob Peterson, the retail sector is undergoing tremendous change as consumer wants and needs evolve. “The ability to adapt quickly to changes in consumer preferences has never been more critical for retailers and retail owners.” Like the LevRose team, Peterson agrees that consumers today are demanding retail environments where they can not only shop but also build meaningful experiences with friends and family. “Retail owners who are shifting the focus of their centers to highlight this experience are the ones that will continue to thrive and drive traffic.” Peterson tells Forum that this shift in consumer preferences places a higher emphasis on retail owners to acquire top-tier centers in high-quality locations, or necessity retail centers. For example, he points out that premium class A centers in top locations and necessity retail are well positioned to withstand shifts in consumer preferences, whereas inferior centers will continue to struggle as the retail landscape evolves. “Retailers today are focused on driving sales and traffic and are less concerned with the overall cost of rent. Therefore, these retailers are gravitating to the sales-driven centers that can provide increased traffic, and that is the premium centers.” These centers remain a top choice among retail investors because they are positioned to increase rents and attract high-quality tenants over time, Peterson explains. “Inferior centers, on the other hand, are unable to simply lower rents in an effort to attract new tenants and will likely have difficulty attracting and retaining tenants as the market continues to shift.” Inferior centers will also be significantly more impacted by retailers who are not adapting their strategies to adhere to the changes in consumer preferences than premium centers, Peterson says. For instance, Macy’s recently revealed that it is closing its location at the Irvine Spectrum, a class-A center in Irvine, CA. Yet the loss of an anchor tenant won’t have a significant impact on the premium center. Rather, the Irvine Co., the owner of the Irvine Spectrum, “views Macy’s leaving as an opportunity to reposition this space and further create the experiential factor that consumers are demanding,” explains Peterson. “That said, if Macy’s or other large anchor tenants were to leave an inferior center, it’s unlikely that it would be able to recover.” At the same time, owners are paying much closer attention to the selection of tenants within their centers, Peterson says. “They are closely monitoring what retailers are doing in their niche markets and how they will perform long term.” Owners are also shifting their focus to bring in more restaurant- and lifestyle- focused tenants to further drive the experience factor, says Peterson. “This will help to create a balanced tenant mix that can with-stand shifts within the market and the overall reduction of retail tenants due to the growth of e-commerce.” Omni-channel retailers will remain desirable for landlords as they continue to outpace retailers who have not implemented this strategy, he explains. “These retailers are adapting their strategies to the changing consumer and will provide more stability to a retail owner over time. They are downsizing their physical stores, increasing the size of their regional distribution centers and implementing strategies to provide ease of returns for consumers.” He cites Amazon—the ubiquitous online retailer who is now opening brick-and-mortar locations—as a perfect example of this. “This omni-channel approach allows retailers to expand sales by drawing a consumer into a physical location for a return.” The evolution in retail is also changing how Bayer Properties approaches development from the very beginning of the process. The firm’s retail brand strategist, Lindsay Bayer Shipp, says that there is a new emphasis on architecture that wasn’t there before. “Tenants want to weigh in on the look of their stores and make sure the architecture serves as an extension of their brand.” Retailers like Bonobos and Shake Shack, she says, are invested in creating a space that speaks to their brand. “There is a new emphasis on ‘local,’ and developers are focused on architecture that speaks to the market where the property is located and incorporating materials that feel authentic.” One thing on which developers and owners really need to concentrate, according to Bayer Shipp, is how omni-channel retailing is going to play a role in shopping centers. “Whether that’s interactive dressing rooms or kiosks for picking up and returning online orders, there needs to be a focus on figuring out how to complement what retailers are doing.” The lines between the brick-and-mortar and e-commerce worlds are blending more than ever with the rise of omni-channel shopping, observes Jeff Edison, principal and CEO of Phillips Edison & Co. Consumers still prefer to do their grocery shopping at their neighborhood shopping centers, but he says the grocery sector is adapting to the tech revolution. “While grocery’s integration of brick-and-mortar and e-commerce is still in its early stages, the leading grocers in our portfolios are already ahead of the curve,” says Edison. “With time constraints and busy schedules now the norm for most consumers, they’re becoming more comfortable with shopping online for groceries. Brick-and-mortar grocery stores are becoming more tech savvy and cognizant of their customers’ time.” In addition, stores are adding more prepared foods for consumers who are on-the-go, he explains. Walmart and Kroger have been rolling out click-and-collect programs that allow consumers to order their goods online and pick up instore. “Grocers are turning their stores into warehouses and continuing to prove that they are the best retailers to deliver goods the last three miles to the consumers’ home.” And it isn’t just the front end of the grocery industry taking advantage of technology, adds Edison. Back-end systems are also beginning to transform inventory tracking. For example, he says that Whole Foods has taken advantage of a system called Powershelf, which helps retailers reduce their out-of-stock items. “When a shopper lifts the last item off the shelf, a store employee instantly receives a text message notifying him or her of the exact product that needs to be restocked. This system also includes digital price tags, which allow the retailers to change their pricing on the fly.” Like most retail brands, grocery stores have also taken advantage of social media advertising as a popular way to reach their audience, Edison explains. Instagram, specifically, has become a successful and growing way for grocers to tap into their social demographic. Whole Foods recently ran an Instagram campaign where it asked its followers to share a picture of their favorite summer food adventures every Monday through Labor Day and awarded the winner of the contest with $25 and other summer goodies. From a financing perspective, today’s retail owners must be proactive in identifying the funding they need to keep up with consumer demand, explains Shahin Yazdi, a principal at George Smith Partners. But while financing is certainly available, lenders continue to be careful. Owners planning for renovations will need solid business plans and pre-leased units in order to demonstrate their strength to potential lenders. He adds that leasing remains a tremendous factor in the retail lending environment. “Often, the first question a lender will ask is: How many vacancies does the center have and when are the majority of the leases coming due?” For small centers, Yazdi says, owners should be ready to sign recourse loans when funding is needed. “Non-recourse financing is especially difficult for centers with mom-and-pop tenants. There are some exceptions, however.” GSP recently helped the owner of a Southern California center 100% occupied by mom-and-pop businesses to secure a low-leverage, nonrecourse cash-out refinance, he says. The owner had purchased the property the prior year and leased up the entire space, which was attractive to the lender. When it comes to financing, the principles have not changed, says Yazdi. “Lenders are looking at the credit of tenants, the terms of leases, where rents are compared to other centers in the market, as well as the strength of a center’s location.” Beyond the basics, there is a great deal of volatility in the CMBS market that is strongly affecting the current retail lending landscape. “Approximately $160 billion in CMBS loans will mature by the end of 2016, and it is predicted that only $60 billion of that total will be able to be refi- nanced by CMBS lenders,” he says. “This has a huge effect on the market from a macro level. Lenders are working to achieve wider spreads and are being more conservative as the uncertainty of the CMBS market is navigated.” The pressure of these CMBS changes will be felt most deeply in tertiary markets, Yazdi explains. “That said, as this market changes, lenders will look to new structures to fund today’s retail owners by providing mezzanine debt and preferred equity.” The market doesn’t know what to make of retail right now, explains Sanford Sigal, president and CEO of NewMark Merrill Cos. “Their paradigm of sales growth, then same-store sales, or store growth, have all led them down a path of a lot of unintended consequences. Some of the corporate bond prices are unbelievably cheap for very functional retail, and others are fully priced for those on the edge,” he says. But one thing is for sure, adds Sigal. “Today’s greatest, most secure tenants can be only a year away from extinction if they are not proactive, creative and responsive to changes in the marketplace.” *This article was originally published in [Real Estate Forum’s May 2016 issue](http://www.reforum-digital.com/reforum/may/?pm=1&u1=friend&pg=26#pg26).* **Categories:** Passco News --- ### [As National Chains Scale Back, Independent And Regional Retailers Rise](https://www.passco.com/as-national-chains-scale-back-independent-and-regional-retailers-rise/) **Published:** May 17, 2016 **Author:** Synoptek Web Dev **Content:** *This is a guest column from Todd Siegel, VP of retail at Passco Companies, for ICSC RECon 2016.* The retail landscape continues to evolve and retail owners are taking note. Over the last few years, there has been a significant shift in the types and size of retailers occupying retail space across the country. The question is what is causing this shift and are we seeing a reemergence of the independent and regional retailer? We all know this story: The catalyst for the change comes from both changing consumer demand, demographics, internet competition and national retailers actively looking at closing “underperforming” stores and “right sizing” their existing locations. This has made space available generally among some class-B and -C centers, creating a unique opportunity for growth among independent and regional retailers. These centers traditionally were dominated by the national tenants. These changes have led to the growth of the independent and regional retailers, especially the restaurant and “foodie” operators. These “Mom & Pops” of yesterday are not the same today. They are more sophisticated and savvy in their presentation, operation and overall execution. Consumers are demanding new niche concepts and restaurants that cannot be replicated by national chains. They are seeking unique experiences and environments that aren’t “typical” and cannot be found throughout the rest of the country. These independent and regional operators are becoming a viable option among landlords, providing new and exciting concepts that were not common among Mom & Pop retailers of the past. In today’s retail environment, it is important to incorporate a healthy mix of independent, regional and national tenants. As we move forward into 2016, we will see the growth of the independent franchisee; mainly newer concepts and recognized names with a local owner. We anticipate continued strong demand and rapid growth by this group for available space in centers across the nation. *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/geofferymetz/2016/05/17/as-national-chains-scale-back-independent-and-regional-retailers-rise/?kw=As%20National%20Chains%20Scale%20Back%2C%20Independent%20and%20Regional%20Retailers%20Rise&cn=20160517&pt=National&src=EMC-Email&et=editorial&bu=REM&slreturn=20160417112051).* **Categories:** Passco News --- ### [Divorce Rate Drives Demand for Multifamily Properties](https://www.passco.com/divorce-rate-drives-demand-for-multifamily-properties/) **Published:** May 17, 2016 **Author:** Synoptek Web Dev **Content:** When it comes to demand for multifamily communities, there are usually two demographics that come to mind: millennials and baby boomers. What most people don’t realize, however, is that even though both groups drive demand for multifamily properties, there’s a third subset of individuals doing the same—divorced people. According to the Census Bureau, there are approximately 107 million single people 18 or older living in the United States. Of that 107 million, 24% are divorced. This equates to 25.7 million individuals. In addition to this 25.7 million, approximately 876,000 new divorces occur each year, or one every 36 seconds. This number doesn’t imply that there isn’t a significant amount of happy and successful marriages throughout the U.S.; it simply indicates that divorce is a reality and one that shouldn’t be ignored, especially by multifamily owners and investors. **Divorce Rate on the Rise** According to a report by Sheela Kennedy and Steven Ruggles from the Minnesota Population Center at the University of Minnesota, the divorce rate in the U.S. has been steadily increasing for the past 30 years. Currently, 50% of all marriages in the country end in divorce. Over the course of 15 years, from 2000 to 2014, the average number of Americans who got married each year was 2.3 million. With that number of marriages annually in the United States and a 50% divorce rate, demand for multifamily units has the potential to continue to outpace supply for several years, even if just one-quarter of newly divorced people were to enter the multifamily housing market. According to MPF Research, 225,000 apartment units were built in 2015, and it is anticipated that by the end of 2016 another 315,000 across the U.S. will be constructed. While not every divorced person moves into an apartment, more than three times as many people divorced last year as the number of new apartments built. Marriage often signifies a step toward buying a home and starting a family, often preceded by newlywed renters leaving the multifamily market. When divorce occurs, the opposite often happens. During or after a divorce, one or both of the individuals involved are likely to move back into rental housing, on either a temporary or long-term basis, due to a reduction in the amount of income formerly available as well as uncertainty regarding where to live. As half the marriages in the country continue to fail, multifamily owners will want to develop properties with the newly divorced in mind. Here are a few ways owners can ensure that their communities appeal to this third demographic and driving force behind multifamily demand: **1. Incorporate Kid-Friendly Amenities** Many times when a divorce occurs there are children involved. This means that multifamily owners who integrate kid-friendly amenities into their properties will often be newly divorced parents’ top option. They’ll want communities that help build a sense of home and include areas and gatherings where their kids can meet and play outside. These include playgrounds, large outdoor community spaces, family community events, swimming pools, and dog parks. Parents will also seek developments with amenities such as fitness centers with adjacent playrooms so they can exercise while their children play within sight. Similarly, party rooms, theaters, and pools with outdoor kitchens that can be used for birthday parties or other children’s events will attract this clientele. By incorporating family-friendly amenities into their apartment community, owners can appeal to this growing demographic and help create a sense of home for divorced residents and their families. **2. Choose Walkable Locations** Apartment communities with high walkability scores will also appeal to this demographic. Such communities will be close to major employment hubs and schools, as well as grocery stores, retail shopping, and entertainment. During marriage, one spouse may decide to stay home and not work. After a divorce, however, that individual will likely need to re-enter the workforce. This is why it is imperative to be close to major employment hubs. In addition, if the couple divorcing has children, both parties will want to be close to good schools. By providing easy access and increased walkability to these surrounding amenities, owners can create environments that appeal to divorced people. **3. Include Concierge Services and Community Activities** Apartment communities that take a page out of the hospitality industry and integrate concierge services such as on-site dry cleaning, dog-walking services, and housekeeping will also appeal to this demographic. Often when a couple gets divorced, chores that used to take two people to complete will fall on the shoulders of one. This means that apartment communities that provide conveniences and services can be especially appealing to newly divorced renters. Community activities such as wine tastings, foodie events, movie nights, and other events that encourage social interaction will also play a significant role in attracting this demographic. These individuals are likely starting fresh and will want environments where they can mix and mingle, make new friends, and begin a new chapter of their lives. Such events can help them build new social ties. The national divorce rate is having a tremendous impact on the demand and need for multifamily units throughout the U.S. By paying attention to this growing demographic and catering to its needs, apartment owners can provide housing for an important segment of the population. *This article was originally published in [Multifamily Executive](http://www.multifamilyexecutive.com/property-management/demographics/divorce-rate-drives-demand-for-multifamily-properties_o).* **Categories:** Passco News --- ### [Passco Puts Down $54M On TOD Multifamily](https://www.passco.com/passco-puts-down-54m-on-tod-multifamily/) **Published:** May 5, 2016 **Author:** Synoptek Web Dev **Content:** The Ivy, a 248-unit, class A+ newly-constructed multifamily complex in Orlando’s Florida Hospital Village has traded hands. The sale price: $53.5 million. Passco Companies acquired the multifamily asset. Florida Hospital Village is the second-largest hospital in the nation. “The significant job and economic growth throughout Orlando is a major factor driving the multifamily market,” Colin Gillis, vice president of acquisitions in the Southeast for Passco, tells GlobeSt.com. “Orlando is leading the country in employment gains and is poised for strong growth over the next five years, ranking as one of the top five markets for annual apartment rent growth.” Collins points to a recent report by the US Department of Labor that reveals Orlando created more jobs than any other metropolitan area in the nation in 2015. That puts Orlando first for employment gains and second for population growth. As he sees it, “This rapid job creation, especially in the healthcare sector, coupled with the huge immigration of workers will continue to drive demand for multifamily housing in the area, making this a strong addition to our existing portfolio.” A transit-oriented property, The Ivy sits along the Interstate 4 corridor near major employment centers at 2650 Dade Avenue. Right now, it’s the only multifamily property within Florida Hospital’s Health Village, which is home to more than 10,000 high-quality healthcare jobs. The multifamily property is within a five-minute walk to one of four downtown stops for Orlando’s 62-mile Sun Rail project. “Nowhere are we seeing more progressive and innovative development than in Orlando, Florida,” says Gillis. “The City of Orlando recently invested nearly $8 billion in infrastructure and transportation projects, inclusive of the Sun Rail commuter line and an expansion of the I-4.” Constructed in 2015, The Ivy offers multi-level pool decks with a resort-style swimming pool, a fitness center, and yoga studio. Wood Partners developed the asset and will continue to manage the multifamily property. “There is no doubt that this asset is poised for strong rent growth,” says Gillis, who notes that despite the asset’s upscale amenities and urban appeal current rents are considerably below market value. “Overall, this property is well-aligned with our continued strategy of acquiring class A assets with long-term appreciation potential in strong growth markets.” Shelton Granade, vice chairman at CBRE represented Passco and the seller. Chris Black of KeyBank Real Estate Capital’s commercial mortgage group arranged acquisition financing for Passco through Fannie Mae. *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/jenniferleclaire/2016/05/05/passco-puts-down-54m-on-tod-multifamily/?kw=Passco%20Puts%20Down%20%2454M%20on%20TOD%20Multifamily&cn=20160505&pt=Atlanta&src=EMC-Email&et=editorial&bu=REM&slreturn=20160405115850).* **Categories:** Passco News --- ### [Passco Sounds the Right Notes with Nashville Acquisition](https://www.passco.com/passco-sounds-the-right-notes-with-nashville-acquisition/) **Published:** April 13, 2016 **Author:** Synoptek Web Dev **Content:** Passco Companies has acquired The Overlook multifamily community in Nashville, Tenn., for $51.4 million. The 452-unit apartment community features units with large open-plan floor plans of up to 1,250-plus square feet in size. Highly-sought amenities include a high-end fitness center, two pools with cabanas and meticulously landscaped grounds. While The Overlook features an array of upsides, such as high occupancy and good maintenance, it hasn’t been updated in nearly 20 years and rents are below market rates. That has convinced Passco to undertake some interior upgrades soon, while at the same time initiating a professional management program. Longer term, with housing demand in Nashville steadily climbing, The Overlook is expected to provide quality housing for about half the price per square foot of the downtown market, which bodes well for future value increases. In 2014, Passco acquired Cambridge at Hickory Hollow, a neighboring multifamily community in the same neighborhood, and at that property has driven value through similar upgrade programs. It acquired The Overlook based on its experience in Nashville and its expectations of continued submarket growth. The Overlook is located within bike-riding distance of employment and shopping. An additional 1,600 healthcare jobs will be created with the arrival of a new Community Health Systems office campus anticipated next year. The apartment community is also a mere 15-minute drive to Vanderbilt University and Medical Center, as well as Nashville’s downtown core. There, almost three million square feet of new office space is in the development pipeline. “Nashville’s rapid growth is no longer news to anyone,” said Colin Gillis, vice president of acquisitions, Southeast, for Passco Companies. “We were seeking another opportunity in the market, as it perfectly matches our continued strategy of identifying and acquiring value-add and core assets in growing markets throughout the country that are positioned to perform well over time. “In fact, we are now pursuing additional multifamily opportunities here.” CBRE Senior Vice President Russ Oldham represented both the buyer Passco and the seller Olympus Properties. Chris Black of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing for Passco Companies through Fannie Mae. *This article was originally published on [Multi-Housing News](https://www.multihousingnews.com/post/passco-sounds-the-right-notes-with-nashville-acquisition/).* **Categories:** Passco News --- ### [Multifamily Matters: Destination Unknown](https://www.passco.com/multifamily-matters-destination-unknown/) **Published:** March 29, 2016 **Author:** Synoptek Web Dev **Content:** The past several years have been a smooth ride for the apartment industry. Yet multifamily players now have mixed feelings about where the road ahead will lead. Put a group of multifamily developers and investors in a room and it wouldn’t be difficult for them to reach consensus on the gangbusters success of the segment over the past few years. General economic factors and several demographic trends have worked strongly in their favor. But ask the congenial group for a 2016 and beyond forecast and opinions splinter. Seeing the market’s results throughout the recovery, some multifamily buyers and builders are decidedly bullish. Others, fully aware of the axiom that what goes up must come down, see signs that the market may be headed in the wrong direction. “Apartment fundamentals are better than ever,” declares Colin Gillis, Southeast VP of acquisitions at Passco Cos. “Year-over-year cap rate compression from 2014-2015 averaged around 10 basis points across all asset and location classes while the 10-year treasury rate came in 40 basis points over that same period, leaving around a 300-point spread between the two rates.” He explains, “Once we see the gap between cap rates and the 10-year treasury dip below the historical average of around 150 basis points, that’s when the market begins to feel overheated. We would need a major swing in the market for that to happen.” Adds R. Ramin Kamfar, founder, chairman and CEO of Bluerock Real Estate, a private equity real estate firm that sponsors Bluerock Residential Growth REIT, “We’re in the fifth or sixth inning and the game is a double header. “The Millennial generation is coming into the prime rental age of 201 to 34 and that generation of 80 million is larger than the baby boomer populations,” he states. “Over the next 15 years, it will form another 30 million households. Further 70% of Millennials will rent for 10 years or longer, so we’re in a good demographic cycle.” Kevin Finkel, EVP, Resource Real Estate, notes that we’re starting to see middle-class baby boomers “bubble back into rentals because they’re selling their homes. It used to be that, when you were 65, you just talked about the next 10 years, but now people are saying that may be around for a while. I see silver-haired people – in velour sweat suits – walking around our property all of the time now.” Economic and industry research supports their claims. Marcus and Millichap’s national multifamily forecast for 2016, which ranks 46 markets, reports, “In 2016, GDP will grow from 1.5% to 2.5%. Job openings hovered near all-time highs in the second half of 2015, signaling that employers see additional expansion opportunities that will require more workers on the horizon.” Further, MMI’s analysis reports that not only were new rentals absorbed in substantial numbers last year, but an expansion of US payrolls – along with the aforementioned demographic trends will also generate new households, supporting a 5% jump in the average effective rent this year, and continued new demand and solid asset operations. However, the firm had some bitter news on apartment development. “Elevated completions will exceed demand and underpin a nominal increase in the US vacancy rate in 2016. Multifamily starts remained elevated nationwide, pointing to additional supply pressures over the near term. Several metros will record supply-induced vacancy increases this year.” Marcus & Millichap is not alone in that sentiment. “The market may be overheating,” observes David Schwartz, co-founder and CEO, Waterton. “Valuations are very high and when you see them so much above their prior peak while cap rates are at historic lows, it raises your antenna. “There’s good demand,” he admits, “but we might have overshot it so rents may taper or flatten. When you have tremendous supply deliveries you likely will see concessions, vacancies and rent drops.” Cautions Capital One multifamily finance’s SVP, Kristen Croxton, “If apartments continue to perform well, we may see people step aside because cap rates will keep compressing and it will no longer make sense for some investors. I wouldn’t be surprised if we saw smaller portfolios of 10 to 15 properties change hands. If they feel they got in at the right time, the smaller investor will likely want to get out before things get too heated.” Others see growth ahead but in less popular markets and product types. Arbor Commercial Mortgage chairman and CEO Ivan Kaufman, for instance, has only seen deliveries in the luxury segment due to the increased costs of land and labor. “New supply is disproportionately downtown, partly because that’s where Millennials want to be,” he suggests. “So there’s huge opportunity in the affluent suburbs where existing apartments need significant renovation and the barriers to entry are blocking new projects. This is really the sweet spot. For lower income, there are government programs but if you’re a workforce person in the middle, no one is building for you.” Schwartz agrees. “Everything being built is being designed for the highest level renter; it’s an arms raise for amenities. The market could get overbuilt within that niche.” Even the bulls are eyeing slightly off-the-beaten-path markets. “We evaluate opportunities on a deal-by-deal basis and try not to rule out certain locations due to stigmas,” concedes Gillis. “We will continue to evaluate all class A opportunities across both the primary and secondary markets of the Southeast.” But while Gillis sees pockets of opportunity, he has concerns, too. “We are exercising an extreme amount of caution toward specific submarkets with high concentrations of development of homogenous product as opposed to blackballing an entire market.” As examples, he cites midrise assets in the Buckhead area of Atlanta; the Downtown-West-End-Midtown section of Nashville; Charlotte CBD; garden assets along the International Drive corridor in Orlando; and garden assets in the Southside/Bay Meadows submarket of Jacksonville. Those are some submarkets, and product types, in which a lot of similar developments are chasing the same tenants, leveraging off of the same employment drivers and underwriting the same rents. For BlueRock’s part, says Kamfar, the REIT is in the top 40 markets below the leading coastal cities, such as New York City, San Francisco and Washington, DC. “In those gateway cities we find a lot of capital chasing deals, and valuations to be expensive, at cap rates of 3.5% to 4%,” he says. “Geographically, we’re not in the Midwest, because they lack strong job growth on a percentage basis.” In short, the firm looks for markets that will deliver high disposable-income jobs – such as in the fields of healthcare, education, technology, finance, trade, entertainment and high value manufacturing – for the foreseeable future. The peril of larger markets is also clear to Matt Nix, principal of REVA Development Partners. “In Chicago, the Downtown class A rental market could be on the brink of overheating with approximately 8,000 units scheduled to deliver through 2017. That is one of the main reasons our focus is on the inner-ring suburbs.” Nevertheless, urban communities are where most multifamily investors and developers are putting their efforts. “The number of apartment units inside CBDs jumped 19.5% from about 1.4 million units in 2005 to 1.6 million units in 2015,” according to MPF Research. “This increase marks a rate of more than double that of unit growth in the suburbs.” During a panel discussion at the National Multi Housing Council’s 2016 Apartment Strategies Conference, Holland Partner Group chairman and CEO Clyde Holland said, “We only want to build in absolutely high-quality living environments in the urban core – and that’s it. As traffic gets worse and more expensive in terms of time and cost, there’s more demand for urban core product.” High Street Residential, a subsidiary of Trammell Crow Co., sees the appeal of cities too, principal Josh Dix tells Real Estate Forum. “In Dallas/Ft. Worth, twice as many jobs are being created during the current economic cycle compared to last. With population growth exceeding 160,000 per year, the supply of new units is not meeting the demand.” In Washington, DC, he continues, “The media declared that the area had a glut of apartments in 2013. However, concern of an overheated market at the time failed to take into account many of the fundamental changes that continue to benefit the multifamily industry. DC experienced record absorption in 2013, ’14 and ’15.” Adds Kaufman, “The highest concentration of multifamily development over the next four years is projected to occur in New York, Nashville, Seattle, San Francisco, Washington, DC, and Charlotte. So far, apartment demand and household formation in these markets has kept pace with development, and demographics for continued strong absorption remain favorable.” Much depends, though, on where rents are headed and what apartment dwellers can afford. “Wage growth has not kept up with rent growth coming out of the recession,” Kaufman points out. “This affordability squeeze is unfortunately making it harder for aspiring homeowners to save up for a home loan down payment.” Schwartz, too, sees an affordability problem. “Many renters in the country are spending half of their income on rent while wage growth isn’t occurring, so they’re spending more on rent and less on other things, such as cars or groceries. This will continue because we’re not seeing homeownership increase and when you look at what’s being built, it’s all luxury.” The disparity between rising rental rates and stagnant wage growth – despite healthy job creation – is a significant challenge, concurs Dix. “Reasonable solutions include smaller units – and even micro-units in some markets – as well as a decent level of affordable housing integrated into market rate deals, as long as it’s predictable and fairly applied,” he relates. “Additionally, we continue to evaluate means and methods of construction to further reduce costs while not sacrificing the quality of the living experience.” The imbalance between wage and rent growth will only continue, predicts Kaufman. “As new unit deliveries ramp up, rent growth will slow down while concessions are made to get these properties stabilized.” At the same time, he notes, “Rents are increasing significantly. Looking back at 2015, we saw average asking rents increase nearly 5% nationally yet we have not seen any meaningful wage growth since the late 1990s.” Gillis amplifies the point. “Many of the primary markets we track have experienced year-over-year rent growth as high as 12%, with many averaging over 6% annually for the last two years. This type of explosive growth does not feel sustainable through 2016.” One factor helping developers and investors, though, is a generally positive lending environment for borrowers. “There is an ample supply of debt and equity for best-in-class developments,” says Nix, adding that lending standards haven’t eased significantly, so the norm is conservative underwriting, relatively low leverage and personal guarantees. “Attractive financing will continue to be available,” forecasts Kamfar, “because of the appeal of the assets we are buying – class A assets in high quality markets – and because we are only using moderate leverage.” “We don’t see changes in the financing market for our product on the horizon,” he says. “The CMBS market may have some issues given new risk-retention rules that are going into effect at the end of this year.” Croxton lends support to that theory. “Conditions are very volatile in the CMS market right now. “Pricing seems to be stabilizing some but we are hearing that many of the shops are reducing leverage and interest only. They’re still going to chase the good properties with strong borrowers but I don’t think we’re going to see the big numbers for total production that people were projecting a few months ago.” *This article was originally published in [Real Estate Forum’s February/March 2016 issue](http://www.reforum-digital.com/reforum/feb_march_2016/?pm=2&u1=friend&pg=62#pg62).* **Categories:** Passco News --- ### [Connect Retail West: Evolution of Retail- Cap Rates and NNN Investments RECAP](https://www.passco.com/connect-retail-west-evolution-of-retail-cap-rates-and-nnn-investments-recap/) **Published:** March 23, 2016 **Author:** Synoptek Web Dev **Content:** At this year’s Connect Retail West, Bob Peterson, Passco’s Vice President, Investments, sat on the Evolution of Retail pane, discussing how retail’s face is changing. In the evolution of retail, should you be chasing cap rates or are other property types becoming more attractive investments? How does M&A activity affect NNN properties? [Connect Retail West: Evolution of Retail- Cap Rates and NNN Investments RECAP](https://vimeo.com/160013444) from [Connect Media](https://vimeo.com/connectcre) on [Vimeo](https://vimeo.com/). **Categories:** Passco News --- ### [Top Trends To Watch: Multifamily Investment](https://www.passco.com/top-trends-to-watch-multifamily-investment/) **Published:** March 18, 2016 **Author:** Synoptek Web Dev **Content:** What’s new in multifamily? As the darling of commercial real estate investment for the past few years, this product type has some interesting trends in store. Below are the key factors Passco’s Ogal Claspell, Senior Vice President, Realty Investments, believes will likely grow and change the multifamily market throughout the rest of the year. **High Rate of Development Will Continue** A continued high rate of multifamily development throughout the nation will arguably be the most impactful trend of 2016. The impact of this activity will play out differently in each market. As a result, multifamily investors will need to be even more dutiful when it comes to due diligence and local research in target investment markets. *Ogal’s Prediction:* Investors will spend more time talking to local municipalities and local brokers over the coming months to ensure they understand the planned new developments in metro areas, submarkets, and competing markets. **Downward Pressure on Cap Rates Will Slow** Investor activity will continue to thrive as the year progresses, and competition for quality multifamily product will remain high. Even in this competitive environment, the year will likely bring a slowdown in pricing increases. This, in turn, will reduce the rate at which cap rates are compressing in the market. *Ogal’s Prediction:* Expect pricing to stabilize and the rate of cap rate compression to slow by the second half of 2016. **Secondary and Tertiary Markets Will Pick Up Steam** An increasing number of multifamily investors will look to secondary and tertiary markets for investments. The pricing gap has narrowed between these markets and primary/gateway cities, which opens the door for many investors who might not have considered these markets five to six years ago. *Ogal’s Prediction:* Even institutional investors will increasingly widen their investment criteria to include secondary and tertiary markets as the year continues. **Non-GSE Lending Will Increase** Five years ago, the market share for GSE (government-sponsored enterprises) lenders in multifamily lending was in the high 60 percent range. That market share is currently in the high 40 percent range. CMBS lenders and regional/local banks alike have entered the multifamily lending market, and the lending market is likely to continue to diversify as this year progresses. *Ogal’s Prediction:* Non-GSE lenders will continue to recognize the ongoing investor appetite for multifamily product, prompting them to look for new ways to increase their market share in this business. **Dialogue Surrounding Workforce/Affordable Housing Will Increase** A large segment of the renting population is getting squeezed out of new multifamily product that is coming online as lease rates climb throughout the nation. As a result, workforce and affordable housing will emerge as the newest “hot topic” for multifamily investment. *Ogal’s Prediction:* Expect to see increasing news and conferences centered around this product type, both this year and beyond. **Unit Sizes Will Continue to Decrease** The average unit size continues to shrink, especially in urban markets, as multifamily development ramps up throughout the U.S. This is a trend that will continue for the rest of 2016, and likely into the foreseeable future. As unit sizes get smaller, however, common areas get larger. The multifamily market will likely deliver larger clubhouses, fitness centers, and outdoor areas over the next few years to accommodate social gatherings and community engagement. *Ogal’s Prediction:* Though smaller units are currently en vogue, developers who are catering to an older demographic will continue to deliver projects with larger unit sizes. The fact is, micro-units are for Millennials. **Real Estate Data Will Get Bigger** Big data has been around for a long time. Unfortunately, the real estate industry has been slower to adopt big data than many other industries. We’ll see that start to change as 2016 progresses. *Ogal’s Prediction:* The next few years will bring new interest in understanding the nuances of today’s renters. We will likely see commercial real estate professionals increasingly integrating big data into their research. As each of these trends unfold, multifamily investors with a strong strategy in place and a finger on the pulse of targeted investment markets will continue to find success. *This article was originally published in Western Real Estate Business’s March 2016 issue.* **Categories:** Passco News --- ### [Passco Enters Local Market With $70M Deal in Alexandria, Virginia](https://www.passco.com/passco-enters-local-market-with-70m-deal-in-alexandria-virginia/) **Published:** March 10, 2016 **Author:** Synoptek Web Dev **Content:** Irvine, Calif.-based Passco Cos. has made its first acquisition in the Mid-Atlantic, scooping up the 240-unit apartment building, The Shelby, for $69.5 million, located in Alexandria, Virginia. The Shelby is located at 6200 North Kings Highway. Ryan Ogden with ARA Newmark represented both the buyer and Insight Properties as the seller in the transaction. Fannie Mae’s Green Building Program providing the financing, which was arranged through Chris Black at KeyBank Real Estate Capital. The Shelby is located about a half a mile from the Huntington metro stop, always a good feature for a building seeking green creds or financing. It was constructed with a wood frame and has an above grade structured parking garage. It was also designed to LEED Silver certification. Insight estimates that the project costs were about $53.6 million. Passco sees the Shelby as appreciating in value over the long term, according to Gary Goodman, SVP of Acquisitions at Passco. The region’s growth, the Shelby’s proximity to the metro and employment trends “will continue to increase property value and drive up market rents over time,” he says. “The result will be increased long-term cash flow and stronger returns.” *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/erikamorphy/2016/03/10/passco-enters-local-market-with-70m-deal/?channel=markets§ion=washington-dc).* **Categories:** Passco News --- ### [On the Cover of California Centers](https://www.passco.com/on-the-cover-of-california-centers/) **Published:** March 1, 2016 **Author:** Synoptek Web Dev **Content:** We are pleased to announce Day Creek Village, our latest retail acquisition in Rancho Cucamonga, California, was featured on the cover of California Centers for the March 2016 issue. This 25,000 square foot retail center was purchased in January 2016. **Categories:** Passco News --- ### [Dunkin’ Donuts, more restaurants coming to Hanford Mall](https://www.passco.com/dunkin-donuts-more-restaurants-coming-to-hanford-mall/) **Published:** February 25, 2016 **Author:** Synoptek Web Dev **Content:** Dunkin’ Donuts is officially coming to the central San Joaquin Valley. The owners of Hanford Mall announced Thursday that it will open a Dunkin’ Donuts, along with a Pieology Pizzeria, Buffalo Wild Wings and a Five Guys Burgers and Fries. The new restaurants are scheduled to open this summer when remodeling of existing properties is finished. Buffalo Wild Wings will be on the corner of 12th Avenue and West Lacey Boulevard. Dunkin’ Donuts, Pieology Pizzeria and Five Guys will be located on 12th Avenue near JCPenney. Dunkin’ Donuts is likely to attract a lot of attention as the popular doughnut shop – perhaps known for its coffee as much as its doughnuts – does not have any locations in the immediate area. Last summer, a franchisee announced plans to open 17 Dunkin’ Donuts in Fresno and surrounding cities. The company has said it plans to open 275 Dunkin’ Donuts in California over the next few years and eventually more than 1,000 long term. “We anticipate that the local community will be just as excited as we are to have this new addition. This will be the first Dunkin’ Donuts in the area, and we are thrilled to be able to bring this to the local community,” said Hanford Mall general manager Joanne Doerter. *This article was originally published in the [Fresno Bee](http://www.fresnobee.com/living/food-drink/article62479427.html).* **Categories:** Passco News --- ### [Larry Sullivan Elected to the ADISA Board of Directors](https://www.passco.com/larry-sullivan-elected-to-the-adisa-board-of-directors/) **Published:** February 18, 2016 **Author:** Synoptek Web Dev **Content:** Passco Companies, a nationally recognized market leader in the acquisition, development, and management of multi-family and commercial properties throughout the U.S., has announced that Larry Sullivan, the firm’s President, has been elected to the Alternative & Direct Investment Securities Association’s (ADISA) Board of Directors for a 2-year term starting in 2016. Sullivan joined the Board of Directors to become an active participant in providing his input on important issues related to government regulations and any tax law revisions that may evolve in the securities industry. Given Passco’s stature in the industry, Sullivan feels it is important to give back. ADISA is a national trade association that encompasses a core group of decision makers that influence professionals within the management of alternative investments by providing timely education, trends, and resources to help them better serve their clients. **Categories:** Passco News --- ### [What MF Trends Should be on Your Radar](https://www.passco.com/what-mf-trends-should-be-on-your-radar/) **Published:** January 13, 2016 **Author:** Synoptek Web Dev **Content:** In preparation for the multifamily quarterly feature in Real Estate Forum magazine, we sat down with many multifamily experts from around the country. In the first part of this series, we talked about whether or not apartment vacancy will tick upward in 2016. In part two of the series, we reviewed whether or not the market could digest the new supply pipeline. In part three, we talk about rent growth, demand, and whether or not we can expect it to implode in the coming years. This particular question on multifamily, asked sources what trends they are forecasting for 2016 that should be on our radar. Read the below Q&A commentary to make sure they are on yours. **GlobeSt.com: Any multifamily trends you are forecasting for 2016 that should be on our radar? What should we be aware of? Looking forward to? Be fearful about?** **Gary Goodman, SVP of Acquisitions at Passco Cos.:** Multifamily developments will continue to offer a superior environment for Millennials and Baby Boomers. Years ago, due to the basic nature of apartment construction, renters sought the better living environment in a single family home. With high end apartment finishes and elaborate common area amenities, renting has become much more competitive to home ownership and it is likely that this will continue. **Bryan Sullivan, VP of acquisitions and investment at the Habitat Co.:** I believe 2016 will be a very pivotal year for the multifamily industry. In many cases, it will be a reality check to remind us that rents won’t grow at +4% annually in perpetuity. I don’t see a dramatic correction but rather getting closer to a market equilibrium. **Diana Pittro, executive vice president of Chicago-based RMK Management Corp.:** New supply is scheduled to continue in the Chicago market, with amenities and technology being the drivers to attract the younger more tech savvy renter. The more amenities the better. We are also starting to hear about the development of the micro unit, which is the smaller size units that are so popular in NYC and London, while we believe there is a market for this type of unit, we are not sure of its acceptance in the Midwest market yet. Currently I believe owners are fearful of the high tax rates being proposed for Chicago, and also the current ARO ordinance….which requires an affordable component with each new development or very high in lieu fees. These two things could really affect the desirability of being in the Chicago market especially for out-of-town investors and developers. **Josh Dix, SVP in Trammell Crow Co.’s MidAtlantic Business Unit and National Practice:** Vacancy rates are projected to slightly increase up to 5% through Q3 2016 with Y-o-Y rent growth to range between 4% to 5.5% over the next two quarters, and then to somewhat normalize within a smaller range while remaining positive. We will continue to keep a close eye on rent growth however. There is a concern that while absorption has been strong and vacancy low, general affordability of apartments is a concern. Even as continued employment growth contributed to a strengthening multifamily market, generally speaking, wage growth has not kept pace. In terms of trends moving forward into next year: - We continue to focus on making our communities more pet friendly. After all, pets pay rent too! - More efficient utilization of smaller units – this means closet organizers, wall systems and the potential for built-ins. - Continued focus on indoor/outdoor living space. **Philip Martin, vice president of market research at Chicago-based Waterton:** Reduced housing affordability remains a trend that could limit apartment demand and/or result in wider disparities of operating performance (i.e. “A” vs. “B” quality apartment assets, urban vs. suburban markets, primary vs. secondary markets). The majority of the anticipated and incremental apartment unit supply growth is at the high end of the rental rate spectrum. Very little of the incremental apartment unit supply is geared toward serving the needs and demands of the “workforce housing” demographic. What should we be aware of? Investor demand for institutional quality apartment investment remains strong, especially internationally. Incremental apartment unit starts may come in lower than expected in 2016 due to labor shortages/cost of labor, and the lack of available and affordable land. Looking forward to? Household formation growth outpacing that of aggregate housing supply growth. Be fearful about? Reduced housing affordability. **Steve Patterson, president and CEO of Related Development LLC (the multifamily division of The Related Group):** We hope that we begin to see construction tradesmen from the prior cycle coming back to the construction industry now the labor prices have risen so drastically in recent years. We are currently building at the same pace as last cycle with a much smaller labor pool. Many will return from the oilfields for lack of better options. Without significant growth to the construction labor pool we will see yet another year of double digit construction cost increases. *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/globest/2016/01/13/what-mf-trends-should-be-on-your-radar/).* **Categories:** Passco News --- ### [Passco Acquires Day Creek Village in Rancho Cucamonga](https://www.passco.com/passco-acquires-day-creek-village-in-rancho-cucamonga/) **Published:** January 11, 2016 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC, has acquired Day Creek Village, a 100-percent leased neighborhood shopping center in Rancho Cucamonga, the second largest submarket in California’s Inland Empire market. “This property is a strong addition to our portfolio based on its excellent tenant mix and local demographics,” explains Bob Peterson, Vice President of retail acquisitions for Passco Companies. “We continue to seek stabilized retail assets in growing markets with the potential for strong performance over time.” Peterson notes that the Inland Empire boasts a population of 4.5 million residents, with the population immediately surrounding Day Creek Village projected to grow by more than five percent in the next five years. Further, Rancho Cucamonga’s median household income is 47 percent higher than the Inland Empire as a whole. In the one-mile radius of the center, the average household income is $111,000. These facts translate to strong consumer buying power that will drive value for the asset, according to Peterson. “This center has generated positive cash flow since it was built,” explains Peterson. “It is located in a growing market, and has commanded increasing asking rates over the last two years.” The 25,002 square-foot Day Creek Village shopping center is shadow-anchored by a Ralph’s grocery store, and currently has 14 tenants, including Starbucks, Wells Fargo, Super Cuts, Subway, and Orange Theory Fitness. Peterson notes, “This submarket has not delivered any new retail inventory since 2009, making Day Creek Village one of the newest centers in the area. Based on the asset’s strong tenants and limited competition in this growing Southern California market, we are confident in this acquisition.” Day Creek Village is located at 12223 – 12273 Highland Avenue in Rancho Cucamonga, California. The property is situated at the intersection of Day Creek Boulevard and Highland Avenue, in close proximity to the 210 Freeway, and is visible to a traffic count of 21,000 vehicles each day along Day Creek Boulevard. Passco Companies acquired the center for $15.8 million. HFF’s CJ Osbrink and Gleb Lvovich represented both Passco as the buyer and Day Creek Village, LLC as the seller in this off-market transaction. **Categories:** Passco News --- ### [Will Younger Demographic Make Rent Growth Implode?](https://www.passco.com/will-younger-demographic-make-rent-growth-implode/) **Published:** January 7, 2016 **Author:** Synoptek Web Dev **Content:** In preparation for the multifamily quarterly feature in Real Estate Forum magazine, we sat down with many multifamily experts from around the country. In the first part of this series, we talked about whether or not apartment vacancy will tick upward in 2016. In part two of the series, we reviewed whether or not the market could digest the new supply pipeline. In this part of the series, we talk about rent growth, demand, and whether or not we can expect it to implode in the coming years. **GlobeSt.com: Do you expect rent growth to continue? How about demand? Is it likely to implode in the coming years due to the number of 20- to 29- years olds, which still constitute the bulk of the prime rental cohort?** **Diana Pittro, EVP of Chicago-based RMK Management Corp.:** We continue to see year over year gains in rental prices in both the downtown market as well as the suburbs. As long as occupancy and absorption of new units continue along the same trajectory, we expect rents to hold steady or continue to rise. We don’t think it will implode. This younger demographic looks at homeownership differently than previous generations. And just as they are delaying marriage and family, they are likely to delay homeownership, too. **Bryan Sullivan, VP of acquisitions and investment at the Habitat Co.:** There is a fascinating yin and yang to income to rent ratios. The continued compression of this metric suggests you only have so much more room to run. While the urban demographic may forego certain traditional expenses, such as a car, that allow for a larger allocation toward rent, many of this same demographic are also saddled with more student debt coupled with only tepid wage growth. The evolution of the new apartment community addresses this market dynamic by offering smaller units, with corresponding smaller chunk prices, and larger communal areas in dense, walkable areas. **Gary Goodman, SVP of Acquisitions at Passco Cos.:** It is likely that demand from the Millennials will abate eventually as this cohort matures and begins to raise children. However, this group is marrying later, having children later and continues to hold a high preference for renting vs owning. Also, mitigating a potential downturn in demand is the retiring Baby Boom cohort. Many in this group are retiring, selling homes and are attracted to the freedom of renting. **Josh Dix, SVP in Trammell Crow Co.’s MidAtlantic Business Unit and National Practice:** As developers, we of course wish it to continue! But stepping back, rental growth has varied widely over the past 12 months nationally. As CBRE Research wrote, “demand for apartments remain robust, and though construction activity continues at a fever pitch, supply has not kept pace. As a result, the average apartment rent in major US markets is increasing at a pace far above the inflation rate, while the vacancy rate is at its lowest point in 15 years.” In summary, in the short-term, yes we expect rental growth to continue. While “shifting preferences towards urbanization, walkability, convenience, amenities, public transit, de-coupling, de-nesting, etc.” all sound cliché, they are real demand drivers that continue to feed the demand for multifamily. Additionally, from a more qualitative perspective, the continued creation of single households nationally, and those same single households staying single longer, will continue to boost the rental market in the coming years. One example is that the marriage rate was 70% in 1957 and is now at about 51% today. That fact equals more singles, which equals more single occupant households (or roommate households). In some major metros, single occupant households are approaching 50% of the residential market, calling for more multifamily demand. Another qualitative perspective is the relatively low inventory of available houses in many major metros combined with tighter credit standards among lenders, relatively stagnant/lower incomes against larger down payment requirements combine to equal renting longer. Ongoing expansion in US payrolls supports growing demand for apartments. According to the US Census Bureau, as of Q2 2015, the number of US renter-occupied households (including single-family home rentals) has increased by 2.2 million year over year, bringing the US total to nearly 43 million households. Y-O-Y, the 62 markets tracked by CBRE EA reported a 1.6 percent, or 208,200 units, increased multifamily demand. High Street Residential estimates a gradual reduction in absorption over the coming year, nevertheless remaining securely over the historical average with yearly absorption believed to be around 163,000 for the next two years. The trend toward rentership applies to all ages. While Gen Xers have provided to multifamily success in recent years, High Street Residential predicts Millennials and baby boomers will drive the market through the next 15 years. Largely, a Millennial is defined as an 18-to-34-year-old. This 16-year-gap leads many developers and investors to believe there will be many more years of expanding apartment demand. From mid-2014-to-mid-2015, the homeownership rate fell by 110 basis points for those under the age of 35, by 220 bps for those ages 35-44 and by 160 bps for those 65+. The top 15 metros for declining homeownership from 2010-2015 mentioned earlier are dispersed, substantiating a broad cultural shift with a preference toward renting. **Philip Martin, VP of market research at Chicago-based Waterton:** We expect annual apartment effective rental rate growth to remain comfortably above its long term average of 2.5%, supported by health supply and demand fundamentals. We expect apartment unit demand to exceed supply for the foreseeable future, but certainly not without some volatility along the way, possibly related to the pace of economic/job growth and/or incremental apartment unit supply growth. As mentioned above, household formation growth is beginning to improve and is forecast to exceed its long term average over the next several years. This is occurring against a backdrop of an “overall” shortage of housing supply. Furthermore, consider that three- to five-year forecasts are calling for estimated annual household formation growth of 1.5 million, which far exceeds that of the 1.2 million estimated annual “overall” housing deliveries. **Steve Patterson, president and CEO of Related Development, LLC (the multifamily division of the Related Group):** Rental rates are quite elastic in the apartment sector and react quickly to occupancy. We are currently still in the expansion phase of the cycle so we expect occupancy to be stable and rents to continue to rise until we reach the overbuilding phase. Affordability is an issue but this is relative, as housing expense will inevitably become a greater percentage of household income in the future as it does in all maturing non-socialized markets. We believe that there is significant pent-up demand for rental apartments. Many of these potential renters are still living with their parents. In fact, about one third of the prime renter cohort haven’t left the nest. Given that people are entering the rental market later due to later household formation and having children later after getting married and forming households suggests that the renter cohort will grow in age, prolonging the Millennial demand swell. *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/globest/2016/01/07/will-younger-demographic-make-rent-growth-implode/).* **Categories:** Passco News --- ### [Will Market Digest New MF Supply Pipeline?](https://www.passco.com/will-market-digest-new-mf-supply-pipeline/) **Published:** January 5, 2016 **Author:** Synoptek Web Dev **Content:** In preparation for the multifamily quarterly feature in Real Estate Forum magazine, we sat down with many multifamily experts from around the country. In the first part of this series, we talked about whether or not apartment vacancy will tick upward in 2016. In part two, we talk about multifamily construction and absorption. Will falling homeownership rate and increased desire for infill housing cause the historical new jobs versus apartment absorption ratio to fall? One source seems to this so in this exclusive Q&A below. **GlobeSt.com: As of now, it seems as though multifamily construction is slightly outpacing net absorption. What are your thoughts on that? Should we expect vacancy increased to accelerate? Will the market be able to digest the new supply in the pipeline?** **Steve Patterson, president and CEO of Related Development LLC (the multifamily division of The Related Group):** If you are driving out of the rear mirror, it may look like we are beginning to over build. Rising rents and occupancies however don’t support that based upon current deliveries. Permitting does appear to be slightly ahead of historical absorption paces as they correlate to job growth. We believe that the falling homeownership rate and increased desire for infill housing will cause the historical new jobs vs. apartment absorption ratio to fall, meaning that it will take less jobs going forward to absorb each unit than in the past. Vacancy increases should be minimal and limited to certain submarkets at current job growth and new supply rates. **Bryan Sullivan, VP of acquisitions and investment at the Habitat Co.:** Some of the new demographic trends undermine the traditional metrics we use to evaluate market performance. There are expanding segments of multiple demographics that are showing much higher propensities to rent. You couple this with years of non-existent new supply, tighter home buying credit limits, an improving economy with new home formation, and there is an obvious market imbalance tipping in the landlord’s favor. **Diana Pittro, executive vice president of Chicago-based RMK Management Corp.:** Again, in Chicago, we have a healthy absorption rate for new construction, due in part to a combination of strong job growth and historically low—and continually falling—homeownership rates. **Gary Goodman, SVP of Acquisitions at Passco Cos.:** Once again this is location specific. On a macro level, once we see meaningful job growth, demand for housing should increase with the increase in household formation. **Josh Dix, SVP in Trammell Crow Co.’s MidAtlantic Business Unit and National Practice:** As the market is fairly efficient in controlling supply as development capital becomes more, or less, difficult to obtain in response to actual, or perceived, supply/demand concerns. **Philip Martin, vice president of market research at Chicago-based Waterton:** Nationally, incremental apartment supply has not yet exceeded demand, in our opinion. Of course, there are always individual metros and submarkets which are experiencing something different. Washington D.C. and Houston come to mind. Where the apartment sector is experiencing, or may begin to experience, a greater level of vacancy pressure would be at the higher end of the rental rate spectrum, where relative value and/or affordability can be an issue. *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/globest/2016/01/05/will-market-digest-new-mf-supply-pipeline/).* **Categories:** Passco News --- ### [Will Apartment Vacancy Tick Upward In 2016?](https://www.passco.com/will-apartment-vacancy-tick-upward-in-2016/) **Published:** December 31, 2015 **Author:** Synoptek Web Dev **Content:** In preparation for the multifamily quarterly feature in Real Estate Forum magazine, we sat down with many multifamily experts from around the country. On particular topic on the agenda was apartment vacancy and whether or not it will tick upward. While it is happening in some markets, there are dozens where the opposite is true, said sources. See the below commentary for more on the subject. **GlobeSt.com: A recent report we read said apartment vacancy continues to tick upward. Is that something you are seeing and can we expect that going forward? Do you expect a faster upward pace in the coming months? Why or why not?** **Josh Dix, SVP in Trammell Crow Co.’s MidAtlantic Business Unit and National Practice:** As you know, demand ebbs and flows, but strong fundamentals continue in most markets suggesting continued interest in multifamily/absorption. Vacancy has ticked upward slightly in some markets. It is something we expected to see in the short term as additional competition came on line in certain markets. In those markets, we do expect the vacancy uptick to moderate as new supply is absorbed. **Gary Goodman, SVP of Acquisitions at Passco Cos.:** It’s important to understand how real estate performance is very specific to location. Yes, maybe on a macro level there is an uptick in vacancy rate, but there are dozens of submarkets where the opposite is true. We are finding that generally, suburban locations offer the best environments for barriers to entry. Many single family homeowners have rallied to keep apartment construction to a minimum and some communities, have placed moratoriums on new apartment development. **Steve Patterson is the President and CEO of Related Development, LLC (the multifamily division of The Related Group):** This is not the case in most markets. We are experiencing strong occupancies and absorption in our stabilized and new construction properties. All data suggests that we should expect this to continue for the next two years if new production remains at its current pace. There will be a few isolated submarket exceptions but we expect any downturn will be temporary. **Philip Martin, vice president of market research at Chicago-based Waterton:** Nationally, vacancy among institutional apartment communities remains 100-150 basis points below the long term average of 6%, and has been stable over the last 12 months. We expect vacancy to potentially tick up 50 basis points over the next 12 months, but not much more. Despite potential vacancy pressure related to anticipated incremental apartment supply growth, the sector is benefitting from historically low vacancy, and an “overall” shortage of housing against a backdrop of favorable demand fundamentals, including job growth and the associated normalization of household formation growth, especially among the 25-34 age-cohort (primary renter). **Diana Pittro, executive vice president of Chicago-based RMK Management Corp.:** In Chicago, we are actually experiencing the opposite. Occupancy rates are, on average per county, over 95% and rising. At the same time, rents are also on the rise. **Bryan Sullivan, VP of acquisitions and investment at the Habitat Co.:** Based upon the amount of units we have under management and the diversity of our properties(market rate, affordable, mixed income, high rise luxury, suburban garden), we are able to generate performance snapshots that can act as proxy for the greater market. At this point, we have not seen a meaningful change in vacancy. With the amount of supply coming on line, we are keeping a very close eye on occupancy and rents. *This article was originally published on [GlobeSt.com.](http://www.globest.com/sites/globest/2015/12/31/will-apartment-vacancy-tick-upward-in-2016/)* **Categories:** Passco News --- ### [Multifamily Capitalizes On Employment Growth](https://www.passco.com/multifamily-capitalizes-on-employment-growth/) **Published:** December 20, 2015 **Author:** Synoptek Web Dev **Content:** Downtown Scottsdale is experiencing unprecedented employment growth from healthcare, technology and financial services companies. Proximity to advanced education, abundant amenities and excellent demographics continue to attract top companies such as Yelp, Zenefits, Scottsdale Healthcare, Weebly, Groupon, CA Technologies, McKesson, Softwench Solutions, Yodle, Theranos and Webfilings. Multifamily continues to capitalize on that employee-driven growth. One such asset is Luxe Scottsdale, built with an urban design, condominium finishes and community amenities. The first of four developments in Arizona, it was recently developed by seller, Atlanta-based Wood Partners and acquired by Passco Companies. The units include 10-foot ceilings, fully appointed kitchens with granite countertops and tile backsplashes, stainless steel appliances, contemporary cabinetry and deep single-basin under-mount sinks. All homes have vinyl plank wood flooring, full-size washer/dryers and open patios or balconies. The property is a National Green Building Standard Bronze-certified community. Luxe Scottsdale will be managed by Allison-Shelton. Gary Goodman, senior vice president, acquisitions for Passco Companies, tells GlobeSt.com: “Luxe Scottsdale’s attractive rent structure creates broad-based demand. The community offers residents upscale finishes and a Downtown Scottsdale lifestyle at an attractive price point relative to competing multi-family communities. The resulting rent spread provides a compelling opportunity for substantial rent growth once the community achieves stabilized occupancy.” Luxe Scottsdale is located 8444 E. Indian School Rd. Built in 2015, the property features a pool area with spa, two-story clubhouse with walk-out deck overlooking the pool, 24-hour fitness center featuring touch-screen equipment, cyber café bar area for events and cooking demonstrations, and a commercial-grade dog washing station. “This property is an example of Wood Partners’ thoughtful and integrated business model, through which we are consistently able to produce unique and beautiful assets,” said Todd Taylor, Arizona and Nevada development director for Wood Partners, which also developed 3rd and Thomas, Alta Tempe and Alta Steelyard Lofts. “Combining style, luxury and convenience, the Luxe Scottsdale community, which was formerly called Alta Scottsdale, delivers gorgeous, modern units and amenities that clearly match the desires of our target market.” Tyler Anderson, Sean Cunningham, Asher Gunter and Matt Pesch of CBRE‘s Phoenix office represented Wood Partners in the transaction. “Multi-family fundamentals remain strong as we close out the year, and we expect more of the same heading into 2016,” said Cunningham. “Numerous third-party forecasts have pegged Phoenix as a leader among major western markets in job growth and population growth through 2018. The community’s strategic location on Indian School Road, which serves as the gateway to Downtown Scottsdale, positions Luxe Scottsdale to benefit from demand drivers generated through significant employment announcements in that submarket.” Goodman notes that Luxe Scottsdale’s close proximity to multiple employment centers are attractive components for continued renter demand for the property. “Luxe Scottsdale’s location in the coveted Downtown Scottsdale submarket provides a long-term competitive advantage, high barriers to entry for future multi-family product, and immediate access to Downtown Scottsdale’s upscale retail, vibrant restaurants, nightlife and an expanding hub of dynamic employment. This new community, which is still in its initial lease-up, has rents which are lower than its competition, making this an extremely smart acquisition for Passco Companies. The vibrant downtown continues to attract new eateries and shops that Millennials want to incorporate into their live/work/play environment. Tech and healthcare companies seeking these young, educated employees to fill the available office space to the point that another 1.5 million square feet of office product is now actively in development.” *This article was originally published on [GlobeSt.com](http://www.globest.com/sites/globest/2015/12/20/multifamily-capitalizes-on-employment-growth/).* **Categories:** Passco News --- ### [Abundant Austin Multifamily Construction Doesn't Spook Investors](https://www.passco.com/abundant-austin-multifamily-construction-doesnt-spook-investors/) **Published:** November 5, 2015 **Author:** Synoptek Web Dev **Content:** The Austin area’s multifamily allure is attracting national attention and numerous investors, but could the high volume of new construction scare some away? It’s a concern for California-based Passco Cos, but not too alarming; the company recently closed on the 1-year-old completed 304-unit Lone Oak Apartments in Round Rock. Passco SVP of realty investments Ogal Claspell tells us the abundance of multifamily construction hasn’t scared the company off, but it’s something to watch. The new product coming on line will put a damper on rent growth, but not significantly, he says. Passco still wants to be in the Austin area and is watching for deals like Lone Oak. The strategy tends to focus on the suburbs, Ogal tells us. He says he’s looking in the suburbs for well-located properties that are reasonable distance to the employment centers and I-35. Lone Oak is about 23 miles from Downtown Austin. (KeyBank Real Estate Capital’s Chris Black arranged financing through Fannie Mae for the property’s acquisition.) Austin is more California-like than any other city in Texas, Ogal says, especially in pricing. The strong economy is the driving factor for the high prices, but it’s also the reason buyers like Passco want to be there. If you look at both the employment and population growth forecasts for the metro area, they exceed the national equivalent by a wide margin, he tells us. The demand for apartments is going to be very strong and in the case of Austin, in particular, the quality of the jobs and the stability of the jobs will be very strong, Ogal says. He tells us Passco should close on about $300M in multifamily acquisitions by year-end, including the Lone Oak. Passco leadership wants to double that in 2016. In anticipation, staff is being added now. It’s a reflection of Passco’s take on the multifamily sector, he tells us. Ogal says he doesn’t see a downside over the near term with Millennials dominating national demographics. Passco will be looking to invest across Texas, in the Southeast and a few other select markets. The company is currently involved with 60 properties in 18 states. *This article was originally published on [Bisnow.com](https://www.bisnow.com/austin-san-antonio/news/multifamily/headline-coming-51991?rt=title).* **Categories:** Passco News --- ### [A View of the Future](https://www.passco.com/a-view-of-the-future/) **Published:** November 2, 2015 **Author:** Synoptek Web Dev **Content:** Many often wish they had a glimpse into the future in order to better prepare for the roads ahead, but those in the multifamily business don’t need a crystal ball to know that innovations in technology are the wave of the future. “Technology is the most rapidly advancing portion of our business right now, and what I think you’re going to see is further refinement and usage of mobile apps,” Jeff Olshan, vice president, asset management for Passco Companies, Irvine, Calif., said. “I think we really just have scratched the surface.” When Mark Fogelman, president & CEO of Fogelman Management Group, Memphis, Tenn., imagines what will take place in the years ahead, he sees an industry where everything has gone mobile. “It should be the standard, not the exception for our residents to work through our process end-to-end on mobile,” he said. “Our clients will need to invest in Internet-connected technologies in new developments and retrofitting older communities. Whether it’s alarms, lighting, thermostats, paying rent, signing a lease, or other \[tasks\], our end users want to be in control from mobile and we need to provide.” At the corporate level, he sees a bigger move from desktops to laptops and tablets, and service teams most likely equipped with smart phones as offices go paperless. **Going virtual** From a corporate operations standpoint, business intelligence has been at the forefront of multifamily technology for a few years now, but the industry as a whole has only just begun in terms of predictive analysis for renter trends. One of the hottest trends in the next decade might be in virtual reality technology. This is already starting to be used by residential brokers, offering potential residents an enticing view of a property or home. Multifamily developers and brokers are using the technology to offer a glimpse of the future to potential tenants while creating an immersive, interactive experience at the same time. Many believe this technology will have a big impact on the marketing of multifamily properties in the next few years. Scott Pechersky, vice president of technology for Alliance Residential Company, Phoenix, Ariz., said that as consumers become more tech-savvy, he foresees a shift in operations, in which prospects will be able to complete the search and leasing process with little human involvement. “We currently have the ability to offer online options for applications/leasing and rent payment, but will see more communities using technology for other aspects of the leasing process, such as touring prospects via an app on their smart phone,” he said. “I could even see the full leasing process being completed by delivering keys electronically to units with NFC \[near field communication\] locks.” **What to expect** Looking a decade or so down the line, most in the industry foresee that everything will need to focus on a self-service model, beginning with the touring process and leading to a resident lifecycle process that can be completed entirely through the property website or an app, including move-ins, delivery of NFC keys, renewals, and move-outs. “I also believe the gamification of every step of the leasing process will become more prevalent,” Pechersky said. “The next generation of renters and associates are used to immediate feedback upon completing tasks and want to share their progress along the way in a social environment. We have started exploring this within our industry, and the stage is set for an environment where communities are compared in more ways than simple ratings and reviews.” Olshan believes there will be more refinement of revenue management systems in the future, which will allow far greater sophistication in pricing. “One of our biggest issues is the ability to compile and access data. Right now, most of the systems are only as good as the information they have in their databases,” he said. “We will see significant improvement in that aspect of the business.” **Gaps in technology** A big future goal of many is to help fill the technology needs that are missing or have vulnerabilities. For instance, many desire-better technology for security. “Security is always at the forefront of our thoughts,” Pechersky said. “Alliance has made concerted efforts to be proactive in this area—such as moving personal identifying information to cloud providers that specialize in securing this type of data—but, with all of the breaches that have occurred within the last few years across many industries, we know nothing is foolproof.” Pechersky also noted that just recently, the industry has done a much better job of adding prospect CRMs to help better manage leads and sell communities, but there is a gap in terms of using this same technology on a national level to manage residents. “Our goal is always to make the experience of living at an Alliance community meaningful for our residents, and using technology to help cultivate these relationships will be extremely beneficial,” he said. “Providing our staff with extremely intuitive software that integrates seamlessly with existing programs and applications is hands-down the most important piece to the puzzle.” Pechersky explained that the company can provide its teams in the field with the latest in tablet technology or desktop software but, if the tools don’t work hand-in-hand with its other systems, it’ll never realize full adoption because they will perceive it as an extra step. Fogelman believes currently there is a gap between the way people treat customers and the way they expect to be treated as consumers. “We want to be mobile, pay bills with credit cards and no fees, interact via e-mail or app, but those same items are still an exception in our industry versus the standard,” he said. “We need to embrace changing technologies and change our business practices to match. We need to be hiring and training associates on the ‘new’ way of selling and interacting via device and data vs. hard sale.” **The final say** Competition breeds innovation. Currently, a single-stack model seems to be the trend for property management software providers. Pechersky would like the industry as a whole to demand the continued development of open APIs from providers in an effort to eliminate barriers for additional development in the multifamily business. According to Fogelman, 60 percent of all leads come through the mobile space today and he predicts this will be even higher as the years go on. “With the advancement of mobile technology, it is important to create sustainable mobile platforms for all aspects of our business,” he said. “As the millennial generation progresses forward, the user experience on these mobile platforms will be a crucial component to the success of our operations.” Olshan feels there will be something no one in the industry has even envisioned yet that will come online in the next 25 years and will impact the way properties are run. “My perspective is that you should embrace every new technology,” he said. “You might not utilize it all, but if you don’t experiment and try, you won’t know what will make the most lasting impression.” *This article was originally published in [Multi-Housing News](http://www.mydigitalpublication.com/publication/?i=279040&ver=html5&p=24).* **Categories:** Passco News --- ### [Fed Causes Uncertainty With Rate Decision](https://www.passco.com/fed-causes-uncertainty-with-rate-decision/) **Published:** September 23, 2015 **Author:** Synoptek Web Dev **Content:** The industry is split about the Fed’s recent decision to keep interest rates at historic lows, and while Alan Clifton, Passco Cos. SVP of investments and operations, didn’t take any sides, he said that the decision could cause some uncertainty about the economy among the general public. At the recent ICSC Western Division conference in San Diego, Clifton sat down with us for an exclusive interview to talk about the market and the company. In addition to commenting on the Fed decision, Clifton talks about what product types are catching lender attention, how capital market trends have changed over the last year and what is on the horizon for the company. *This video interview was originally published on [GlobeSt.com](https://www.passco.com/news/67/fed-causes-uncertainty-with-rate-decision).* **Categories:** Passco News --- ### [Renovation Yields Best Profits in Retail](https://www.passco.com/renovation-yields-best-profits-in-retail/) **Published:** September 18, 2015 **Author:** Synoptek Web Dev **Content:** Given a choice of retail acquisition/disposition, holding/managing properties or developing ground-up properties, the best money is made in the process of acquiring, renovating and selling, said panelists at ICSC’s Western Division Conference here yesterday. Speakers in the general session “How to Make Money in Retail Real Estate … and Keep it!” said value creation comes from repositioning an obsolete or aging shopping center and turning it into something fresh and exciting for customers. Moderator Michael Kercheval, president and CEO of ICSC—who is retiring today and being replaced by Tom McGee, currently vice chairman of Deloitte LLP—asked panelists over the next five years, which stage of investment generally offers the greatest potential for value creation, and most said that acquisition is the best place to make money. Bill Passo, CEO and founder of Passco Cos., said he recommends **buying low and selling high** by having staying power and a smart business plan, and he also recommends using other people’s money, such as banks and JVs, in order to achieve goals. Steve Bram, principal/senior director and co-founder of George Smith Partners Inc., says his firm sits “in the shoes of the sponsor. How are they going to make the most money out of the deal? Holding and managing a property holds less risk, but also the least return; developing is the second most-profitable strategy, but your issues are that land will likely not be infill, which is more risky. Plus, do we need to build a lot more retail centers? Probably not. Acquisition, renovation and disposition of an asset is the most profitable route, and there’s a whole array of financingoptions available for these deals.” Bram also suggested not preleasing retail space under construction before a property is ready to be occupied because then tenants will know you’re dependent on them to get the loan and will use that as a leverage point to reduce rent. Smart & Final Stores’ VP real estate Pat Barber said, “There’s way more opportunity on acquisition of existing assets than on development.” His firm currently has 260 stores throughout the country. Kercheval also asked the panelists the best way to invest $10 million in retail real estate today. Most said urban and mixed-use properties were the smartest way to go. Larry Kosmont, president, CEO and founder of Kosmont Cos., recommended looking for urban properties near transit, which changes density and adds creative value for the investor. “Follow public policy. See where the investment is going into infrastructure and follow that investment.” Arthur Pearlman, founder and chairman of Arthur Pearlman Corp., said he won’t invest in suburban centers. “For every 5,000 homes in a 1.5-mile radius, you can build one shopping centerand generate jobs and income. I’m cautious about suburban development, but would invest in urban and mixed use.” Chris Wilson, EVP of JLL, retail, and retail brokerage lead for the Southwest market, said he would sit on the cash. “I’m looking at the cycle, and there are always troughs and peaks. I believe we have two years left in this cycle.” Kercheval asked the panelists when the peak of the cycle will hit in retail real estate, and most said either 2017 or 2018—predictions ranged from six months to three years until the end of growth in this cycle. Wilson said, “Yields are as low as they’ve ever been. Nobody knows when the cycle will end—it’s a parlor game.” *This article was originally published on [GlobeSt.com](http://www.globest.com/news/12_1199/sandiego/retail/Renovation-Yields-Best-Profits-in-Retail-361759-1.html).* **Categories:** Passco News --- ### [California centers are freshening up, conference attendees say](https://www.passco.com/california-centers-are-freshening-up-conference-attendees-say/) **Published:** September 17, 2015 **Author:** Synoptek Web Dev **Content:** Homegrown and independent tenants — the types landlords might well have overlooked roughly a decade ago — have come into high demand in California as shopping centers re-create themselves to give fickle consumers something fresh and surprising. “With all the changing demographics and population segments in California, we’re seeing a lot of new and different retailers,” said session leader Alan Clifton at this week’s Western Conference & Deal Making in San Diego. “But they aren’t replacing traditional retail; they’re creating something new and exciting with a community feel and an Internet connection.” Clifton is ICSC’s Western Division operations chairman and a senior vice president of investments and operations at Irvine, Calif.–based Passco Cos. The Greater Los Angeles market is a good example, Clifton said. The newly renovated Anaheim Packing District sports a roster of locally grown and independents tenants — with such names as Bar and Vitaly, BXCR: The Underground Wine Society, Cafecito Organica, Crepe Co-Op and Hammer Workshop. The district’s Anaheim Packing House, a new food hall and marketplace, opened last year in a 42,000-square-foot, century-old former Sunkist packing plant. The complex, at Anaheim Boulevard and Santa Ana Street, features an outdoor events center with a fireplace and an orange grove. Numerous ethnic residential and shopping enclaves have sprung up in the past 10 to 15 years throughout the state. “There are new Hispanic districts, Asian districts, Middle Eastern Districts and others — they all present opportunities for local people who get to know these markets,” said Clifton, speaking at the session titled “Now that Retail is Back in the Black, How Do We Get the Green?” and held Wednesday. “If you look at the authenticity of these projects, it makes it very important for owners and developers to pay attention to the trend,” Clifton said. “They just can’t come in and plug in any old format. Even the basics, such as the \[requisite\] service tenants, may not work.” That makes field research more important than ever. “Talk with the checkout person, pop into convenience stores, go to city hall — find out what is working and what is needed and get to know the neighborhood.” The Los Angeles Basin retail market, which includes Los Angeles and Orange counties and the Inland Empire, recorded a net absorption of 943,300 square feet of retail space last year, according to Colliers International. Both Orange County and Los Angeles County show just 4.7 percent retail vacancy, while the long-struggling Inland Empire improved to 9.5 percent over the high double digits, postrecession. The Bay Area is thriving too, with some 774,000 square feet of shopping center projects in the pipeline and about 1 million square feet more planned, according to DTZ. There is room for national tenant growth in the Golden State. Among the new projects is the $450 million Village At Westfield Topanga, in Woodland Hills, a cog in the reshaping of the western San Fernando Valley’s retail landscape, which is set to open this Friday, Sept. 18. Among the 88 inaugural tenants at the 550,000-square-foot open-air center are Burke Williams, Costco, REI, 24-Hour Fitness, and a studio and performance-event center for public-radio station KCSN 88.5, plus the Il Fornaio Cucina Italiana restaurant and 28 other eateries, many of them local. In Orange County, work on the mixed-use Source lifestyle center, in Buena Park, at the high-traffic intersection of Beach Boulevard and Orangethorpe Avenue, is under way. Lynnwood, Calif.–based M&D Properties is developing the property, which will contain 400,000 square feet of retail, 57,000 square feet of offices, 150 hotel rooms and 300 living units. Meanwhile, foreign capital continues to pour into the state. “Those investors don’t have a problem buying in at a 4.5 percent to 5.5 percent cap rate,” Clifton said. “They just need to get the money out of their countries — they can get four times the return here that they’re getting at home.” *This article was originally published on [Shopping Centers Today.](http://www.icsc.org/sct/newswire/california-centers-are-freshening-up-conference-attendees-say)* **Categories:** Passco News --- ### [Developing Trends](https://www.passco.com/developing-trends/) **Published:** September 8, 2015 **Author:** Synoptek Web Dev **Content:** When it comes to retail development in the West Coast, while there may not be a lot of new development, there is a lot of activity. “The biggest trend we see is the lack of new development, which has really adjusted the supply side of available new product,” says Patrick S. Donahue, chairman and CEO of Costa Mesa, California-based Donahue Schriber. “The industry has been delivering about 150 million square feet nationally a year for the past thirty-something years. It is now delivering about 25 million square feet a year since the recession.” Donahue attributes this to the post-recession pullback by major grocery stores and big box retailers. “The major retailers that drove much of the demand have pulled back,” he continues. “Just look at the new store openings of the Targets and the major grocery chains. They are at a fraction of what they were before the meltdown. New housing drove much of their growth, and that is also well below historic deliveries. So the supply and demand equation is out of whack by historical standards.” Though new development may have slowed in California, this is not a case of “no news is good news.” It actually spells very good news for savvy landlords who maintain well-positioned centers, as tenants now have fewer spaces to choose from. “This trend has caused a continued decline of vacancies, combined with increasing market rents, which are due to improving economic conditions and a lack of new construction,” says Kyle Matthews, CEO and chairman of Los Angeles-based Matthews Retail Group. “As a landlord, it really puts you in a position of leverage if and when you have a vacancy come available. It allows the landlord to push rents and dictate lease terms.” **Landlords’ Market** With more demand than supply, WREB’s experts confidently declared that most of California’s retail land- scape favors the landlord. These landlords, in turn, are looking to fill any existing vacancies with the highest quality tenants, according to Rick Rivera, president and CEO of Centers Business Management’s (CBM) West Los Angeles office. “Landlords are pleading for credit tenants,” he says. “They want to fill their vacancies with A-plus credit ten- ants on long-term, triple-net, corporate-guaranteed leases.” Rivera believes it’s post-recession jitters and a conscious effort to not repeat the past that has led many landlords to seek out only the best of the best, now that the tables have turned and many have that option. “After riding out the Great Recession and the shambles it made of the SoCal commercial real estate market, landlords and investors want security and peace of mind,” he says. “Long-term, triple-net leases with corporate guarantees offer stability. Landlords are confident these businesses — large, established companies — are highly unlikely to go out of business or close a location for mediocre performance. And even if they do, guaranteed leases provide peace of mind that landlords will still get their money.” The demand for top-notch space is so fevered, even with the pullback from some traditional retailers, that space in the few newly developed centers is oftentimes taken offline before the project even debuts. Matthews points to Federal Realty’s The Point, a 115,000-square-foot shopping, dining and entertainment center in El Segundo, California, as one. “The Point is the increasingly rare new construction retail project that leased up immediately and achieved astronomical rents due to an improving retail market, combined with almost no available inventory,” he says. Fueled by consumer demand, Westfield is opened The Village at Westfield Topanga at the end of September. Anchored by Costco, REI, Crate & Barrel, 24 Hour Fitness and Burke Williams Spa, the Village will also be home to more than 15 eateries of all sizes and a number of regional lifestyle tenants. When it opens this month, The Village, when combined with world- class Westfield Topanga and adjacent Promenade, will be home to over 300 tenants. Also fueled by demand is DJM Capital Partners’ Pacific City in Huntington Beach that is opening this month. The mixed-use project, located along Pacific Coast Highway, features 191,000 square feet of retail space. Retailers embrace the area’s coastal lifestyle, and a unique local market, Lot 579, highlights the center’s food retail offerings. **Everything is for Sale — for the Right Price** A landlord’s market naturally translates into a seller’s market — at least some of the time, according to the experts — if money is no object. “On the investment-sales side, because market conditions are so favorable, most landlords are unwilling to sell,” Matthews continues. “In the event they do sell, the prices are astronomical, so most of the historical buyers of these properties are unwilling to conform to the new market pricing.” Jereme Snyder, executive vice president of Colliers International in Irvine, California, says cap rate compression is also affecting retail’s investment sales. “New supply is not keeping up with increasing demand due, in part, by capital searching for yield,” he says. “Small strip centers, for example, are experiencing cap compression because buyers will now accept more risk for higher relative yields. It’s interesting to note that the cap rates of these smaller shopping properties are now often equal to what investment grade, single-tenant assets were selling for just a couple years ago. It is a great time to sell — the trending question at the moment is ‘where do I replace my 1031 proceeds?’” Snyder notes the recent listing of a brand-new space near Fresno where CVS holds a ground lease as an example of this compression. Colliers listed the space at a 4 percent cap rate, but is receiving offers between a 4 percent and 4.25 percent cap rate, “which is extraordinary, given that there are zero fixed rental increases in the 25-year primary term,” he says. These conditions don’t necessarily spell a bonanza for every single-tenant asset holder in California, however. There still has to be someone willing to pay that premium price and appreciate the value of those credit tenants. Even then, Snyder points out some owners may be overly ambitious when it comes to price because they’re aware it’s a seller’s market. “The primary challenge to investors today is capturing assets in line with their intrinsic value,” he says. “For those looking to invest in single-tenant assets, an understanding of the fundamentals is critical to making a prudent decision. It cannot be simply based on credit. As the market has grown and become more competitive over the past five years, investors need to understand how properties will be able to withstand forthcoming economic cycles. There are still plenty of these types of properties out there. It simply takes more effort to identify them today versus a couple years ago.” **Paying The Price** Retail investors aren’t the only ones price-conscious nowadays. Many of the state’s consumers are also watching their bottom lines, in search of the next good deal. “Today’s retail trends all boil down to the buying power of price-savvy consumers,” says Jack Nourafshan, CEO and president of Reliable Properties in Los Angeles. “Too high of a price point for quality products does not work anymore.” Nourafshan notes that grocers, discounters and big box stores are rolling out smaller footprints as they attempt to keep their prices low and their quality high to accommodate consumer demand. These smaller footprints often mean lower rents. “Big box retailers are downsizing to get better deal terms or serving as anchors in neighbor hood centers without edging out mom- and-pop operators,” he continues. “The challenge for landlords is to convince retailers to think outside the box and go to locations they have not traditionally ventured into.” Reliable has worked with Walmart to secure Southern California locations for its smaller Neighborhood Market stores. The company has also worked with Smart & Final on its expanded Smart & Final Extra! store, which recently opened at one of Reliable’s centers in Ontario, California. Rivera has also seen a lot of movement on the dollar storefront. CBM has worked with Dynamic Development Group on its development of 21 Dollar General stores throughout Southern California. The company has opened stores throughout San Bernardino, Lompoc, Victorville, Yucca Valley, 29 Palms and Hemet, with several more in development. “Dollar General has only recently begun expanding in California,” Rivera says. “That market was previously ignored because of the high development costs. But the chain’s continued expansion and investment in distribution centers is evidence they are firmly rooted in the California market.” Rivera also notes these properties have traded at cap rates in the high 5 percent to 6 percent range. Ethnic grocers are also thriving in California’s retail corridors, Nourafshan notes. “There is also a drift toward ethnocentric grocery markets that targets specific ethnicities,” he says. “But as the economy becomes more global, consumers are more exposed to varied ethnic products, allowing these stores to become destination stores, driving more consumer traffic to neighborhood centers. They cater to very robust Hispanic demographics and beyond.” Nourafshan says Reliable has recently signed deals with Hispanic supermarkets in Arleta, West Covina and Ontario. **Expanding The Palate** Consumers are not only becoming more adventurous in the kitchen. It’s expanded to their choice in restaurants and dishes as well. One needs to only look as far as the newest, hip retail center to see these creative concepts in action. ![](https://www.passco.com/uploads/ckupload/images/HOWARD%20WONG-18TU.jpg)“Dining has become a major component of every retail center, bringing the vibrant energy and life to centers that today’s consumers crave,” says Howard Wong, director of retail leasing for Passco Companies in Irvine, California. “The result is a more dynamic shopping experience, as we’ve reinvented the mall by incorporating a lifestyle experience throughout the entire property. To do this, we added outdoor elements and we are currently in leasing negotiations with many major sit-down and quick-service restaurants.” Wong points to Passco’s Hanford Mall as one example of a center that has leveraged dining and incorporated it into a retail center. The center includes familiar faces like Applebee’s and Chili’s Bar and Grill, along with local favorite Arsenio’s Mexican Food and quick-serve options like A&W, Dairy Queen and Subway. Wong also notes elevated restaurant concepts can increase rent at many of the state’s hottest centers. He believes Los Angeles and Orange County are two markets where this is occurring. “The Los Angeles and Orange County markets are certainly on the forefront of the current foodie trend, and we’re seeing demand for new foods and concepts translate into an explosion of new restaurants each year, creating a plethora of new businesses,” he says. “We’re seeing restaurant and food retailers increasing the occupancy in shopping centers from 10 to 20 percent — up to 30 percent to 40 percent in many cases.” Though food tenants can spell big bucks for landlords, Wong cautions that the “hip” factor surrounding some of these tenants may lead to higher turnover down the road. A typical restaurant tenant remains at a center for about 10 years, according to Wong, while many of today’s specialty niche restaurants may only hang around for three to five years. “Clearly, this adds increased risk for retail owners,” he says. “Especially based on the higher rents charged for restaurant spaces, which translates to a greater loss when these spaces are vacated.” With risk comes reward, however, as Carter Crouch, director of acquisitions for Dynamic Development Group in Santa Monica, California, can attest. The firm has recently welcomed a couple new faces into its shopping centers that may turn out to be risky plays, though Dynamic believes they will pay of over time. “Younger retailers who made it through the last recession have emerged healthy and lean and many of them have decided to take advantage of cheap capital and self-develop,” he says. “Dynamic’s concern is that these newly formed real estate departments are very young with the possibility of taking on too much development risk. With that understanding, we have positioned ourselves with retailers who we believe in, and who have desire, to own. Creating partnerships with these retailers is critical to their desire to own while growing their business, but reducing their intrinsic development risk.” These younger retailer development departments also face challenges when it comes to short-term growth. Crouch, however, emphasizes that big rewards can be reaped if both the landlord and tenant can make it through the some of the early humps. Barclay Harty, vice president of CBRE in Newport Beach, California, is seeing an increase in niche retailers throughout his region as well. “Instead of your traditional chain or well-known merchants, north Orange County is experiencing the expansion of independent and specialty retailers and restaurants,” he says. “These new build-outs and operations are hip, unique, creative and thoughtful. There is pent-up demand from consumers wanting something unique and different for their neighborhood shopping experience.” Harty says the trend is particularly poignant in the salon industry, where Floyd’s Barbershop, 18/8, 20 Lounge and Marilyn Monroe are “aggressively expanding,” and in the pet care industry, where Krisers and Protein for Pets have taken of. Like Wong, Harty has also seen a variety of new food concepts penetrating his market. They include Mendocino Farms, Lemonade, Urban Plates and Jacks Urban Eats. Though the demand for new retailers may be a general trend, Harty is quick to note it can pose some challenges that will need to be overcome before every landlord can welcome a newcomer with open arms. “The challenge with this trend is it is limited by few restraints,” he says. “This trend is usually found in higher demographic markets with disposable income and consumers who have an educated palate for their shopping needs. Another challenge is the tenant pool for these unique retailers is rather shallow, meaning there is not a deep list of these unique retailers.” **Mixing It Up** Some of the state’s savviest retail players are mitigating their risks by jumping in on the mixed-use trend. While California is not experiencing a ton of ground-up retail development, the mixed-use product type that combines either multifamily or office (or both) with retail is doing quite well, according to our sources. Metro at Main, a mixed-use project in Corona, is one such project getting of the ground. It will include 868 luxury apartment units, in addition to 60,000 square feet of ground-floor retail. “It has been a long time since we have seen any significant new retail development,” says Brad Umansky, president of Progressive Real Estate Partners in Rancho Cucamonga, California, which is serving as the project’s retail leasing team. “Residential construction is occurring in select markets, high quality space is very much in demand, and the economy has improved significantly in the past 24 months.” Brad Deck, senior vice president of retail acquisitions and development at Shea Properties in Aliso Viejo, California, is also seeing this development trend — and for good reason, he believes. “From the financial side, we are focusing our efforts on mixed-use properties — retail with for-sale housing or retail with apartments — in order to make the deal work,” he says. “Our multifamily division and relationship with our sister company, Shea Homes, allows us to do either depending on need and logic.” Shea broke ground on Alhambra Place, a mixed-use development just eight miles outside of Downtown Los Angeles, this past November. The infill project will include 140,000 square feet of retail and 260 luxury apartments. Though any kind of ground-up construction can be expensive in California, Umansky notes opportunities do exist for those who know how to capitalize on the latest development and retail trends. “Rents for new construction are absolute top dollar,” he says. “They need to be able to make a project pencil. There is a limit to the number of retail space users that can afford these rents. There are definitely some winners and losers in this process as in certain cases, new construction expands a market, but in other cases new construction comes as the expense of existing retail space. Owners of the existing retail space that are well financed, skilled and creative can turn lemons into lemonade.” *This article was originally published in Western Real Estate Business.* **Categories:** Passco News --- ### [When Property Management Enhances Value](https://www.passco.com/when-property-management-enhances-value/) **Published:** September 1, 2015 **Author:** Synoptek Web Dev **Content:** Asset management is the key to finding the right property manager, according to Todd Siegel, VP of retail at Passco Co.—a firm that uniquely packages the two together so that owners can get the most out of their investment. Asset managers look at the full lifespan of the investment, while property managers handle the day-to-day operations. They are two sides of the same coin, if you are looking to get the best performance out of an investment. To find out more about this dichotomy, as well as what is happening in the management space, we sat down with Siegel for an exclusive interview. Here is what he tells us: **GlobeSt.com: What is the difference between asset management and property management?** **Todd Siegel:** Property managers handle the day-to-day operations of the property, such as collecting the rent, managing contractual agreements and making sure the property is “open” for business each day. Asset management however, really takes the property through the full lifecycle of the investment, from acquisition to disposition and everything in between, determining the overall plan for an investment and dictating the property management strategy. We always say that managers really do have all of the responsibilities of an owner, without actually owning the property. **GlobeSt.com: Tell me about your property management services and how they are unique.** **Siegel:** A lot of companies offer property management and a lot of companies offer asset management, but not all companies offer both in one package. Passco offers both. We are always looking at the day-to-day operations of the property as well as the long term goals for the owner. We marry the two and take a broader view of how to get there. We view the landlord-tenant relationship as a symbiotic relationship, and realize that a successful tenant makes for a successful owner. We manage all retail property types, from single tenant to regional malls, and everything in between including entertainment centers, grocery-anchored centers and traditional strip centers. Working with so many properties, as well as so many tenants with often complex issues, means that we understand what it takes to make a property perform, and the work required to achieve and maintain the maximum performance out of a property. **GlobeSt.com: Property management is one of the seldom discussed areas of commercial real estate. What are some of the major trends you are currently seeing in this area?** **Siegel:** There has been a fundamental shift from goods and services to restaurants. Centers are becoming more food oriented, and that is where we have seen a big increase in rental rates. We also have seen an increase in operating costs due to the increased customer traffic and use changes. The soft goods have gone away in centers because you can get those products on the internet. This is challenging because while some centers can make that change, others simply cannot. **GlobeSt.com: What are some of the major challenges that you face as property managers?** **Siegel:** When it comes to property management today, one of the greatest challenges we face is identifying the right tenant mix for a center. This not only means appealing to the much-talked-about millennials with an increase in trendy food eateries and entertainment, but this also means catering to specific market demographics. It is paramount to recognize and respond to the growing desire for ethnic retailers, such as specialty grocers, which really speak to the needs of the surrounding populations’ demographic. Today’s retail centers must have the right mix of national credit tenants, up and coming food retailers, along with demographic-specific retailers in order to be successful. **GlobeSt.com: What advice do you have to property owners looking for a property manager?** **Siegel:** Owners need to fully understand the value a manager can bring to the table. It’s paramount that a property manager is candid enough that they can provide owners with a realistic expectation of what they can do with a property. By finding a manager that you can communicate with, and who fully understands your short and long term goals as an owner, you will be able to unlock the most value out of a property. *This article was originally published on [GlobeSt.com](http://www.globest.com/news/12_1187/losangeles/retail/When-Property-Management-Enhances-Value-361292-1.html?ET=globest:e47447:849687a:&st=email&s=&cmp=gst:Retail_20150902:editorial).* **Categories:** Passco News --- ### [Balancing Appealing Design with Cost](https://www.passco.com/balancing-appealing-design-with-cost/) **Published:** August 19, 2015 **Author:** Synoptek Web Dev **Content:** “Balancing a complex and appealing building design with the cost to construct it, while maintaining the established budget, is like choreographing an elegant dance set to music that is finite in length, while still conveying the tale that’s being told.” That is according to Jocelyn Topolski, director of business development at Bernards. “While it’s not easy to do, it certainly can be done well with the right trained craftsman leading the effort.” While talking to sources about multifamily design and demand drivers in celebration of GlobeSt.com’s 15th anniversary, sources agree that the product type has evolved drastically in terms of perception, demand and profitability. Gary Goodman, SVP of acquisitions at Passco Cos. LLC, tells GlobeSt.com that “Throughout history, multifamily living did not traditionally compete with single family homes. Apartments were perceived as the first step for young adults, with the ultimate goal of buying a single family home of their own down the road.” Today, however, he notes that apartment living is the norm for many Americans, from Millennials to Baby Boomers, and in many cases renting is a choice as opposed to a necessity. “Millennials have been the true driver behind this shift. Watching many of their parents lose their homes during the recession, many in this generation have simply lost interest in the risk of homeownership,” he says. “Further, the recession left many Millennials under-employed. As this generation continues to seek their ‘big break’ in the professional world, the flexibility of multifamily living, which allows for easy moves when needed, is very appealing. Finally, the amount of student debt that most young professionals have amassed continues to make purchasing a single family home out of reach for many.” As a result of these changes, Goodman notes, “multifamily today has stepped up and evolved, and now truly competes with single family homes on every level.” In addition to offering the flexibility and freedom that today’s generation craves, he says, apartments today have also drastically updated in terms of quality. “Amenities such as granite or quartz countertops, stainless steel appliances and hard wood floors have become the norm, as well as a plethora of luxury services (fitness centers, valet trash pickup, game rooms, concierge services, resort style pools and coffee bars) that allow renters to truly establish a sense of community within their rental homes.” In addition, he adds, the investment perception of multifamily product has also changed. “Today, this property type is viewed as the “golden child” of commercial real estate investing, based primarily on the fact that it not only held up during the recession, but demonstrated soaring values and rents.” This perception remains true today, he says. “Transaction volume is on track to exceed $120 billion this year, compared to less than $20 billion in 2000. The appetite for multifamily investments continues to be enormous, and with the current trends, we don’t expect that to change in the near future.” In recently talking with TruAmerica’s COO, Lynn Owen, about some surprising amenities that have the biggest band for the buck in value add deals, he says that while it might be surprising to some, but approximately 70% of renters are pet owners and amenities such as Bark Parks are a huge hit with renters. “We go a little further by adding agility courses, dog runs and even dog washing areas. We also find that adding an outdoor gym or re-purposing tennis courts into multi-purpose amenity areas with a resident courtyard and BBQ lounge are popular amenities,” he says. Interior renovations are all about the attention to details, he says, and not getting caught up in over improving. “It is definitely an art form though. You have to find that balance between not over improving for your demographic, and giving enough of a ‘wow factor’ to gain the attention of the ever-growing discriminant renter.” *This article was originally published on [GlobeSt.com](http://www.globest.com/news/12_1178/national/gs15/Balancing-Appealing-Design-with-Cost-360881-1.html).* **Categories:** Passco News --- ### [Howard Hughes Center Nabs 10 Offers](https://www.passco.com/howard-hughes-center-nabs-10-offers/) **Published:** June 25, 2015 **Author:** Synoptek Web Dev **Content:** Passco Cos. received 10 offers from investors for the Howard Hughes Center, a 248,841-square-foot retail property. Earlier this week, GlobeSt.com reported that the Laurus Corp. purchased the property for $111 million and plans to invest an additional $30 million for renovations. Now, the seller’s team tells us that the sale was very competitive with a broad range of investors bidding on the property. “We had a very competitive bid environment for this two-level entertainment-oriented retail asset,” Bryan Ley, managing director at HFF, tells GlobeSt.com. “We had all types of investors interested in the asset from institutions and regional groups to foreign capital sources. The most competitive groups realized the need to continue the seller’s business plan of upgrading the asset quality to make it a top-tier retail asset in Los Angeles.” Ley represented the seller in the transaction along with his colleague, HFF director John Crump. Ley adds that Passco decided to sell the property because it had completed its business plan, which was to hold the property for 10 years. “The sale was right on par with that 10-year period and with their upcoming loan maturity,” he says. In addition to representing the seller in the transaction, HFF also secured preferred equity through Torchlight Investors and senior financing through a major money center bank for the Laurus Corp. “The buyer gained a competitive senior loan at market rates and then preferred equity, which would allow them to complete their business plan of redeveloping the asset into a top-tier and modern retail center,” says Ley. “That additional capital is necessary to bring the marquee tenants that they are currently in discussions with.” Like, the competition from investors who realized the inherent value of the property, lenders also saw the value in the property and there was no trouble securing the funds for the Laurus Corp. “With tremendous growth in the surrounding market of Howard Hughes Center and Playa Vista, there is so much velocity and growth going that capital and lenders want to be in this area,” Ley adds. “The lenders here and the buyer both share the same business plan for the future of the asset.” *This article was originally published on [GlobeSt.com](http://www.globest.com/news/12_1140/losangeles/acquisitions_dispositions/Howard-Hughes-Center-Nabs-10-Offers-359249-1.html).* **Categories:** Passco News --- ### [Get to Know Your New Atlanta Competitor](https://www.passco.com/get-to-know-your-new-atlanta-competitor/) **Published:** June 2, 2015 **Author:** Synoptek Web Dev **Content:** Passco Companies is on the move. As part of its national expansion, Irvine, CA company now officially has boots on the ground in Atlanta. Passco brought Colin Gillis on as director of acquisitions for the Southeast. A senior commercial real estateprofessional, Gillis is widely known in the area as an acquisition expert. Gillis previously served in acquisition roles for JRK Investors, as well as Atlanta-based Lane Company. At those assignments, he managed the identification and evaluation of all potential acquisitions in the Southeast. “We are in a time of smart growth for our firm, and we continue to seek opportunities for strategic expansion,” says Gary Goodman, senior vice president Acquisitions for Passco. “Our ongoing, active investment in the Southeast US makes the addition of an Atlanta-based team member a natural next step for the company. By deepening our local market knowledge even further with the addition of Gillis, we are poised to continue our success in acquiring core assets that will deliver strong value to our investors.” In his new role, Gillis will oversee the firm’s Southeast operations, spearheading the identification and acquisition of multifamily product in the region. He brings over a decade of extensive acquisition experience to Passco, including sourcing acquisitions, underwriting, due diligence, macro-and micro-level market analysis, property-level performance analysis, investment committee presentations, and broker and investor relations. “Passco Companies has already demonstrated its strength as an investor in the Southeast US and throughout the nation,” Gillis says. “I look forward to the opportunity to take part in this firm’s ongoing success.” *This article was originally published on [GlobeSt.com](http://www.globest.com/news/12_1123/atlanta/multifamily/Get-to-Know-Your-New-Atlanta-Competitor-358507-1.html).* **Categories:** Passco News --- ### [Passco Goes Back to the Future](https://www.passco.com/passco-goes-back-to-the-future/) **Published:** May 28, 2015 **Author:** Synoptek Web Dev **Content:** It was a rather different video interview we did with Larry Sullivan, president of Passco Companies, and certainly the first time this writer ever conducted an interview in a suped-up DeLorean (Word to future writers: It’s not an easy car to exit). But it seems that the mall featured in the first Back to the Future movie was a Passco mall. But there were other reasons why the Back to the Future theme was appropriate, and in this fun interview, Sullivan explains the significance. And yes, I did get to activate the flux capacitor. *This video interview was originally published on [GlobeSt.com](http://www.globest.com/videos/thought_leadership_video/orangecounty/PASSCO-Goes-Back-to-the-Future-358368-1.html).* **Categories:** Passco News --- ### [Back to the Future Pt. 2: From 1985 to Today](https://www.passco.com/back-to-the-future-pt-2-from-1985-to-today/) **Published:** May 18, 2015 **Author:** Synoptek Web Dev **Content:** We had quite a bit of terrific feedback from our first Back to the Future themed blog installment that discussed what retailing was doing back in 1985. Now it’s time to drive the time travelling DeLorean back from 1985 to today and see what happened over the last 30 years. For regional malls, the golden age of proliferation and seemingly unending expansion into even tertiary markets has come and gone. “Hanging out at the mall” has been steadily replaced by “hanging out at an entertainment-centric center,” or even “hanging out at my computer” for those mesmerized by the ever easier and broad based product access of internet shopping. That said, as in nature, the strongest malls have survived and flourished. When in Southern California, check out South Coast Plaza (is there a world renowned designer who doesn’t have a presence there?) and Fashion Island (amazing ocean view shopping amongst an Italian Mediterranean inspired oasis of fountains, courtyards and olive trees) for a taste of ongoing mall success. The last 30 years has also seen the big box retailing concept experience a rapid aging as many retailers regroup to smaller formats and many large box category killers continue to fall victim to the internet and other brick-based alternatives. Speaking of the internet, some time travelling trivia: - 1984 – the first domain name (.com) is created - 1991 – the world wide web is born - 1995 – Amazon sells its first book - 1996 – online retailing emerges Since 1996, overall internet sales in the United States have continued to expand dramatically. In 2009, internet sales took in $155 billion or 6% of total U.S. retail sales dollars. In 2014, it grew to almost $250 billion, and by 2017, just 20 years since its essential birth, internet sales are expected to capture 10% of the overall market with over $370 billion in sales. That growth seems destined to continue and to keep putting the pressure on traditional retailing to keep up the competition for consumers’ dollars. Stay tuned for Part 3 of this blog: a look into retail’s future 30 years from now in 2045. This blog installment will actually be a live interview from the cockpit of the time travelling DeLorean onsite at our very own booth (C143L) at Recon 2015 in Las Vegas. *Larry Sullivan is the President of Passco Companies. The views expressed are the author’s own.* *This article was originally published on [GlobeSt.com](http://www.globest.com/blogs/counterculture/retail/Back-to-the-Future-Pt-2-From-1985-to-Today-358012-1.html).* **Categories:** Passco News --- ### [Refinancing Retail](https://www.passco.com/refinancing-retail/) **Published:** May 14, 2015 **Author:** Synoptek Web Dev **Content:** Retail finance has never been hotter. Everyone is looking for returns, and domestic and foreign investors have flooded the market with capital. Bottom line – it’s a borrower’s market. But what does that mean for retail investors? With so much competition surrounding the placement of capital in the market, capital providers are increasingly willing to offer creative finance structures to borrowers. Investors, especially those who are balancing both long-term and short-term investments, can benefit from exploring these creative options in order to secure financing that fits their property and investment goals. For example, for many investors, now is a good time to refinance based on the continued historically low interest rates. While many borrowers are evaluating their properties to determine if refinancing makes sense, it’s extremely important to explore options to ensure that the cost of refinancing will be recouped via the subsequent debt service savings. At Passco Companies, we recently conducted a careful evaluation of our portfolio on a case-by-case basis to determine which of our properties were a fit for a refinance. Many of our long-term investments were indeed poised for refinancing, and those investments could benefit from locking in a lower long-term fixed rate as their loan maturities are within the next 2 years. On the other hand, for some of our newer (4 to 7 years) assets, due to the low U.S. Treasury yields, the pre-payment (better know as defesance) penalties and expenses could not be justified. For many of these properties, the financial cost of the defease and refinance wouldn’t even reach the break-even point before the investment’s cycle was complete. The lesson here is simple – today’s retail investors must be extremely cognizant of the overall goals for their properties when making refinance decisions. That said, the market and its future remain subjective. When it comes to refinancing, the decision certainly comes down to the individual borrower’s risk aversion. While many believe that interest rates will soon rise, others see the market continuing this low trend for another several years. These borrowers will likely wait for rates to start to increase prior to refinancing, or hold off on refinancing until their properties are more stabilized or significant rent increases take place in current tenants’ leases. Regardless, all companies should be taking a careful look at their properties to determine if debt service expense-savings opportunities exist, and if these opportunities will fit into their overall business plans. *As Senior Vice President of Investments & Operations for Passco Companies, Mr. Clifton is responsible for negotiating and securing financing for new acquisitions; obtaining refinancing for maturing asset loans; overseeing asset management for Passco Equity Partners; and disposing of select Passco Companies Development assets. The views expressed here are his own.* *This article was originally published on [GlobeSt.com](http://www.globest.com/blogs/counterculture/retail/Refinancing-Retail-357935-1.html).* **Categories:** Passco News --- ### [Back to the Retail Future Pt. 1: 1985](https://www.passco.com/back-to-the-retail-future-pt-1-1985/) **Published:** May 11, 2015 **Author:** Synoptek Web Dev **Content:** As we prepare for ICSC’s annual RECon event this year, Passco is focused on the future of retail. And with the road to the future ahead of us, we’re also celebrating retail’s dynamic past. In fact, we’re introducing a “Back to the Future” themed booth, and yes, it will include a DeLorean time machine. Kicking off this theme, I thought a look back to 1985, the original starting year for this blockbuster movie trilogy, would be fitting, in order to see just how far retail has come over the past 30 years. Most everyone remembers that one of the key scenes from the movie “Back to the Future” was Marty McFly racing the DeLorean time machine back to 1955 through the mall parking lot. What many might not know was that the scene was shot at a real life mall in Puente Hills, California. The date Marty left was October 26, 1985. Big, sprawling malls were still the “in” place to shop although the looming presence of emerging power centers was beginning to seize market share. What’s more interesting about 1985 is the types of tenancies that were emerging at the time and how they were reflective of significant technological change occurring throughout society. Think about this, in 1985: Microsoft is selling Windows 1.0 – Nintendo is selling its first home NES system backed by the #1 game: Super Mario Brothers – and the idea of a cell phone is purely embryonic. New retailers are also emerging including Blockbuster, Fry’s Electronics, Egghead Software, Comp USA and Game Stop. 1985 saw the continued central role of malls in our society and the direct impact that technological advances were having by creating a whole new breed of tenancies. Stay tuned for Part 2 of this blog for a look back at what happened to retail from 1985 through 2015. And then the fun one: a look into the future 30 years to 2045. As Doc Brown said: Roads? Where we’re going we don’t need roads…………… *Larry Sullivan is the President of Passco Companies. The views expressed are the author’s own.* *This article was originally published on [GlobeSt.com](http://www.globest.com/blogs/counterculture/retail/Back-to-the-Retail-Future-Pt-1-1985-357850-1.html?ET=globest:e46376:794611a:&st=email&s=&cmp=gst:Retail_20150511:editorial).* **Categories:** Passco News --- ### [Investors and Multicultural Tenanting](https://www.passco.com/investors-and-multicultural-tenanting/) **Published:** May 8, 2015 **Author:** Synoptek Web Dev **Content:** It’s no secret that the cultural demographics of the US continue to evolve. As some of the world’s economies are declining, foreigners increasingly recognize the economic strength of the United States. This is especially true for the Western region, where educational and business opportunities (coupled with our ideal weather conditions) are particularly alluring for those immigrating to the States. As a result, the business of retail is now evolving and changing more than ever before, in order to accommodate the tastes and preferences of these new consumers. We are seeing major changes in the geographical areas where specific ethnic groups have concentrated. The fact is, the traditional grocery-anchored strip center, which typically includes conventional “American” co-tenants such as dry cleaners or national quick-service food chains, may no longer fit the needs or demands of these newly emerging cultural groups. Today’s retail consumers are seeking increased ethinic diversity in retail offerings across the board. Several foreign investors, many of whom are motivated by a lack of profitable investment opportunities in their native countries, are capitalizing on this trend by entering the US market to develop new centers that reflect evolving multicultural tastes. As these investors enter the US market, they bring not only foreign money, but also their own unique cultural approaches to business. For example, many Asian developers are not as focused on pre-leasing a new center prior to construction, and also don’t rely as heavily on well-known national chains to stabilize their centers. Instead, these developers look for locally popular, established and mom-and-pop retailers who have been successful in the local market and are in-demand with local shoppers. While this trend seems unusual to some in our industry, it really does take retail back to its core – success is knowing your customer and the services, products and restaurants they want, then working to fill that void. At Passco Companies, we’re currently working with many of our foreign investors to identify the right neighborhoods and shopping centers where they can invest. Our investors tend to favor areas where they understand the demographics and culture. For example, our Asian investors are gravitating toward Southern California, and in particular, the cities of Irvine, Arcadia, Diamond Bar and Alhambra, all of which have a large concentration of Asian shoppers, along with other areas throughout Southern California. Moving forward, we are working to keep Passco at the forefront of multicultural investment and retail tenanting. We continue to educate ourselves on the needs and business practices of immigrating individuals, as well as foreign-based investors. We believe the trend of ethnic-specific retail will grow tremendously in the coming decades, and we plan to continue to assist foreign-based firms with their retail investments. *As Senior Vice President of Investments & Operations for Passco Companies, Mr. Clifton is responsible for negotiating and securing financing for new acquisitions; obtaining refinancing for maturing asset loans; overseeing Passco Equity Partners; and disposing of select Passco Companies Development assets. The views expressed are his own.* *This article was originally published on [GlobeSt.com](http://www.globest.com/blogs/counterculture/retail/Investors-and-Multicultural-Tenanting-357788-1.html).* **Categories:** Passco News --- ### [Feeding the Need](https://www.passco.com/feeding-the-need/) **Published:** May 7, 2015 **Author:** Synoptek Web Dev **Content:** **Now that experiences are all the rage, many of today’s luxury shopping center retailers are hoping to satiate this consumer need through restaurants of their own.** ![](https://www.passco.com/uploads/ckupload/images/HOWARD%20WONG-18TU.jpg)The concept of retailer restaurants may have been around since the early 1900s, but it’s only recently gained favor in the 21st century. What began as tea rooms and employee-style cafeterias has evolved into coffee bistros, power lunch spots and the perfect place to grab a drink – and maybe a new tie – after work. “For many decades, department stores had their own generic restaurant, café or coffee bar,” says Howard Wong, Director of Retail Leasing at Irvine-based Passco Companies. “As consumers today become increasingly sophisticated, however, they continue to demand increasingly sophisticated retail experiences and food offerings. Full-service dining is quickly becoming the future for retailers.” While retail sales fell for the third consecutive month this past February, decreasing by 0.6 percent, according to the National Retail Federation (NRF). Sadly, February’s numbers were an improvement when compared to January’s and Decembers drops of 0.8 percent and 0.9 percent, respectively. Department store sales were hit particularly hard, declining 1.4 percent this past February. NRF noted consumers didn’t seem interested in spending the money they had saved on lower fuel prices on retail purchases. Many also didn’t want to venture out in cold weather. Then there are perhaps the two biggest roadblocks to a retailer’s success: online shopping and the trend toward acquiring experiences, rather than objects. Both challenges are widely embraced by today’s most influential demographic, the Millennial, who values not just good times, but their time in general. “Fashion and food have been informally paired for some time, but certain target segments of the buying public – namely, Millennials – are seeing some of their favorite gourmet coffee brands being featured alongside their favorite fashions,” says Derrick Moore, a Principal in the Urban Retail Properties division of Avison Young’s Downtown Los Angeles office. “Retailers realize that by pairing the two, they can create or increase the ‘shopping adhesive’ needed to keep shoppers in their stores a bit longer. Consumers will pay for convenience and access. Having these outlets easily accessible, saves time – and time is money. Consumers will pay for the ability to multi-task and have their favorite eats alongside preferred fashion brands.” **PERKING UP STORE SALES** The retailer-restaurant trend had a modest resurgence in California, where options were typically limited to coffee bars attached to Nordstrom stores. It picked up steam, however, in 1989 when the company’s largest store at the time, a 350,000-square-foot Nordstrom flagship that included four restaurants and a British pub, opened at San Francisco Centre. Nordstrom still holds a great deal of brand awareness when it comes to its food offerings, which range from wine bar cuisine at Blue Stove in Santa Monica Place to coffee shop snacks at Ebar espresso bar at Paseo Nuevo Shops & Restaurants in Santa Barbara and its well-known Marketplace Café at centers like Stoneridge Shopping Center in Pleasanton. Marketplace Cafés throughout the state have built such a loyal following that its Roma tomato basil soup is now sold in a jar over the counter. Another signature item, Nordstrom’s cookies, are also purchased regularly as to-go items. This brand loyalty – whether to the clothing or food – can go a long way, according to Stephanie Skrbin, a Principal at Lee & Associates – LA North/Ventura. “The restaurants offer a certain cache because of the bigger name associated with the concept,” she says. “So a customer who is very loyal to the brand won’t hesitate to spend a little more at the retailer’s restaurant. A brand devotee will tend to linger longer and can even play a day around being in the store, if they don’t have to leave to eat. Whether it’s there as an amenity or destination for the consumer, the restaurant offers another way to generate sales for the mall and the retailer.” **ARM TO TABLE** Though Nordstrom might have set the tone, several other high-end retailers have realized the value of keeping customers in the store when the urge to seek out food arises. Barneys New York recently opened Freds at its Beverly Hills store, while Tommy Bahama has three stores in California that contain its restaurant and bar concept. These include its stores along South Coast Highway in Laguna Beach, at Corona del Mar Plaza in Newport Beach and at The Gardens on El Paseo in Palm Desert. Brand loyalists who have dined at Tommy Bahama have likely noticed the common theme among its merchandise, menus and even locations throughout coastal gateways and palm tree-lined boulevards. This isn’t a simple coincidence, according to Lorena Tomb, vice president of retail brokerage at JLL. “To be successful in the retail-restaurant model, you have to be able to deliver an overall memorable shopping experience where the brand and ambiance created for the retail and restaurant portions are harmonious or, at the very least, complementary,” she says. “If the operator is able to create the right vibe, customers will be more likely to prolong their visits and spend more on each store visit, increasing sales overall.” Speaking of sales, the tropical-themed operator didn’t just open up a few restaurants and call it a day. Instead, its marketing team went to work crafting a slew of unique experiences around the dining destinations. “Tommy Bahama has established itself as the brand for people who choose a life that embraces relaxed and robust living,” says Rob Goldberg, Executive Vice President of the retailer’s restaurants. “Flavors of Aloha’ inspires these same sentiments, stirring fantasies of an endless vacation and giving readers the opportunity to taste a bit of the good life.” Branding “the good life” across its retail and restaurant platforms is probably a good idea, according to Moore. It widens Tommy Bahama’s consumer base, giving diners access to the merchandise, giving diners access to the merchandise, and shoppers the ability to enjoy a good meal inside a story they already know they enjoy. “There are benefits from the ‘cool factor’ that may exist with the fashion brand, which could positively impact the on-site restaurant,” he says. “The restaurant can increase visibility and access to potentially new customers. This can bring in additional traffic, which should lead to cross-sales. It also appeals to multiple shopping demographics.” **COOKING WITH GAS** Though in-store dining has been successful for several retailers in California, Wong notes it’s not easy for a traditional clothing store to simply integrate a foreign component like food and beverage. At least not if they’re trying to do it well. “Apparel retailers are not restaurateurs and they must be cognizant of the fact that food is not their expertise,” he says. “These retailers need to be certain that any food or beverage element added to their retail store matches the quality of their brand.” Other considerations to keep in mind is the additional parking requirements, permits, costs of build-out and operations, and the projected sales per square foot for the retail portion of the store, versus the restaurant portion. “We advise our retail partners that they need to determine if this food/beverage service for their customers to enjoy,” Wong says. “If the service’s primary function is not to generate profits, then the retailer needs to be sure the extra sales it generates in the retail store are worth the money spent to supply the service.” Skrbin also notes the utilities required for a restaurant generally surpass what’s needed for a strictly retail establishment. Grease interceptors and hoods are also essential for most kitchens, which will require conversations between the landlord and tenant, including who will incur these costs. Other tenants can also be an issue. “A retailer restaurant creates a more relaxed atmosphere, which places shoppers in a more positive mood for spending,” Moore says. “Of course, this can have an impact on exclusives and co-tenancy, which could make leasing more challenging due to the overlapping uses. The challenge comes in selecting concepts that resonate with the target audience, that don’t conflict with existing tenants, and where the food and beverage operations don’t negatively impact the shopping experience.” When this is all done right, the full shopping and dining experience comes together. “Retailers who have incorporated the retail-restaurant model have seen a significant increase in their gross sales,” Tomb says. “These concepts can allow retailers to benefit from profits lost to online sales. The main objective is to reinvent the shopping experience to keep attracting customers to the bricks-and mortar locations.” Wong, for one, wouldn’t mind seeing this trend continue. “While it can depend on the department store and its location, overall, tenants with a food and beverage component are very attractive to us,” he says. “Simply put, these retailers often have strong sales and drive excellent foot traffic to the shopping mall or retail center itself. Retailers with food and beverage components can often be a destination for shoppers in and of themselves.” We’ll drink to that. [*This article was originally published in California Centers.*](http://californiacenters.epubxp.com/i/507759-may-2015/15) **Categories:** Passco News --- ### [Passco Bringing Us Back To The Future at #RECon15](https://www.passco.com/passco-bringing-us-back-to-the-future-at-recon15/) **Published:** April 28, 2015 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC, the national real estate investment firm, will be taking us “back to the future” with their DeLorean inspired booth at RECon 2015. Stacy Stemen, Director of Marketing for Passco, came up with the idea. In planning Passco’s RECon booth, she knew she “wanted to do something unique – something no one else will be doing.” She remembered that in Back to the Future, Marty McFly takes his DeLorean to October 21st, 2015. Passco’s relationship to Back to the Future is more than superficial. During the late 1990’s and early 2000’s, Passco was heavily invested in retail, with primarily California-based centers. When the industry took a hit from the recession, Passco shifted some of its attention to investing in multifamily properties. In the past two years, however, Passco has re-focused its attention on its first love – retail. In a sense, Passco is going back to its previously projected future: retail real estate. While there are few DeLoreans in existence today that are close replicas of Marty McFly’s car from the film – Stacy Stemen managed to find one pristine replica in Burbank, California, and secure it for this year’s RECon event. Passco’s booth will feature the DeLorean, and allow RECon attendees to take their photo inside and post it to social media. The booth will also portray a “Retail History” timeline, featuring significant moments for retail from the 80’s, 90’s, and today. One highlight from the timeline: in 2003, Passco bought the Puente Hills mall, the largest ever tenant-in-common transaction at that time. As it turns out, Puente Hills was featured in Back to the Future, as the Twin Pines Mall where Doc shows Marty the new DeLorean time machine. What goes around, comes around, eh? Check out Passco’s booth, the DeLorean, and all that is new with their company at RECon 2015. Their booth will be located in [C143L](https://s3.amazonaws.com/emma-assets/z1pbb/6b21b6c0cd3ab6287f957f4fba479179/ICSC_Floor_Plan.pdf) in Central Hall. *This article was originally published on [TheCenterofShopping.com](http://www.thecenterofshopping.com/blog/passco-bringing-us-back-to-the-future-at-recon15).* **Categories:** Passco News --- ### [Apartment Turnover Rates Will Keep Increasing](https://www.passco.com/apartment-turnover-rates-will-keep-increasing/) **Published:** April 27, 2015 **Author:** Synoptek Web Dev **Content:** In this exclusive discussion with multifamily experts about the demand for apartments, Passco Cos.’ VP asset management Jeff Olshan tells GlobeSt.com that more turnover is inevitable if the economy continues to improve and homeownership becomes more affordable. Here’s more of what came out of that discussion. **GlobeSt.com: What should our readers know about the demand for apartments?** **Olshan:** The demand for apartments will always be directly tied to the economy, politics and geopolitical events. At this point, as long as nothing drastic happens in these areas, the demand for apartments will continue. What will change, however, are the turnover rates. These will continue to increase in the coming years. During the recession, turnover due to homeownership was only 20% to 25%, and today we are seeing about 35% leave to buy a home. This is still small compared to the nearly 50% we saw before the recession. If the economy continues to improve and homeownership becomes more affordable, it is inevitable that we will see turnover increase, likely back to pre-recession percentages. That said, the next generation of young people will quickly fill the void left by those in the Millennialgeneration who eventually move into homeownership and will continue to feed multifamily’s growth. Of course, this could all change if something drastic happens in the economy—we must always remember that real estate is not an exact science, and we all must continually adjust to the changing trends and winds. **Luke Daniels, president, the Richman Group of California:** Customer metrics have shown us that the individual apartment unit can become more efficient as the amenities in an apartment community become more robust. With the explosion of commercial-grad, on-property gyms, lounges, pools and many other recreational amenities in upscale apartment properties, tenants are demanding more common-area amenities and putting less emphasis on the overall size of the individual unit. We at the Richman Group judge our performance by how our customers are judging our communities. We have found that—on a very micro level—demand for apartments can be tied to a focus upon the customer metrics, and without customers nothing else matters. **Sagiv Rosano, president and founder, Rosano Partners:** As supply grows, occupancy rates will ultimately decline. The timing will greatly be determined by how long it will take for the for-sale housing market to fully recover and for income levels to catch up with prices. For many current renters, particularly those in higher income levels, the alternative to apartment rentals is condominiums, as opposed to the more-traditional single-family housing, which was the main focus of residential development over the last few decades. Demand for apartments as an investment product is here to stay. Investors continue to pour cash into this product type. In the current market, the opportunity for strong returns is evident based on the increasing rental-demand trends. For example, render demand remains high in Southern California. The San Diego market is a leader in this sector. In 2015, San Diego vacancy rates are forecasted to reach close to 3.2%, which is extremely low. Based on the low vacancy rate, San Diego rental rates are expected to increase approximately 4% in 2015. In addition, the city continues to lag behind its surrounding region with regard to new inventory—2,700 units are coming online in 2015, down from 4,900 in 2014. More broadly, demand for cheaper new construction is not yet being met. Investors and developers are focusing more heavily on luxury, high-end construction. In these apartments, which typically feature luxury finishes, attractive amenities and/or concierge services, an owner could generate as much as $3,000 per month for a studio. Alternately, there is still strong opportunity and demand for lower-end new construction, where a basic studio could generate closer to $1,500 a month. *This article was originally published on [GlobeSt.com](http://www.globest.com/news/12_1097/orangecounty/multifamily/Apartment-Turnover-Rates-Will-Keep-Increasing-357383-1.html).* **Categories:** Passco News --- ### [Passco Cos. Opens Austin Office](https://www.passco.com/passco-cos-opens-austin-office/) **Published:** April 22, 2015 **Author:** Synoptek Web Dev **Content:** Irvine, Calif.-based Passco Cos. LLC is expanding to Austin. The company has opened a new office and has added industry veteran Shelli Cusack as director of asset management. Cusack will oversee the Austin office, and will also be responsible for a portion of Passco’s multifamily portfolio encompassing more than 3,000 units in North Carolina, South Carolina and Georgia. “As a national firm, we are actively investing in growth markets throughout the U.S.,” said Jeff Olshan, vice president of asset management at Passco Cos. “Passco’s new presence in Austin will deepen our roots in the Southwest, providing our investors with additional expertise in this dynamic investment region.” According to Olshan, the addition of Cusack is another strategic action that will also strengthen the firm’s core expertise on behalf of its partners and investors. “Shelli’s leadership in the industry was confirmed when she developed a proprietary audit and assessment program utilized by institutional clients such as General Electric, Trammell Crow’s Crow Holdings and Passco Cos.,” Olshan says. “By hiring her to work as a member of our firm, we will further streamline our acquisitions and due diligence processes. She will also be integral in Passco’s ongoing research and analysis.” Over her 20 years of experience, Cusack has been responsible for the management of more than $1 billion in real estate assets. Her prior positions include senior management roles overseeing multifamily portfolios throughout the nation on behalf of Greystar Real Estate Partners, Alliance Residential, Pinnacle and Aspen Heights. *This article was originally published on [GlobeSt.com](http://www.globest.com/news/12_1094/austin/office/Passco-Cos-Opens-Austin-Office-357237-1.html?CMP=OTC-RSS).* **Categories:** Passco News --- ### [On the Move - John "Jack" Fitzgibbon](https://www.passco.com/on-the-move-john-jack-fitzgibbon/) **Published:** April 21, 2015 **Author:** Synoptek Web Dev **Content:** John “Jack” Fitzgibbon has joined Irvine-based Passco Cos. as General Counsel. He will handle all legal matters pertaining to the firm’s investment of properties, oversee outside counsel and manage the firm’s general corporate governance matters. Prior to joining Passco, Fitzgibbon served as General Counsel and a principal of the PRES Cos., a real estate company in Irvine. *This article was originally published on [OCRegister.com](http://www.ocregister.com/articles/based-658478-square-newport.html).* **Categories:** Passco News --- ### [Vickie Miller Selected as one of Southern California's Tomorrow's Leaders](https://www.passco.com/vickie-miller-selected-as-one-of-southern-californias-tomorrows-leaders/) **Published:** March 26, 2015 **Author:** Synoptek Web Dev **Content:** Southern California is one of the most active regions of the nation when it comes to commercial real estate. Be it leasing or investment, operations or advising, the CRE professionals in the area have their hands full. The active market is also providing the perfect platform for young women and men who have entered this industry in recent years. Real Estate Forum has scoured the market to identify 20 rising stars who are on track to take leadership positions in the next phase of the commercial real estate business in Southern California. An integral part of the management of more than $250 million in retail properties nationwide, Miller has established herself as a highly respected property manager over-seeing Passco’s entire retail portfolio. Despite facing a recent bout with cancer, she has continued to excel in her career, spearheading the management of a portfolio encompassing more than a million square feet nationwide. Today, Miller is cancer-free, and she continues to serve as a role model to others in the industry. Recently, Miller raised one of Passco Cos.’ most notable properties in Arizona above the debt service ratio by filling all five vacancies in a short period of time. The property is now generating a positive cash flow to Passco’s investors. *This article was originally published in [Real Estate Forum](http://www.reforum-digital.com/reforum/feb_march_2015#pg26).* **Categories:** Passco News --- ### [How to Perfect Elevator Networking](https://www.passco.com/how-to-perfect-elevator-networking/) **Published:** March 10, 2015 **Author:** Synoptek Web Dev **Content:** The traditional elevator pitch may be a thing of the past, but elevator networking is the wave of the future. The average elevator ride is 118 seconds long. For business owners and professionals, those few seconds can provide a tremendous opportunity for connection that can ultimately impact the success of their companies and careers. In the elevator, there is an opportunity to be memorable, to build relationship and generate business referrals —all in the span of 118 seconds. Below are my top strategies for successful elevator networking in today’s business climate: **1. Speak up.** When a businessperson steps onto an elevator, there’s really no time to lose. The first to speak will guide the short conversation, so being the first to comment will place you in a position of networking power. You should be armed and ready with interesting conversation starters that will be useful to fellow elevator riders (as opposed to annoying). Some of my favorite conversation starters include: Beginning with a compliment: This works for both men and women and is a great way to open up a friendly conversation. Complimenting someone’s tie, dress or watch is a great way to start. Sharing a quick fact: “Did you know that if you accidently press one of the floors on most elevators, you can press that same button twice to remove it?” By arming yourself with short, interesting facts like these, you can capture people’s attention and begin a conversation easily. Taking notice of what others are doing: A smart elevator rider can take notice of the floor his fellow elevator companion presses and begin a conversation based on that. By asking “What company is on the seventh floor?” you can find out where your elevator companion works and what he or she does. This conversation leads to future interaction that is centered around business — an excellent boon to elevator networking. Asking for advice: A quick question such as “Where is the best coffee around here?” will open up conversation with elevator riders and could also lead to a future coffee networking appointment. **2. Remember.** The key to networking is to remember the people you’ve met and remember as many details about them as possible. I would suggest using your voice recorder which is on most smartphones or jot down some key conversation items once you get back to your office or car. When you ride with the same person multiple times, you’ll need to draw upon past conversations to forge a deeper connection that can ultimately lead to business success. For instance, if you begin by asking about the floor someone works on, during your next ride with that person, you might ask a question about what their company is doing that day. By remembering the people you’ve already met, you’ll be able to continue the conversation over time and soon the stranger will evolve into a connection. **3. Have your business card handy.** Any good business person will have a business card ready at all times. The elevator is no exception. Naturally I’m not suggesting that you pepper every elevator companion with a card the moment they enter the space but should the opportunity arise, you’ll be happy you were prepared. **4. Take it outside.** In many cases, elevator networking can be expanded to include parking lot networking, lobby networking, you name it. After making an elevator connection, often you’ll find that people are happy to parking garages to continue interesting conversations. It is in these conversations that business referrals or insights are likely to be shared. As business owners and other professionals continue to perfect their elevator networking skills, they will find that the old adage remains true today: Business is about people. And the more people connect, the better your business can be. ![](https://www.passco.com/uploads/ckupload/images/STACY%20STEMEN-12TU.jpg)**STACY STEMEN** *Director of Marketing* Passco Companies, LLC *This article was originally published on [Entrepreneur.com](http://www.entrepreneur.com/article/243771).* **Categories:** Passco News --- ### [Expanding a Firm’s Property-Sector Reach](https://www.passco.com/expanding-a-firms-property-sector-reach/) **Published:** March 2, 2015 **Author:** Synoptek Web Dev **Content:** ![](https://www.passco.com/uploads/ckupload/images/BOB%20PETERSON-13Tu.jpg)Passco Cos.’ new VP investments Bob Peterson tells GlobeSt.com exclusively that his new position will allow the firm to augment its reach into various property sectors now that the economy is getting back on track. Following the recent announcement of his joining the firm, we spoke with Peterson about his new role there, how investors are standing out from their competition and the advantages of diversifying among property sectors when investing in real estate. **GlobeSt.com: What are you looking to accomplish in your new role with Passco?** **Peterson:** Although it began as a retail investment company and has been involved in all the major property sectors over the years, during the last seven to 10 years Passco has been really focused on multifamily investments in primarily stabilized properties. The firm is now making a push for the other sectors as well, and my goal is to expand on my capabilities in industrial, retail and office as well as to expand beyond stable products and into more value-add. **GlobeSt.com: What are the main ways investors are distinguishing themselves from their competitors in order to close deals?** **Peterson:** I’ve been through these cycles in the past. You have to be extremely responsive, move quickly from start to finish, do your due diligence and do what you say you’re going to do. It’s true in life and in acquisitions. Honor your word, and that will lead to strong relationships with brokers and sellers and allow you to succeed. **GlobeSt.com: What are the main differences in underwriting practices for the various property sectors?** **Peterson:** The first couple of things are very similar across all product types. You first take a top-down look, trying to understand the trends from a macroeconomic perspective such as the overall large companies and employers in the area, job growth, infrastructure, schools and quality of life. As you step down to the next level, you want to be in the proper submarkets and understanding those markets, as well as what your competitors look like. The next step down is where the differences lie. For example, in retail, you look at sales volume and how each tenant complements each other; in office, you look at the parking ratio; in industrial, you consider the number of docks and trucking and how access works. There are different factors you look at as you get down to the property level. **GlobeSt.com: What are the advantages of diversifying among property sectors when investing in real estate?** **Peterson:** There are advantages in diversifying to companies like Passco, but there are also advantages to investors. Passco has a tremendous platform in place that includes accounting, asset management and other services, and we can leverage off that as we grow into other product types as long as we have people with the right market knowledge—we can leverage off their reputation. The future advantage is we can be more efficient and go deeper into different markets. For the investors, diversifying is about supply and demand. With some product types, now might be the right time to buy, and for others it might not. Diversifying across product types allows investors to take advantage of the right investment opportunities at the right time given the fundamentals. *This article was originally published on [GlobeSt.com](http://www.globest.com/news/12_1056/orangecounty/acquisitions_dispositions/Expanding-a-Firms-Property-Sector-Reach-355759-1.html).* **Categories:** Passco News --- ### [Cap Rate Limbo: How Low Can They Go?](https://www.passco.com/cap-rate-limbo-how-low-can-they-go/) **Published:** February 27, 2015 **Author:** Synoptek Web Dev **Content:** When Barbara J. Gaffen, co-CEO of Northbrook, Ill.-based Prime Property Investors, heard about the latest deal coming out of Chicago, she almost couldn’t believe her ears. Heitman, the Chicago-based global real-estate giant, had agreed to buy a 60-story, 504-unit luxury high-rise in the Loop for $328.2 million, or $651,000 per door, from the Related Companies. According to Real Capital Analytics (RCA), at that price, the property known as OneEleven became the highest per-door sale of any large apartment building ever in Chicago. Hearing the numbers, Gaffen was baffled. “I mean, what was the cap rate there? Is there a cap rate there?” Gaffen asked. “You’ve got people paying $5,000 a month to live in a two bedroom apartment—in Chicago. I just don’t know how that works. But obviously, with all the foreign capital in this market, these foreign investment funds have the money, and they have an extremely long-term investment horizon. Those funds are looking at 30 years or more. “But that’s certainly not how we do it.” **Shock Appeal** Gaffen’s slack-jawed reaction to the deal is typical of apartment investors watching the market today. Namely, many experienced, long-time pros see the deals happening around them and wonder how high prices can soar, and how low cap-rates can go. “You take New York City, just to keep it simple,” says Michael Weiser, managing director of acquisitions and dispositions at New York-based GFI Realty Services. “Every day you see a new high in pricing, and a new low in cap rates. Almost every day you come to work, you see something that’s absolutely shocking.” He points to the recent $150 million asking price for the penthouse at 550 Madison Avenue in the former Sony Building. At 21,504-square-feet (with a total of 18 toilets), it’s the most expensive listing of an apartment ever in Manhattan. Then, there were the two deals in Brooklyn that GFI brokered at 147 Ocean Avenue and 115 Ocean Avenue, which had cap rates of 3.7% and 3.1%, respectively. The sales prices amounted to 19 and 21.5 times annual rent role for the buildings, records for that submarket. “Can cap rates go lower? Absolutely. We think they can,” Weiser says. “For how long? Well, I wouldn’t be silly enough to make a prediction about that.” According to RCA, while cap rates for all apartments in 2014 averaged 6.1%, for properties in the top 10% of the nation’s top markets, they were 3.5% or lower. “The premium for the best properties continues to grow even as much capital has moved into new markets in search of higher yields,” RCA reported. And the pace hasn’t let up. January 2015 sales volume was up 42% year over year, with overall cap rates inching down another 10 basis points. **A New Normal** But while few expect that compression to stop, those low-slung cap rates have begun to fundamentally change certain aspects of the apartment market, and the traditional mores by which many investors have operated for years. Namely, the risk premium—the spread between interest rates and cap rates, and the extra return that investors gain for putting their money into apartments instead of “zero risk” Treasury bonds—has started to disappear. Indeed, for some of the money coming into the apartment market, it simply doesn’t even matter anymore. “Risk premium over a certain cap threshold has become slightly irrelevant over the past 24 months,” says Kurt Westfield, managing director of Tampa, Fla.-based WC Equity Group. “Roughly 50% to 70% of the deals we’re seeing are cash. Value add opportunities provide all the risk premium investors want.” Those elements have changed not only pricing in the apartment market, but what buyers are looking for in the first place. “Overseas investors are experiencing the slowing economies in China, Europe and the rest of the world,” says Giovanni Isaksen, CEO of Bellingham, Wash.-based multifamily advisory Ashworth Partners. “They’re looking to move wealth to a more stable, secure market. Many of them aren’t looking to ‘make’ money so much as not to lose it. It really puts domestic investors looking for any kind of yield in a tough spot.” Jay Madary, CEO of Oak Brook, Ill.-based JVM Realty Corp., owner and manager of approximately 4,300 units, sums it up thus: “International equity may have investment objectives that aren’t motivated by yield alone.” Gary Goodman, senior vice president for acquisitions at Irvine, Calif.-based commercial real estate investment firm Passco Cos., notes that while the current spread on the risk premium has been shrinking, depending on what deals you consider, it could get slimmer still. “If Treasuries are at roughly 2%, and cap rates are arguably around 5% on average, that’s still 300 basis points,” Goodman notes. “There have been times when it was higher—as recently as 2012 it was about 450 basis points. But back in 2006, there was only about a 100 point spread. So theoretically, it could still come down quite a bit more.” Of course, if interest rates increase in 2015 as many expect, that could squeeze it further. Historically, when interest rates go up, so do cap rates. But many now wonder, with the flood of foreign cash chasing deals, if that will necessarily be the case now. “Remember, everyone has ‘known’ interest rates will go up for three years now,” says Isaksen. “But the fundamentals still haven’t changed. Cap rate spreads could hold much longer than anyone expects.” **Pro Forma Darlings** Cap rate compression, coupled with rent velocities that reached a 41-month high at the end of December, according to Dallas-based apartment research firm Axiometrics, has also led to a trend of increased pro forma consideration for potential deals. For instance, while RCA’s cap rate numbers look at the trailing 12-month period, most buyers will consider a property based on next year’s projected rents. “When you hear those third-party numbers, I think it’s hard for anyone to hone-in on what the actual rate is right now for a given transaction,” says Todd Stofflett, managing director at Chicago-based brokerage Kiser Institutional Group. “Because I will tell you, buyers and sellers look at them completely differently. If we’re talking a Class B, value-add property in suburban Chicago, my seller might look at trailing 12-month numbers and say it’s a 6 cap. But my buyer is going to look at it off of their year one pro forma and put a 6 ½ cap on it. That cap rate is just a perception based on who’s doing the modeling.” While using pro forma numbers is an accepted and widespread practice, especially for value-add properties where NOIs can get a quick boost from increased rents or reduced expenses, it’s also not the most conservative way to look at a deal. “We’re always concerned about where cap rates are in terms of trailing numbers,” Goodman says. “That’s fundamentally how you want to price your real estate, because the rental growth in the future is somewhat subjective. On the other hand, if you’re confident you’re going to get some rent growth, then you’re generally willing to pay more, and cap rates are going to go lower.” **A Fear of Missing Out** Of course, with rents projected to continue to increase in 2015—albeit at a slower rate—that type of assumption still makes sense. And demographic, supply and homeownership data all suggest demand for apartments will remain strong through 2015 and beyond. It is still worth noting, however, that the single family housing bubble inflated itself with a similar logic: Increasing home values would allow owners to refinance at better terms in the future. Until they didn’t. While multifamily lending standards aren’t anywhere near the atmosphere of the single-family crash—“That was buying with a zero cap rate,” notes PPI’s Gaffen—using pro forma numbers on a prolonged basis means someone, at some point, will guess wrong. “Eventually, someone will overpay and not be able to obtain a profit,” says Matt Krauser, senior managing director at New York-based commercial real estate research firm Integra Realty Resources. “But the thinking is that investors will see a breakdown in the fundamentals before that point and sell off their assets with a profit.” For that to happen, though, investors will need to see the sell off before it comes. “The hardest part of the equation right now is the exit strategy underwriting,” says Darron Kattan, managing director at Franklin Street Real Estate in Tampa, Fla. “Trying to figure out where we will be in five, seven or 10 years from now is an art form, and in order to make these models work, people have to make very aggressive assumptions. By the same token, with the tried and true motto of ‘other people’s money,’ I sense caution is secondary to doing deals for a lot of people.” After all, in this market, being cautious could mean missing the boat entirely. “When you look at the recent rent data, coupled with the demographic and lifestyle trends, people aren’t thinking about what they’ll do if they have to get to the sidelines quickly,” says Bill Baumann, senior managing director at Chicago-based brokerage Kiser Group, (no affiliation with Kiser Institutional Group). “They’ve got a much bigger fear of missing out on the ride in the first place.” Can cap rates go lower? Just watch. *This article was originally published in [Multifamily Executive](http://www.multifamilyexecutive.com/business-finance/cap-rate-limbo-how-low-can-they-go_o?utm_source=newsletter&utm_content=jump&utm_medium=email&utm_campaign=MFE_022615&day=2015-02-26&he=a59265d1d4b826b6429b20223148e345f50b5519).* **Categories:** Passco News --- ### [There’s Something for Everyone in Multifamily](https://www.passco.com/theres-something-for-everyone-in-multifamily/) **Published:** February 4, 2015 **Author:** Synoptek Web Dev **Content:** Enough variety exists in multifamilyinvestment to satisfy foreign investors, value-add seekers and those looking for long-term yield, Passco Cos.’ SVP acquisitions Gary Goodman tells GlobeSt.com exclusively. We spoke with Goodman in the wake of NMHC’s Apartment Strategies Outlook Conference in Palm Springs last month to get his take on what investors are seeking, the foreign-investor outlook on this market and anticipated changes for the coming year. **GlobeSt.com: What are investors looking for in multifamily properties?** **Goodman:** There’s such broad interest in multifamily right now because of the environment. There’s something for everyone. There are a number of investors who will only work for value-add because of better long-term yield, and there are those of us who want better quality long term. Others seek secondary and tertiary markets for higher yield, and there are those who stay in gateway cities because the performance may be better. You can hardly imagine doing wrong with any of these strategies because there’s such a tailwind in the industry. **GlobeSt.com: Are foreign investors focused on different types of properties?** **Goodman:** We are advising a number of foreign investors. One family-office group out of Asia is investing in value-add, older properties we’re rehabbing and in new properties we are sourcing. They look at the market and are trying to cover the spectrum. They see opportunities in all areas. A lot of foreign investors are just interested in placing their money in the US and are looking at all the alternatives in multifamily. It always starts off with trophy properties for those unfamiliar with the landscape, and then they form alliances with local developers or sponsors. As the market starts to mature, they begin to realize, “Maybe I should listen to the sponsor who says I can get a higher yield in this market or with value-add strategies.” **GlobeSt.com: Which markets are foreign investors currently eyeing for multifamily?** **Goodman:** Foreign investors typically like the major gateway cities. Some only want to invest in New York, San Francisco, L.A. and Miami. But an Italian advisor we know is putting together a new fund looking at secondary and tertiary markets because he’s learned the yield is better there. They have a difficult time competing with investors who want to be in these major markets. There’s less competition and better yield in these other markets. **GlobeSt.com: What changes do you anticipate for this sector in the coming year?** **Goodman:** I don’t know that there will be as much of a change as a continuing trend. It’s hard to imagine anything is going to derail this frothy environment for multifamily. There’s so much working in favor of it. There’s a disciplined supply pipeline and a huge demand of Millennials in the renter pool, plus the Baby-Boomer population has become a part of it. They were dismissed in the last several years for multifamily, but the overall trend is so strong, and people have to live somewhere. Many residents including Baby-Boomers and Millennials are getting priced out of the urban cores because rents have gotten so high and apartments are so small. What we’re starting to see is a lot of them moving out into the exurbs, where there are movie theaters and their favorite chain restaurant and they can walk to work. It’s a lot bigger apartment for the money. *This article was originally published on [GlobeSt.com](http://www.globest.com/news/12_1039/orangecounty/multifamily/Theres-Something-for-Everyone-in-Multifamily-354973.html).* **Categories:** Passco News --- ### [Invest in Multifamily RIGHT NOW! Here's Why...](https://www.passco.com/invest-in-multifamily-right-now-heres-why/) **Published:** January 19, 2015 **Author:** Synoptek Web Dev **Content:** Multifamily markets. Multifamily investing strategies. Multifamily buying criteria. Today’s Best Ever guest is a multifamily expert and we talk all about multifamily. Click the link below to listen and learn baby! [Joe Fairless 139: Invest in Multifamily RIGHT NOW! Here’s Why…](http://goo.gl/Si06wz) Gary Goodman’s real estate background: - Senior VP of Acquisitions for Passco Companies based in Irvine, California - Over 30 years of industry experience and is responsible for acquiring properties with combined value of over $4B - Sits on the Board of Directors for the National Multifamily Housing Council *This interview was originally published on [Best Real Estate Investing Advice Ever with Joe Fairless](http://goo.gl/Si06wz).* **Categories:** Passco News --- ### [Sea of Liquidity](https://www.passco.com/sea-of-liquidity/) **Published:** December 26, 2014 **Author:** Synoptek Web Dev **Content:** Fred Schmidt, president and COO of Coldwell Banker Commercial, believes debt and equity capital will be more available in 2015. And that’s good news – at least for now – for the recovering commercial real estate market. The Mortgage Bankers Association has forecast origination by mortgage bankers will rise by 8 percent by the end of 2015, after an estimated 6 percent bump-up last year. That is still a far cry from the whopping double-digit volume pumps during 2011-13, immediately following the Great Recession. But by the end of this year, total commercial/multifamily originations by mortgage bankers will be substantial – at $407 billion, according to the MBA – almost back to the 2007 peak level of $508 billion. Notably, at an expected $173 billion, multifamily financing in particular should exceed its 2007 peak volume of $148 billion. That makes for plenty of liquidity to drive the commercial real estate market. If anything, capital appears to be constricted currently by the death of appropriate commercial real estate opportunities, rather than by the amount of capital available, at least in the primary and, increasingly, secondary markets. “Everyone complains that there is a lot more money than good deals. …Capital is more aggressive because there are fewer properties; there is a lack of quality out there,” said Danny York, president of Franklin Street Capital Advisors. The upside for borrowers: York expects the cost of capital generally to be lower this year “as long as it is difficult (for lenders) to find good deals.” Still, from the lender’s point of view, the quality of deals is set to improve. The higher mortgage bankers originations volume in 2015 will be driven by improving commercial property markets, fundamentals and asset values, according to Jamie Woodwell, vice president of research and economics at MBA. Additionally, after settling at a trough in the past few years, the wave of mortgage bankers’ loan maturities – projected to surge by 72 percent in 2015 – is scheduled to begin this year. Indeed, there is no longer the same grave concern that the capital markets will lack the capability to offer up enough dollars to refinance the big wave of maturing loans – at least, the quality ones. There continues to be very strong lender appetite to place capital into commercial real estate, said Woodwell. The reason is that commercial mortgages have performed very well through the recession compared to other investment opportunities on a risk-adjusted basis. All major investor groups are expected to increase their debt originations volume this year, according to MBA’s forecast. For example, life insurance companies experienced a record volume year in 2014, and will see another strong year in 2015, said Woodwell. “The appetite among life insurance companies for commercial mortgages will continue to be strong in ’15 as markets continue to improve,” Last year saw strong investor demand for CMBS, he noted, and the key question in 2015 is whether, given the spike in loan maturities, there will be significantly higher loan supply for CMBS and “opportunities to increase issuance.” As for Fannie Mae and Freddie Mac, Woodwell expects a strong fourth quarter for the agencies as the hot multi-family market, loan maturities and robust rent levels carry forward the momentum from year-end 2014. The Federal Housing Finance Agency, which oversees the two agencies, had dictated a 10 percent reduction in footprint in 2013, but did not issue a similar directive for a further 10 percent reduction in footprint last year. Originations fell to well below the 10 percent limit in 2013 and in the beginning of 2014, Fannie/Freddie production volume increased considerably, and volume for all of 2014 will likely prove to be back up closer to the 10 percent cap, he commented. All eyes will be on the FHFA this year regarding any further directives to change the GSE’s financing limits. Banks, meanwhile, having pulled back from their financial issues, are expected to be solidly active. These financial institutions “have shown very strong appetite for commercial properties and extremely strong appetite for multi-family. They had shown strong growth in originations and balance of loans held. We are looking for continued strong appetite from them,” Woodwell noted. **Building Bridges** More capital is also expected to flow into construction and bridge financing in 2015, and the strength of the permanent financing market will boost confidence among bridge financing providers, suggested Malcolm Davies, principal at George Smith Partners. “No question, we are seeing bridge players stretch for really good, well-located properties (at LTVs of) 85 to 90 percent or more.” The bridge financing market, said Davies, has strengthened in the past 12 to 18 months because lenders can more easily see favorable exits down the road via disposition or refinance. “It comes down to how liquid the permanent market is now.” At the top of the capital stack, Davies predicted that the pricing for mezzanine and preferred equity financing will fall farther due to competitive pressures among lenders. He added that there will be more one-stop shops – more mezzanine and permanent lenders will partner to offer seamless, blended-rate combined perm-mezz financing that pushes the leverage up to 85 percent, and in some cases as high as 90 percent. Mezzanine loans or preferred equity on desirable properties is being priced from 7 to 10 percent, and the blended rate can be 5 to 7 percent. The greater availability of mezzanine financing is also starting to affect the condominium construction market. LTVs for senior construction loans are still about 65 percent, but the mezz pieces the LTVs on the condo construction loan can be brought as high as 80 percent, said Davies. “Mezzanine will become more prevalent,” agreed York. “There are more mezz lenders in the market.” Since the end of 2014, said Larry Sullivan, president of Passco Cos., more players have emerged in the mezz market. Foundations, endowments, family offices and high-net-worth individuals are all getting a foot in the door. York ventured that because mezz is cheaper than equity, as more mezz becomes available, borrowers will be switching more equity into a mezz piece. Even international players are getting involved in the debt market. More investors from Asia and Europe are now not only participating in joint ventures but also providing preferred equity, according to Sullivan. In fact, the company intends to expand its penetration of global capital this year, he said. There is “competition from all sides of the capital stack,” said Schmidt. And with so much global capital available – and so much more available in general – greater leveraging is now possible, Sullivan noted. *This article was originally published in the [Commercial Property Executive January 2015 issue](http://digital.cpexecutive.com/publication/?i=239796&ver=html5&p=44#{).* **Categories:** Passco News --- ### [Are We in a Multifamily Bubble?](https://www.passco.com/are-we-in-a-multifamily-bubble/) **Published:** December 19, 2014 **Author:** Synoptek Web Dev **Content:** The question of whether we are in a multifamily bubble is one that has recently been on the minds of many real estate investors. While predicting the future with certainty is impossible, there are some compelling facts that suggest that multifamily investments will continue to outperform all other types of real estate. **Is there enough demand?** The answer to this question is a resounding yes. With some 80 million student-debt burdened Millennials entering the renter pool, the demand for apartments will increase dramatically over the next 5 to 10 years. The fact is, 23-year-olds are now the single largest age group in the U.S., and the largest cohort of renters is aged 20 to 34. In addition, the baby boom cohort (the oldest being age 68) is increasingly interested in renting apartments. As many in this generation retire, sell the “nest” and enter a new lifestyle to become leisure travelers, they are increasingly seeking the maintenance free environment that renting can offer. This new renter group is only adding to the demand for multifamily. **Are there too many apartments being built?** Many observers have expressed concern about “overbuilding.” The fact is that the average number of units delivered to the market each year since 1994 has been approximately 350,000 units. This is also the number of units expected to be delivered in the next 12 months. In addition, during the past twenty years, there were several years when the supply of units exceeded 500,000. Alternatively, between 2009 and 2012 we saw less than 200,000 units delivered. Based on this data, we actually have some catching up to do. **Are cap rates too low?** There has been some concern regarding the valuation of multifamily as defined by cap rates. Cap rates generally are a predictor of future rental growth and are to a lesser extent affected by interest rates. A key metric is the spread between cap rates and the 10-year Treasury yield. That spread is now approximately 350 basis points. It has often been much lower, being only 100 basis points in 2007 and even reaching a negative number in 1989. This suggests that cap rates could actually continue to decline in the coming years. **What is this “Wall of Capital?”** Over the last 30 years, savvy real estate investors have seen that, of all product types, investments in multifamily have performed the best. This has been documented by the National Council of Real Estate Investment Fiduciaries (NCREIF). With the economy continuing to be in the doldrums, foreign investors, public and corporate pension funds and private investors continue to seek multifamily for its long-term superior returns. **What’s the bottom line?** With the enormous future demand for apartments from millennials and retiring baby boomers, a modest supply of new apartment communities entering the market, as well as heightened investor interest, we are likely to see continued pressure on the pricing of multifamily as an historically exceptional investment. ![](https://www.passco.com/uploads/ckupload/images/GARY%20GOODMAN-13TU.jpg)*Gary Goodman is a Senior Vice President at Passco Companies in Irvine, Calif., currently heading the multifamily acquisition team for the firm. An acquisitions specialist with more than 30 years of industry expertise, Goodman is responsible for locating, negotiating to acquire, underwriting, and completing due diligence for each of Passco’s multifamily acquisitions throughout the U.S. Contact him at [ggoodman@passco.com](mailto:ggoodman@passco.com?subject=Response%20to%20Multifamily%20Bubble%20Article).* **Categories:** Passco News --- ### [How Next Gen is Changing the Face of CRE](https://www.passco.com/how-next-gen-is-changing-the-face-of-cre/) **Published:** December 15, 2014 **Author:** Synoptek Web Dev **Content:** Millennials have created a revolution in the commercial real estate industry with their fresh and unique approach to life and their shifting priorities in the workplace, at home and in their leisure time. GlobeSt.com spoke exclusively with CRE experts about the most significant ways Millennials have changed the face of the industry. Stay tuned for an upcoming feature story in Real Estate Forumabout this cohort’s influence on commercial real estate. **GlobeSt.com: What do you feel is the most significant way this demographic has changed the face of commercial real estate?** **Stanley Iezman, CEO and chairman, American Realty Advisors:** Millennials are significantly affecting the face of multifamily housing in a variety of ways. First, the changing life cycle of Millennials—i.e., getting married later, having children later, as well as their sheer numbers—has created significant demand for multifamily from Millennials. Their preferences have impacted design of multifamily housing, whether it is the addition of bike repair/service rooms, Wi-Fi throughout properties or larger social common areas (that sometimes look like the inside of the latest tech firms) with foosball tables, Internet-ready big-screen TVs and coffee bars. Millennials are even indirectly impacting industrial as they have a higher propensity to buy online and demand just-in-time delivery, increasing the demand from e-commerce companies for local industrial distribution centers. Millennials, like the Baby Boomers, are a game changer. Winning their game depends on how one understands and responds to their unique needs. **Brad McCord, registered marketing representative, Passco Cos.:** The most significant way that the Millennials have changed the face of commercial real estate is by making developers more creative in the way they design and market new projects. This all goes back to what is appealing to this generation. Millennials depend heavily on Yelp reviews when making a decision on where to live. They also look more favorably at the trendy, more Internet-savvy apartment communities. Millennials tend to believe that if a complex has an appealing online presence, then it is more likely to be a good place to live. This thought process is not only applicable to finding a home, but also applies to all aspects of their lives including choosing entertainment destinations and workplaces. More Millennials have the entrepreneurial mindset as well and like to work for companies, and in environments, that provide this type of culture. Creative-office space has become extremely popular and provides the open communication and brainstorm-inspiring environment to which Millennials are attracted. Moving forward, it is crucial that commercial developers keep up with the Millennials and these trends or they may find themselves having trouble leasing to the increasingly Millennial-dominated workforce. **Christian Beaudoin, national director, Jones Lang LaSalle’s Corporate Solutions:** This demographic has helped the industry realize that work is something you do—not necessarily somewhere that you go. Looking forward, the most successful commercial properties and companies will provide the flexibility to empower and connect people, regardless of where they work. **Andy Irwin, SVP, Murphy Development:** The trends we see in Silicon Valley magnify the effects that this demographic has on commercial real estate. Large campuses are being erected to house the top tech companies. These campuses are offering the employees an experience of being at a resort or a home away from home. The architecture is extravagant and creates a desire to be there. You can spend your entire 24-hour day there and have all of the comforts of your life outside of the campus: morning coffee, exercise area, cafeteria for lunch, happy hour at the on-site lounge and sleeping area for the occasional overnighter. While small companies are not going to provide the full service of a campus tenant, many of these components are being incorporated into the workplace.” **Heidi Hendy, founding principal, H. Hendy Associates:** Millennials have inspired the campus-like features of new builds and influenced the way that old buildings are carved into and redesigned. Above all, Millennials want accessibility to the people and the tools that they need. This means room for collaboration, easy access to amenities and up-to-date technology. Offices are now designed to meet these needs, and this is changing not just what commercial real estate looks like, but how it functions for its tenants. **Categories:** Passco News --- ### [Lansner: Be thankful for these trends](https://www.passco.com/lansner-be-thankful-for-these-trends/) **Published:** November 26, 2014 **Author:** Synoptek Web Dev **Content:** It’s the day to give thanks – for family, friends, food … and in this forum, fortunes. I asked some folks in the local business community about what economic and industry trends they were thankful for – not a tough question in a year when most economic indicators performed as well as they have since the Great Recession. Here’s a sampler of economic patterns that are making execs smile this Thanksgiving: **Strong holiday spending:** Chapman University economist Esmael Adibi thinks 2014 should be the best holiday shopping season since the recession started. “Although wage growth has been anemic, higher level of employment means higher level of income and spending. Also, homeowners who refinanced mortgages over the past couple of years have more disposable income,” he says. “Positive wealth effect emanating from higher equity market and home prices improved consumer sentiment. And lower gas prices will work like a tax cut – leaving consumers with more money to spend.” **More meetings:** Jay Burress, CEO of the Anaheim/Orange County Visitor & Convention Bureau, is thankful for more meetings, and not just because he sells meeting space for a living. “We are grateful this massive economic generator is thriving and growing,” Burress says. “Meetings and tourism matter today and will well into the future. Business travel helps companies obtain new customers and retain existing ones. In-person meetings double the likelihood of ‘prospect conversion.’” **Internet choice:** John Brynjolffson, founder of the Armored Wolf hedge fund from Irvine, is thankful for online information’s “long tail” – the greater range of product variety offered consumers today. While many folks have nostalgic feelings about businesses disrupted by the Internet, Brynjolffson says, “Statisticians confirm that the range and breadth of books available on Amazon, and other products available to consumers, now dwarf that of the 1980s. The long tail transcends books. In the past, the top five hand soaps, the top 50 vacation destinations or the top five political commentators dominated. Today, through the wonders of technological search and distribution, we have the long tail.” **Foodies:** Chef Cathy Pavlos of Provenance in Newport Beach and Lucca in Irvine is thankful for the growing interest in food. TV networks like Food Network and other media outlets “have given attention to the chef and gotten folks excited about the quality of their food.” Her newer Provenance eatery grows some of its food nearby and has an open kitchen. “People appreciate seeing where their food comes from, how it is handled and prepared,” says Pavlos. She notes Provenance has “a large window when you walk in that peeks on the pastry area and then one facing the rest of the kitchen, so there is transparency.” **Lighter beers:** Alex Puchner, the beer expert at the BJs restaurant chain from Huntington Beach, is thankful for growing popularity of low-alcohol, small-batch-brewed beers. “After several years of increasingly extreme beers from craft brewers trying to push the boundaries of hop bitterness and alcohol content, this year we saw the pendulum swing the other direction,” Puchner says. “This was the year of session IPA, a new craft beer style defined by pronounced hop character and low alcohol content. Just look at Europe, where session beers have been the norm for hundreds of years. I predict that American craft brewers will embrace styles like Bohemian pilsner and English bitter in 2015.” **China’s American intrigue:** Burress of the Visitor & Convention Bureau is also thankful for growing Chinese interest in various slices of the U.S. market and culture. In May, Orange County hosted “Perfect China” with 7,000 Chinese people attending – the largest group meeting from China in the United States. California was the top destination of U.S.-bound Chinese tourists in 2013. “China is a critical emerging travel market, and Anaheim and Orange County, the state of California and the U.S. are only beginning to tap the full economic potential of attracting visitors from that country,” Burress says. **Generational alignment:** Tricia Esser, CEO at KTGY architects from Irvine, is thankful that older baby boomers are looking at the same housing styles and neighborhoods as young, hip millennials – a trend that may give added momentum to urban renewal efforts. Boomers, Esser says, want to live “where they can walk to shops, be transit-close, in shopping and entertainment districts. Boomers are proving that they’ll buy single-level-living homes in a vertical environment – i.e., high-rise housing – in supposedly young people’s neighborhoods. We should be thankful that developers and cities are now listening to these trends. … Building near employment, transit, shopping and entertainment amenities also helps keep more cars off our busy roadways and continues the revitalization of our urban areas.” **Changing Boomer tastes:** Bill Passo, CEO of real estate investor Passco Companies LLC, is thankful that the new generation of empty-nesters is more likely to consider rentals vs. downsizing into smaller ownership housing. “One aspect that is drawing baby boomers to rent is the luxury and amenity-rich options,” Passo says. “Renters can find multifamily properties that are complete with on-site concierge services, movie theaters, business centers, activities, dog parks and dry cleaning. In addition, renting saves baby boomers from having to deal with the issues often associated with owning a home.” **Extra giving:** Larry Webb, CEO of builder New Home Co. from Newport Beach, is thankful for the economic recovery because it gives industries the financial flexibility to help. His company’s recent annual golf tournament raised $275,000 for Interval House, a charity that aids victims of domestic violence. “The homebuilding industry is back on its feet, and builders are rallying to give back to the community,” Webb says. **Good news from bad news:** Margaret Bayston, executive director of the Laura’s House charity, sees benefit from the extensive media coverage of high-profile domestic violence cases. Her Ladera Ranch-based group aids victims of this abuse. Bayston says the media coverage boosted awareness of this problem and “brought Laura’s House to the forefront of many conversations and is elevating the nonprofit’s important programs and services. The hopeful result is that more women will reach out for help – now, and in the future.” **Categories:** Passco News --- ### [Passco Acquires Newly Constructed Leed Gold Certified Class AA Multifamily Community in Greater Atlanta](https://www.passco.com/passco-acquires-newly-constructed-leed-gold-certified-class-aa-multifamily-community-in-greater-atlanta/) **Published:** November 25, 2014 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC has acquired the recently completed 238-unit Class AA multifamily community Twenty25 Barrett. The LEED Gold certified community, which was completed in February 2014, is located just outside Atlanta in the City of Kennesaw, Georgia, within business-centric Cobb County, according to Gary Goodman, Senior Vice President Acquisitions of Passco Companies. ![](https://www.passco.com/uploads/ckupload/images/AMLIBart-64-Club-sf.jpg)“Twenty25 Barrett is an institutional level multifamily asset, located in the rapidly growing economic hub of Cobb County,” explained Goodman. “The asset’s location is directly aligned with Passco’s ‘Next 10’ acquisition strategy, through which we acquire properties in markets that are poised for growth and expansion over the next ten years.” He continues, “Twenty25 Barrett’s prime location in this booming business-centric market will fuel progressive rent growth and demand for quality housing for years to come, making this a strategic acquisition for our investors.” According to Goodman, Cobb County has been a sought-after site for businesses across the country for the past decade. “Cobb County’s Platinum Triangle area currently boasts more than 24 million square feet of office space,” he explained. “The area has also attracted four Fortune 500 companies, including Home Depot, Coca-Cola enterprises, Genuine Parts, and First Data.” In addition, the region is home to several other major employers, including Lockheed Martin Aeronautical Systems, IBM, CBeyond, Worldspan, Wellstar, and GE Energy. “Cobb County has consistently demonstrated a higher-than-average employment rate as a result of its business-friendly environment,” explained Goodman. “Continued interest from national and international companies will facilitate ongoing job creation, attracting new renters and driving the profitability of the area’s apartment market.” The City of Kennesaw is also home to Kennesaw State University, which is the third largest public university in Georgia’s state system. The university is currently projecting total enrollment to reach 35,000 by 2016, up more than 45% from its current enrollment of 24,100 students. ![](https://www.passco.com/uploads/ckupload/images/AMLIBart-73-Model1-sf.jpg)Goodman notes that the growth of Kennesaw State University will only increase demand for quality housing from current college students, as well as recent graduates who transition into the local job market. In addition to this increasing renter demand, the growing retail market in Kennesaw will fuel the profitability of Passco’s investment, according to Goodman. “As a result of the strong local business climate, retail development in Cobb County has been dramatic over the past two decades. The City of Kennesaw currently features more than 2.85 million square feet of retail situated within a 1.25-mile section of Barrett Parkway,” he explained. “Based on Twenty25 Barrett’s location, which is in close proximity to this retail-centric area, the property will continue to attract renters that want to be close to shopping, entertainment, and employment.” Goodman noted that renters and potential residents in the Kennesaw area are affluent, with an average median resident income of $90,000. “Cobb County’s above-average income will continue to support future rent increases,” he explained. In addition, the population in the City of Kennesaw is growing. Over the past decade, the City experienced a population growth of 34.4 percent. This rapid growth consumed much of the developable land, resulting in few planned multifamily developments and a local government that is opposed to rezoning requests, according to Goodman. ![](https://www.passco.com/uploads/ckupload/images/AMLIBart-87-Model1-sf.jpg)“With little remaining land zoned for multifamily projects and very few multifamily developments in the pipeline, Twenty25 Barrett is poised to stand out among its competition as a superior product,” he said. Twenty25 Barrett is LEED Gold certified, and includes several high-end amenities such as an urban-style clubhouse/business center, state-of-the-art fitness center, executive club lounge, swimming pool with sunning shelf, dog park and grooming station, as well as a lakefront trail. With innovative construction that was executed by AMLI development, the property’s units are modern and spacious, averaging 990 square feet. Many units feature 9- to 11-foot ceilings, attached garages, granite countertops, prep islands, stainless steel appliances and wood floors. Twenty25 Barrett is located at 2025 Barrett Lakes Boulevard in the City of Kennesaw, Georgia. **Categories:** Passco News --- ### [Millions of New Households Could Soon Form](https://www.passco.com/millions-of-new-households-could-soon-form/) **Published:** November 5, 2014 **Author:** Synoptek Web Dev **Content:** ![Stan Humphries](https://www.passco.com/uploads/ckupload/images/sf_stanhumphries635cropped.jpg)Stagnant incomes and rising rents left the US with an unprecedented number of doubled-up households as people moved in together to make ends meet. That is according to locally based Zillow. The firm says that all those roommates have changed the American housing landscape, with 5.4 million households that would exist under normal conditions instead lost in guestrooms and basements, sharing space with friends, family and roommates, waiting for better economic times. According to Zillow analysts, more than a third of working adults are living in doubled-up households, driving the median household size up to 1.83 adults in 2012 from 1.75 in 2000. The phenomenon is concentrated in markets where rent has most outpaced income, notably in California and Florida, says Zillow. In the Riverside, CA metro area, for example, under normal conditions, there would be 12.6% more households. In the Miami metro, more than 230,000 households—11.3% more households than currently exist—were lost as people doubled up. As the housing market becomes friendlier for buyers and the economic recovery continues, those lost households could represent a significant source of pent-up demand in the market as they begin to look for a new place to live, Zillow analysts say. “The rise in doubled-up households is a troubling sign of the times and starkly illustrates one of the prime drivers behind weak home sales these days,” says Zillow chief economist **Dr. Stan Humphries**. “But there is a silver lining behind this data.” Humphries explains that “like a coiled spring, all of these doubled-up households represent tremendous potential energy for the market. If and when these compressed households begin to unwind and these millions of Americans do start to create their own households, demand will bounce back, possibly even causing household growth to outpace population growth.” That added demand will, in turn, he continues, “create more incentive for builders to construct more homes, and will help unblock the market. There is no magic bullet, but continued home affordability, an increasing supply of both for-rent and for-sale homes and the potential for incomes to grow more quickly as the economy recovers will all help the market to realize this potential.” There is an increasing number of baby boomers who are selling their homes and moving into apartments, driving additional multifamily demand, says Goodman. ![Gary Goodman](https://www.passco.com/uploads/ckupload/images/la_new_new_garygoodman.jpg)There is definitely a “silver lining” when it comes to the demand for apartment living, **Gary Goodman**, SVP of Acquisitions at **Passco Cos**. tells GlobeSt.com. “As job growth improves, those that were forced to double up during the recession are now parting ways, and are getting their own places.” In addition, he says, “those in the Gen X and Millennial generations are now moving out of their parents’ homes to rent for the first time. Interestingly, we are also seeing an increasing number of baby boomers who are selling their homes and moving into apartments, driving additional multifamily demand.” For many, Goodman continues, “owning a home today is simply not an option due to student debt, strict underwriting requirements, and not to mention the hefty down payment requirements. The home ownership rate continues to decline, and is currently the lowest it’s been in 19 years, at 64%.” Many home owners, he adds, are also selling because they don’t want to deal with the headaches of owning a home anymore. “Despite the fact that the economy is getting better, people are simply not gravitating toward single family home ownership. And with the home market continuing to be flat, the interest in the rental market continues to climb.” **Categories:** Passco News --- ### [Passco Reenters the Retail Market](https://www.passco.com/passco-reenters-the-retail-market/) **Published:** October 16, 2014 **Author:** Synoptek Web Dev **Content:** Passco President Larry Sullivan is interviewed by Kelsi Maree Borland of GlobeSt.com about Passco’s return to the retail market. In the interview Mr. Sullivan talks about Passco’s rich experience in retail, their transition in the early 2000s, and why the company is returning to the retail sector. **Categories:** Passco News --- ### [Passco Acquires 244-unit Multifamily Community in South Carolina](https://www.passco.com/passco-acquires-244-unit-multifamily-community-in-south-carolina/) **Published:** October 8, 2014 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC has acquired the 244-unit Class A multifamily community Vinings at Laurel Creek. The newly constructed community, which was completed in 2013, is located in the highly desirable Greenville-Spartanburg-Anderson region of South Carolina known as “Upstate,” according to Gary Goodman, Senior Vice President Acquisitions of Passco Companies. ![](https://www.passco.com/uploads/ckupload/images/Vinings_1.jpg)“The Upstate region of South Carolina has demonstrated tremendous growth over the past twenty years,” explained Goodman. “Vinings at Laurel Creek is located in Greenville’s most active employment submarket, ensuring ample renter demand from the growing population of area employees.” According to Goodman, Vinings at Laurel Creek is in close proximity to downtown Greenville, and is also adjacent to two of Greenville’s newest business and technology parks, including Clemson University’s International Center for Automotive Research (CU-iCar), as well as the Millennium Campus Business Park. “Greenville’s unemployment rate is currently 2.2 percent lower than the national average,” explained Goodman. “The region’s strong employment rate is a result of a large concentration of automotive, engineering, high-tech and manufacturing companies that have been attracted to the area in recent years. With its employment and population boom poised to increase each year, a high demand for quality product will only continue to rise.” As this demand rises so will rents, according to Goodman, who noted that the lease-up process was recently completed for the one-year-old property, and rents in the community were already raised during the past few months in an effort to bring them closer to market rates. ![](https://www.passco.com/uploads/ckupload/images/Vinings_2.jpg)“This property is poised for continued rent growth, as current rents are lower than those of comparable properties in the region,” said Goodman. “This future rent growth, coupled with increasing demand for multifamily units in this area will continue to drive the property’s profitability in the coming decade, making it a sound investment for Passco’s clients.” Goodman continued, “Population growth in Greenville is expected to rise in coming years, with forecasts projecting an additional 57,810 new residents by 2017. Based on this ongoing influx of renters, there is enormous potential to build value for our investors.” He added, “Passco Companies continues to acquire properties such as Vinings at Laurel Creek, which are high-quality assets, but are not necessarily in gateway markets. Rather, we focus on identifying markets across the country that are situated in growing economic climates with positive future growth trajectories.” Goodman noted that this property was built to ensure a lasting quality product, constructed using only high-quality materials. ![](https://www.passco.com/uploads/ckupload/images/Vinings_3.jpg)Vinings at Laurel Creek features one-, two- and three-bedroom floor plans with nine-foot ceilings, breakfast bars, wood-style laminate flooring, walk-in closets, laundry rooms and other modern touches. The community also features modern amenities, with a beach-entry resort style pool, indoor-outdoor clubhouse, cyber café, dog park and fitness center. According to Goodman, Passco plans to hold the property for 7 to 10 years or until the market dictates, and will then sell the property to make a profit for its investors. Vinings at Laurel Creek is located at 3434 Laurens Road in the City of Greenville, S.C. **Categories:** Passco News --- ### [Passco Companies, LLC Forms Joint Venture with Insite Properties, LLC](https://www.passco.com/passco-companies-llc-forms-joint-venture-with-insite-properties-llc/) **Published:** August 19, 2014 **Author:** Synoptek Web Dev **Content:** Passco InSite, LLC, a joint venture between Passco Companies, LLC and Insite Properties, LLC, has acquired the 270-unitClass B garden-style multifamily community Ovation at Tempe. According to Bill Passo, CEO and Founder of Passco Companies, this new joint venture is an extension of a 20-year relationship with long-standing track record, market expertise and multifamily investment experience. According to Passo, investors will have the opportunity to invest in the Ovation at Tempe property through crowdfunding, as well as through the broker-dealer community. “This is a strong, value-add investment opportunity in a market that is in a proven recovery,” explained Passo. “The Tempe submarket posted positive absorption and a low 3.7 percent vacancy in the first quarter of 2014, and a 3.5 percent rental growth is forecasted by the end of the year.” In addition, Tempe’s market fundamentals are rebounding rapidly according to Passo, who noted that the state of Arizona is on track to rank first in the nation in future job growth, projecting a three percent rise annually over the next five years. “This projected job growth will drive deep demand for quality housing, which will bolster the profitability of this investment over our hold period,” he explained. The Passco Insite partnership plans to hold the property for three years. Under this ownership, value-add improvements will be implemented, which will drive rent growth for the asset, according to Passo. Planned renovations include upgrading unit interiors, constructing additional carports and enhancing the property’s exterior and community amenities. The property, which was originally built to condo specifications, is unique in its residential setting, according to Passo. “The community is situated against open space to the West and East, with no adjacent apartment communities,” he said. “In addition, this property has one of the lowest unit densities in Tempe at 16.5 units per acre. These factors, along with the community’s easy freeway access and close proximity to retail, recreation, employment and educational centers make it a highly desirable investment property.” Ovation at Tempe is located at 4502-4505 S. Hardy Drive in the city of Tempe, Arizona. The community features one- and two-bedroom apartment units, as well as separate casitas and townhomes situated on approximately 16 acres. Units range in size from 700 to 980 square feet and feature walk-in closets, private patios or balconies and stackable washers/dryers. Community amenities include a state-of-the-art fitness center, two swimming pools, two spas, tennis court, children’s playscape, picnic area with barbeque grills, and covered parking. **Categories:** Passco News --- ### [Passco Companies Invests More Than $135 Million in Raleigh-Durham Multifamily Market](https://www.passco.com/passco-companies-invests-more-than-135-million-in-raleigh-durham-multifamily-market/) **Published:** June 18, 2014 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC has acquired its fourth multifamily property in the Raleigh-Durham area of North Carolina. The company acquired the 324-unit The Columns at Wakefield apartment homes, bringing its total investment in the region’s multifamily market to $135 million in the past year. “The Research Triangle area encompassing the Raleigh-Durham-Chapel Hill markets continues to demonstrate its strength as an investment target, making this property exactly aligned with our ongoing Next X investment strategy,” said Larry Sullivan, President at Passco Companies. “The key is, rather than looking solely at top-performing markets over the past 10 years, we identify and invest in markets that we believe are likely to be top performers over the next 10 years.” Raleigh-Durham is poised to be a top performing market, according to Ogal Claspell, Vice President Realty Investments, who noted that local universities will drive renter growth among students and young professionals, while the area’s Research Triangle Park remains a catalyst for future population and job growth. “This is a market that already benefits from above average fundamentals,” explained Claspell. “As one of the largest research parks in the world, Research Triangle Park (RTP) employs more than 38,000 full time employees, and is expected to employ more than 100,000 in the coming years. In addition, median household income within three miles of The Columns at Wakefield apartment homes is currently $75,453, which is much higher than the national average.” Based on this data and the property’s location within the master-planned community of Wakefield Plantation (a 2,220 acre master-planned community surrounding a Tournament Players Club golf course), Passco expects the Class-A Columns at Wakefield property to attract strong rental demand throughout its anticipated 7 to 10 year hold. Gary Goodman, Senior Vice President Acquisitions at Passco Companies noted, “To maximize value and further drive renter demand for the property, we plan to complete the renovations that were begun by the previous owner.” These renovations will include individual unit upgrades, including the installation of vinyl wood plank flooring, ceiling fans, modern plumbing fixtures, track lighting and new microwaves. In addition, improvements will be made to the community’s shared amenities, including upgrades to the existing clubhouse, as well as the addition of a cyber-lounge and pet spa. Built in 2003, The Columns at Wakefield property features one-, two- and three-bedroom units, ranging in size from 587 to1425 square feet. Apartments feature French doors, vaulted ceilings with crown molding, breakfast bars, washer/dryer connections, walk-in closets and large patios or balconies. The gated community is within walking distance of shopping, dining, and entertainment. **Categories:** Passco News --- ### [From Luxury Theaters to the Full Entertainment Center](https://www.passco.com/from-luxury-theaters-to-the-full-entertainment-center/) **Published:** May 6, 2014 **Author:** Synoptek Web Dev **Content:** In 2005, Passco Companies acquired The Promenade at Howard Hughes Center in Los Angeles, and became one of the first retail owners in the U.S. to own a center with a luxury movie theater tenant. The theatre drew patrons not only from the local West Los Angeles market but also from long distances such as the Valley and Long Beach, who wanted to enjoy the new theatre experience of plush couches, upscale food, and premium movie-viewing. Howard Wong We recognized early on that the unique experience was the key to this high traffic. Based on that insight, we concluded that the best use for the center would be a transformation to a restaurant and entertainment complex. This transformation would complement the changing surrounding neighborhood of Silicon Beach, which consisted of a new, younger generation of professionals in the creative/high tech industries, who want unique entertainment experiences. In addition, we wanted to capture the high volume of consumers that were a result of nearby businesses and hotels, and give these consumers a destination location with multiple restaurants and entertainment venues all in one place. Today, that transformation is well underway. We have added new entertainment and restaurant tenants, including Dave & Busters and Buffalo Wild Wings to complement our existing restaurants such as Kabuki, Johnny Rockets and Islands. We are also actively seeking more entertainment/restaurant tenants such as comedy clubs, unique restaurants and brand experience stores, among others. Passco is also repositioning many of our other retail properties, bringing in new, experienced-based retailers and integrating elements such as valets, concierges and outdoor seating. We anticipate that the move toward entertainment-focused retail centers will continue to bring retail owners from luxury theatres to destination restaurants, and beyond. And we plan to continue to be an active part of that transition in the retail industry. ![](https://www.passco.com/uploads/ckupload/images/HOWARD%20WONG-18TU.jpg)*Howard Wong is a Director of Retail Leasing at Passco Companies in Irvine, Calif.* **Categories:** Passco News --- ### [Commercial Property Executive Executive Spotlight: Bill Passo, Passco Cos.](https://www.passco.com/commercial-property-executive-executive-spotlight-bill-passo-passco-cos/) **Published:** April 8, 2014 **Author:** Synoptek Web Dev **Content:** Nearly 40 years ago now, Bill Passo turned from law to real estate for an entirely practical reason: With four young daughters at home, he knew there were going to be lots of family-oriented expenses coming his way. “When I started practicing law, a new lawyer coming out of law school was making $700 a month. So it didn’t take much to make more than that,” said the founder & CEO of Passco Cos., an Irvine, Calif.-based real estate company with investment in the retail and multi-family sectors. The company also works on land entitlement and has done some development. Twenty years ago, Passo was a pioneer in tenancy-in-common (TIC) investments in the commercial real estate sector. The multi-owner/investor real estate holding approach is now mainstream. Having started his current firm focused on California-based retail properties 15 years ago, he moved into multi-family during the last decade, compiling a 10,000-unit Class A portfolio. Passco’s retail holdings total around 2.5 million square feet. In addition to TICs, Passco handles DST and LLC investments for clients. With his daughters’ progeny numbering 11, Passo speaks much like the kind of grandfather one would love to have—one filled with practical, friendly advice. **CPE: Your product focus shifted from retail to multi-family awhile back. Where is it now?** **Passo:** We’re now refocusing a bit on a return to retail. We see an opportunity to acquire properties that will meet our investors’ objectives, and are looking at locations that offer services and goods used by the local community. We focus on centers with food service, beauty, health—the sorts of things that are not acquired over the Internet. You’ll stop by and pick up your Subway sandwich or your Starbucks coffee while you drop off your dry cleaning. They’re convenient, neighborhood-type centers, as opposed to malls or big-box centers. We’re also still investing in multi-family. We’ll close on two properties (in December 2013) and another in January. **CPE: After 15 years at the Passco helm, what stands out?** **Passo:** We have survived—and I have personally survived—another recession. Passco Cos. has now been through one major recession and a minor one. We have outlasted some 70-plus competitors that were in the business in 2007 and are no longer in the business. We’re now probably the second-largest provider of investment product of our type in the country. I’m very proud of the fact that we have probably the best corporate infrastructure in terms of our investor services, our accounting and reporting to our investors, our timely provision of annual tax information and, of course, consistent performance in terms of cash flow and meeting investor objectives. In my 38 years in the business of providing investment opportunities, including the 15 years with Passco Cos., we have never had a lawsuit or arbitration. We credit that to our outstanding investor communication, our services and sound underwriting in the acquisition of property. Our underwriting standards are such that there have been many times when we just didn’t have anything we could offer to investors because we couldn’t find anything that made sense. **CPE: In addition to those attributes, what differentiates Passco as a company?** **Passo:** We’ve always been driven by the quality of the product, versus how easy is it to raise the money. We never allowed ourselves to become market driven. The broker/dealer community that brings us clients has a need to place their investment funds somewhere. But we’ve never just bought something so that we’d be in a position to take the money. We’ve always focused on making sure that what we bought made sense. If it happened to occur at a time that was appropriate for them, then fine, we were available. **CPE: Describe a moment when the company was tested and came out stronger.** **Passo:** In 2003, we were going to buy the Puente Hills Mall, which was going to cost $145 million. No one had ever done a TIC deal of that size before. We got to the point where, on the last day, before we had to make the decision yes or no, the entire net worth of the company and myself was at risk. We would have six weeks to raise $52 million to close this transaction, and we were going to have to get a $96 million loan. Ultimately, I individually made the commitment that “We will do this.” And we did. It made national news. **CPE: Describe yourself in five words.** **Passo:** I can do it in two. “I care.” **CPE: What advice would you give your younger self as you went into the business?** **Passo:** I probably would say two things: No. 1, seek out the people who are doing what you want to do and are doing it successfully, and learn from them. Second, there was a book I read halfway through my career that I wish I had read at the beginning, which was Napoleon Hill’s Think and Grow Rich. The principles in that book, I think, apply to whatever it is in life that you would like to achieve. **CPE: If you weren’t in real estate, what would you be doing?** **Passo:** I’d be a teacher. I’d like to help people learn how to accomplish their goals. I think I do that already as a mentor. It’s always been my goal to make everybody who has ever worked with me or for me better off for the experience. **CPE: How do you spend your free time?** **Passo:** Actively. I ski, golf, scuba. My wife and I like to travel. We’re looking at traveling a lot more, and have trips to China and South America planned for 2014. I believe in that saying: I just want to live until I die. **CPE: What’s next for you and Passco?** **Passo:** I think we will see 2014 as perhaps the most successful year that the company has had. We’re becoming more brawny. We will continue to take advantage of some acquisition opportunities. We’re expanding our opportunities in value-added multi-family and retail, as well as the land development business. We have a full plate for 2014. **Categories:** Passco News --- ### [Passco Acquires Third Raleigh-Durham Multifamily Property in Nine Months](https://www.passco.com/passco-acquires-third-raleigh-durham-multifamily-property-in-nine-months/) **Published:** March 27, 2014 **Author:** Synoptek Web Dev **Content:** In keeping with its ongoing strategy to acquire high quality, core multifamily assets in high-growth areas outside of primary markets, Passco Companies, LLC has acquired its third Class A multifamily community in Raleigh-Durham in the past nine months. The firm acquired Carrington at Brier Creek, a 270-unit luxury garden-style multifamily property in Raleigh, N.C., according to Gary Goodman, Senior Vice President, Acquisitions of Passco Companies, LLC. “Our investment strategy is focused on identifying markets that are poised for growth, and Raleigh-Durham is certainly in that category,” explains Goodman. Built in 2004 and located adjacent to the Brier Creek Country Club, Carrington at Brier Creek is the only apartment property within the master-planned community of Brier Creek. The community is situated near three major universities, and less than five miles from Research Triangle Park, the area’s largest job supplier and one of the leading centers for high-technology research and development in the country. “One of the elements we consider when identifying our investment markets is how pro-business an area may be,” explains Goodman. “Raleigh-Durham, and especially Research Triangle Park, has emerged as an extremely pro-business market.” Goodman notes that technology and medical companies are currently moving to Raleigh based on local universities’ outstanding education and research facilities; while governmental, educational and healthcare industries continue to thrive here, as well. “These sectors are some of the most recession-proof in the nation, adding to the stability of this job market,” Goodman notes. “In addition, the projected momentum of Research Triangle Park further strengthens the market’s investment potential.” According to Goodman, Research Triangle Park’s long-term goal is to employ over 100,000 people. The area boasts the second highest rate of net in-migration of any U.S. metropolitan area over the past five years, and the City of Raleigh’s employment growth is expected to significantly outpace the nation over the near term. “This exponential job growth is anticipated to continue over the next five to ten years, resulting in intensive demand for quality housing such as Carrington at Brier Creek,” Goodman says. Carrington at Brier Creek Apartments is situated on approximately 21 acres, and offers one-, two- and three-bedroom units across 12 separate buildings. According to Goodman, Passco Companies will implement various improvements to the property, including the addition of unique amenities such as a cyber-lounge and pet spa, as well the creation of an upgraded fitness center and model unit. “This property is already in excellent condition, and the improvements we plan to implement will only further enhance the property, ensuring that our community remains quite competitive in this growing market,” Goodman explains. This acquisition marks Passco’s third multifamily acquisition in the Raleigh-Durham area over the past nine months, totaling $96.3 million. In July of 2013, Passco Companies acquired the 280-unit multifamily community Encore at the Park in Durham, North Carolina for $28 million. Later, in December 2013, the company acquired Wakefield Glen Apartments, a 246-unit luxury Class-A multifamily community in Raleigh, North Carolina, for $31 million. **Categories:** Passco News --- ### [Are the Bulls Still Running the Market?](https://www.passco.com/are-the-bulls-still-running-the-market/) **Published:** March 20, 2014 **Author:** Synoptek Web Dev **Content:** In 2010, a trio of executives from Marcus & Millichap Real Estate Investment Services Inc. delivered a special presentation, “US Economic, Capital Markets and Apartment Market Overview and Outlook,” in which they said that the multifamily industry was heading for its next bull run. Zeroing in on the investment market for multifamily was Linwood Thompson, senior vice president of Marcus & Millichap and director of its National Multi Housing Group, who said that the market was divided into two camps: those who believe in the inherent long term investment value of apartments, and those who believe in the short-term transactional value (i.e. the bulls). He noted that the ranks of the former were rising while the latter group was decreasing. So the million-dollar question today is: Are the bulls still running the multifamily market? According to Los Angeles-based Gary Tenzer, principal and managing director of George Smith Partners, multifamily was a significant portion of his firm’s financing business last year. And he predicts that 2014 will bring a similar deal volume in the sector. “As capital availability and rates continue to strengthen, we anticipate that the multifamily market will continue to demonstrate strength.” Irvine, CA-based Passco Cos. LLC’s Gary Goodman says the bulls still control the market by bidding up prices to historically high levels. However, the SVP says that in many cases, they overpay for properties that in a more normal market would not command those high prices. “This overbidding is prevalent in the value-add sector of the market, which generally accounts for 75% to 80% of today’s multifamily acquisitions,” he tells Real Estate Forum. “Many investors and sponsors are focused on acquisitions that will produce a large gain in the residual value of a property, as opposed to cash flow generated throughout the holding period.” Specifically, he says, many buyers are paying sellers for the upside value before it is added by the new owner. “This is particularly obvious in the primary or gateway markets where investor interest is the most competitive.” Much of the overbidding that Goodman sees in primary markets is taking place on older multifamily assets in original condition. Many investors and sponsors, he says, would prefer to acquire an original property as opposed to one that has undergone some renovations because the more original the property, the more opportunity there is to improve it to enhance its residual value. “In short, the bulls pay more for properties in worse condition,” says Goodman. That approach, he says, is risky because the planned profit of a value-add deal is typically based on a dramatic increase in rents – which may or may not be achievable.” If all goes as planned, he says the returns can be high. However, if the projected rent growth is unattainable, the investor can be stuck with an older property that requires a great deal of capital just to maintain. Goodman adds, “Much like the risk of development projects, if the market takes a sudden change due to an increase in interest rates or other unforseen factors, the sponsor/investor may not be able to sell the property for a profit and, in many cases, as we saw in the recent recession, will have to sell it for a loss or lose it to a lender.” Scott Chaplan, executive chair of L.A.-based Urban Group of Cos. points out that the multifamily sector remains on fire. “A fund we manage acquired a multifamily building in Los Angeles approximately a year ago for $300,000 less than we sold it for a few years before. We are contemplating listing the property for sale at $400,000 more than our recent purchase price,” he tells Forum. “While we performed standard upgrades, strong economic indicators, asset-allocation strategies for high net worth and institutional investors, tax-advantaged structures, low vacancies and of course, historically low cost of funds continue to drive the prices up; 2014 will see continued growth in this sector.” There remains an abundance of capital in the market, Chaplan adds. “By way of example, funds like those managed by Blackstone have invested several billion dollars in the Southern California distressed residential market,” he says. “Our opportunity funds have shifted to higher-end product to enjoy decreased competition, similar margins and higher absolute dollar returns.” Like all industries, real estate will always house a vibrant market sector, explains Chaplan. “The predicates like location, product type, financial architecture and structure will always evolve.” JLL capital markets international director Jubeen Vaghefi tells Forum that there is still a plentiful supply of equity capital pursuing a meager supply of investment opportunities. “On the hells of the economic recovery, there’s not enough multifamily product to satisfy demand,” says Vaghefi. “Investors are going outside of the core markets, following yield as prices hit peak levels.” According to Vaghefi, “We are absolutely back to peak pricing, and, in some markets, surpassing peaks. While dollars continue to flow into other asset classes, multifamily is still the belle of the ball and will continue to be such for the forseeable future.” And according to a special research report on the CRE Investment Outlook from Marcus & Millichap, apartments garner the most favorable sentiment, both in terms of value creation and whether now is the time to buy more. Apartments have already recorded significant rent growth over the past three years, and even with the pipeline of new construction growing, there appears to be a good balance between supply and demand in most markets. “Investors feel pretty comfortable that rent growth will continue in apartments, even if that growth occurs at a slower pace,” says John Sebree, national director of the national multihousing group at the firm. **NOT ALL ARE CREATED EQUAL** Prices in “certain markets” have been pushed up to high levels, notes Paul Keller, founding principal and CEO of Mack Urban. “The capital market remains very efficient; locations with solidy progressive job growth, quality assets, along with historic low capital costs see high values.” But not all locations are alike. According to Keller, the “running” up of prices is more like a “walk,” except in markets such as New York City, San Francisco and Seattle. “We cannot forget to look at job quality and not just formation,” points out Keller. “Good jobs must be accumulative to an economy (not a drag on an economy).” TruAmerica Multifamily, for example, is eyeing apartment properties for acquisition in two strong Western markets: Seattle and the Silicon Valley, Bob Hart, founder, president and CEO of the firm, recently told sister publication GlobeSt.com. The company is focusing on markets that have strong workforce housing potential. The Los Angeles-based real estate investment firm recently acquired Arcadia Luxury Townhomes, a 309-unit apartment complex in Federal Way, WA (a Seattle submarket), for $54 million from a firm Hart now identifies as Cornerstone Advisors/Legacy Partners. The acquisition follows the buyer’s recent $38.3 million purchase of the Vineyards in Gilroy, CA. “Federal Way is a very good market for workforce housing,” Hart told GlobeSt.com. “There’s not a lot of new construction there, but there’s strong demand, and there’s good proximity to jobs in Seattle. It’s 30 minutes from the major metro part of Seattle, there are rapid bus lines and freeways and good-quality affordable housing \[is needed there\].” In the past, Federal Way was a strong area for multifamily, particularly in the Campus Drive area, Hart added. The region brings in a nice, steady flow of renters, and when he was CEO of Kennedy Wilson, the firm owned many properties there. Now, TruAmerica is buying two other assets in this market: a 190-unit multifamily called Westhaven and another called Holland, both in West Seattle. Holland will require moderate rehab and is more urban, located closer to the Seattle CBD than the other properties TruAmerica has purchased recently. “We like that area,” says Hart. “It’s growing and an urban-renewal area.” Other areas of multifamily investment interest on TruAmerica’s horizon are Denver and San Diego. “It’s all about jobs and transportation-centric right now, as well as affordable rents. We focus on class-B and workforce housing, and we look for areas where we can make improvements and still grow rents.” One emerging phenomenon about apartment location is that there has been a shift in perception: former secondary markets are now being viewed as primary, according to GSP’s Tenzer. “For example, Seattle, which was once considered a secondary market, is now seen as major gateway city. Other examples include Atlanta, San Antonion and Phoenix. Today, these ‘newly classified’ primary markets are garnering much of the same attention from big players as traditional major markets.” Still, certain markets always seem to land on their feet. Urban Group’s Chaplan says that Northern California continues to boom, driven in part by the robust direct and indirect jobs created in the tech sector and the infill density. Similarly, the Pacific Northwest, he says, where his firm recently closed a transaction, remains a seller’s market with no end in sight. The Central Coast of California, another strong investment area, has seen a resurgence in all product types from land and single family residential to apartments and commercial, he says. Also, according to a recent San Francisco multifamily repot from Marcus & Millichap, investors remain keen on the San Francisco apartment market, which resulted in an 8% rise in trasaction velocity during the past 12 months. The largest jump occured in the class-B segment where deal flow increased by more than 75%. According to the report, the median sales price rose 16% during the period to $250,000 per unit as intense buyer demand pushed up valuations. Mid-tier apartments transacted at a median a sale price of $229,700 per unit. And over in New Jersey, as GlobeSt.com reported, it was an especially crisp fall for multifamily building sales in northern New Jersey according to Gebroe-Hammer Assoc., which closed a record 27 sales totaling $135.85 million in October and November. “The volume is indicative of how attractive multifamily investment properties are, with demand currently at a peak,” says Ken Uranowitz, president. According to a recent *Emerging Trends in Real Estate 2014* report from ULI and PWC, Austin, and Dallas/Fort Worth remain markets to watch in 2014. According to the report, “The Dallas/Fort Worth economy will continue to benefit from high concentrations of technology, corporate headquarters operations, excellent distribution infrastructure, and above-average population gains. Dallas/Fort Worth remains attractive to employers and employees alike due to its highly competitive cost of living and doing business.” **EMPLOYMENT REMAINS ESSENTIAL** On the West Coast, the bulls are still running in both L.A. and Orange counties, says Bernards SVP Dave Cavecche. “There is evidence of this in that Orange County’s unemployment has drastically fallen to the lowest unemployment the county has seen since the start of the recession in 2008,” he says. “Los Angeles County is not far behind and added 67,000 jobs last year.” As a consequence, he adds, “developers are moving full speed ahead with the multifamily mania activity with no slowdown in the foreseeable future.” Rebounding markets provide new opportunity, according to Tenzer. He says that markets such as Las Vegas and Phoenix, which were hit particularly hard during the recession, are now steadily rebounding, especially as employment also rebounds. “While primary markets become increasingly crowded, some large multifamily investors are beginning to look to these markets for the next big opportunity.” But Tenzer stresses that employment remains essential. “Markets that are not doing well often have one factor in common: employment. Employment has always been, and will continue to be, a fundamental driver in real estate. Without strong employment, the demand for real estate, especially housing, will be simply nonexistent.” **Categories:** Passco News --- ### [Multifamily Investments on the Rise for 2014](https://www.passco.com/multifamily-investments-on-the-rise-for-2014/) **Published:** February 12, 2014 **Author:** Synoptek Web Dev **Content:** Multifamily has been the darling of investors for a little while now – but will this winning streak continue, or is another asset type poised to take its place? *WREB* talked to some of the West’s top multifamily experts to find out. **Is there still a lot of potential for investors to buy value-add multifamily properties?** **Goodman:** This is an interesting question, specifically because the value-add qualifier has been defined in many different ways over the past five to seven years. The fact is, a true value-add deal is one in which an investor applies significant capital expenditures to a property in order to raise rents substantially. These true value-add opportunities tend to be more successful when the economy is on fire and rents are increasing dramatically. In today’s market, however, job growth is not yet strong enough to support major rent increases. The rental demand remains somewhat inelastic, with many residents still concerned about job security. The dirty little secret regarding value added ventures is that most of the profit on these renovations is made when the market is frothy and there is cap rate compression. For example, investors are purchasing at a 6 cap and selling at a 5 cap. This was the case before the Great Recession. However now, with cap rates at historic lows and the expectation of higher interest rates in the future, the value-added proposition becomes much riskier. The key in today’s market is to work with someone who understands where the opportunities are with regard to cap rates and future rent growth expectations, as opposed to relying on the blanket value-add scenario. **How is the multifamily industry faring in the primary markets near you? How about in the secondary/tertiary markets?** **Goodman:** Contrary to popular belief, there currently is more risk for investors in primary markets than in secondary/tertiary markets. It remains easier to attract financing for multifamily development in primary markets. As a result, there is some concern of overbuilding in these markets, which would affect market fundamentals and ultimately lower yields, resulting in increased risk for investors. Many investors are already finding more attractive yields in secondary or tertiary markets than in primary areas as a result of lower pricing. **Are you seeing more activity in multifamily development or redevelopment nowadays? Why?** **Goodman:** Yes, we are seeing an increasing interest in multifamily development. Developers believe that rental demand will accelerate with an improving economy and, because there was so little new construction from 2008 to 2012, there will be a growing supply/demand imbalance, at least in the near term. Right after the Great Recession, most of the available entitled land was quickly acquired by developers. Developers call this the “low hanging fruit.” In the last two years, it’s become evident that what remains are sites that are unentitled, and consequently will take longer to develop. In addition, costs including labor and material have gone up significantly, making it difficult for developments to pencil. This fact, coupled with recourse financing and significant equity requirements for new development, continue to make it very difficult to being new multifamily. On the redevelopment side, activity is tepid at best. There is some redevelopment happening where investors see an opportunity to add value and raise rents, but these opportunities are few and far between. From an investment perspective, redevelopment or value-added ventures focus more on the profit upon sale and often do not produce significant cash flow during the holding period. Passco maintains a long-term strategy of purchasing Class A or newer properties that produce cash flow during the holding period, with less emphasis on the profit upon sale. Our investors prefer known cash flow to speculative profits. **What will the lending environment be like for multifamily investors in 2014?** **Goodman:** Financing is likely to remain unchanged in 2014, specifically with regard to the acquisition of existing properties. While there is some pending legislation being reviewed by Congressional committees that might affect Fannie Mae and Freddie Mac, with many other major issues facing Congress, it is not likely that these changes would occur in 2014. In addition, life insurance companies and CMBS lenders are providing more debt to investors, so multifamily investors are continually seeing more options for financing. **What are the biggest challenges you believe multifamily investors face today?** **Goodman:** Today’s primary challenge is competition from other buyers, due to the ongoing enormous interest in multifamily product. As a result, investors must be able to move extremely quickly through due diligence and financing in order to complete acquisitions. For example, Passco recently acquired Vue21, a 332-unit, Class A multifamily community in Colorado Springs, Colo., for $54 million. We successfully closed on the acquisition in less than 45 days. This is an extremely limited time to complete due diligence and finalize all debt, but we understand how essential it is to effectively compete by closing quickly, so we have streamlined our processes to enable us to do so. **Which would you say is more popular nowadays among investors, Class A, or Class B and C properties?** **Goodman:** With so much demand for multifamily product in today’s market, there are truly investors for each property class. The fact is, for multifamily, one class is not necessarily more popular than another at the moment. However, based on the fact that there was almost no Class A multifamily development for a number of years during and after the recent recession, it’s likely that investor demand for Class A product will continue to be strong. Currently, the majority of multifamily product on the market is Class B based simply on age. As the development pipeline improves, we will see an increase in the supply of Class A properties available for purchase. **Which types of investors are interested in Class A properties, and which types are interested in B/C?** **Goodman:** Class A product appeals to more conservative investors. These investors are focused on capital preservation, and typically include buyers such as pension funds, real estate investment trusts, and other sponsors. Class B product is riskier, and appeals to investors who often do not want to hold long term, since significant capital improvements will be necessary to maintain the property as it ages. These properties are typically held for only four to five years, during which an owner will rehab the asset and plan for significant rent increases. These investments can be somewhat risky given the unpredictable debt market. If interest rates increase significantly, values will be affected and may not allow investors to exit their ventures with any profit, or worse yet, a return of their original investment. Finally, Class C product appeals to owners with very strong property management. In fact, there are some investors who invest only in Class C properties. These properties are usually older and more difficult to finance. **What is the one piece of advice you’d give to someone looking to invest in multifamily this year?** **Goodman:** My advice is to partner with someone who knows what they’re doing. Multifamily investment is not for the novice. Investors must have a strong background in analyzing multifamily properties in order to understand how they will perform over time. For multifamily acquisitions, solid underwriting assumptions and analysis are key. They require sophisticated due diligence with many variables that must be considered that will affect the long-term profitability of a multifamily asset. An investor who is investing in multifamily for the first time, or one with limited exposure to how multifamily properties perform, should partner with a firm that has successfully maneuvered multifamily markets over time. All risks aside, multifamily has emerged as the best of any product type for investment in the current market, and we believe that this demand is likely to continue. Investors who select the right partners and invest in the right markets are likely to achieve high returns. **Categories:** Passco News --- ### [Passco Seeks Core in Secondary Markets](https://www.passco.com/passco-seeks-core-in-secondary-markets/) **Published:** February 3, 2014 **Author:** Synoptek Web Dev **Content:** GlobeSt.com recently chatted with Gary Goodman, SVP of acquisitions at Passco Cos. on multifamily and whether or not the bulls still control the market, a topic also soon to be featured in the February/March issue of Real Estate Forum. Goodman also discussed value-add as well as Passco’s focus on core assets in secondary markets and the reasons why. **GlobeSt.com: Do the bulls still control the multifamily market?** **Gary Goodman:** Yes, the bulls still control the market by bidding up prices to historically high levels. However, we believe that in many cases they overpay for properties that would not command these high prices in a more normal market. **GlobeSt.com: Where is this overbidding prevalent?** **Goodman:** This overbidding is prevalent in the value-add sector of the market, which generally accounts for 75 to 80% of today’s multifamily acquisitions. Many investors and sponsors are focused on acquisitions that will produce a large gain in the residual value of a property, as opposed to cash flow generated throughout the holding period. Specifically, many buyers are paying sellers for the upside value before it is added by the new owner. This is particularly obvious in the primary or gateway markets where investor interest is the most competitive. Much of the overbidding we’re seeing in primary markets is taking place on older multifamily assets in original condition. Many investors and sponsors would prefer to acquire an original property, as opposed to one that has undergone some renovations, because the more original the property, the more opportunity there is to improve the property to enhance its residual value. In short, we’re seeing the bulls pay more for properties in worse condition. **GlobeSt.com: Do you see that as a risky approach? If so, why?** **Goodman:** This approach is risky, however, because the planned profit of a value-add deal is typically based on a dramatic increase in rents – which may or may not be achievable. If all goes as planned, the returns can be high. However, if the projected rent growth is unattainable, the investor can be stuck with an older property that requires a great deal of capital just to maintain. Also, much like the risk of development projects, if the market takes a sudden change due to an increase in interest rates or other unforeseen factors, the sponsor/investor may not be able sell the property for a profit and in many cases, as we saw in the recent recession, will have to sell the property for a loss or lose it to a lender. **GlobeSt.com: What about Passco Cos.’ strategy? Where are you seeking assets and why?** **Goodman:** At Passco Cos., our strategy is to seek core assets in secondary markets where risk adjusted yields are the highest. Simply put, we are cash flow buyers. From our perspective, when buying a core property, what you see is what you get. **GlobeSt.com: Are you seeing that strategy work? It must be…** **Goodman:** This strategy is working extremely well for us. We are identifying high-quality properties that are typically some of the best in their respective markets, and we’re able to achieve relatively high cash-on-cash yields from the very beginning of the holding period. Some examples of our recent acquisitions that are aligned with this strategy include Vue21 in Colorado Springs and Wakefield Glen Apartments in Raleigh. Basically, we’re buying properties that are already producing solid cash flows. This factor is what makes our risk adjusted returns superior to the acquisitions of many sponsors who depend on the ultimate sale of the property for profit. We continue to seek high-quality, core multifamily assets in secondary markets throughout the country, including Greenville, SC; Raleigh-Durham, NC; Savannah, GA; Colorado Springs and Denver, CO; Oklahoma City, OK, Nashville, TN; Columbus, OH; and suburban markets surrounding San Antonio, Dallas and Houston, Texas, among others. *GlobeSt.com [recently detailed](http://www.globest.com/news/12_754/charlotte/multifamily/Passco-on-the-Hunt-for-Raleigh-Multifamily-340707.html) the firm’s hunt for multifamily property in Raleigh. And as we also previously reported, Passco is also now focused on [land acquisitions](http://www.globest.com/news/12_730/orangecounty/employment/Passco-Renews-Focus-On-Land-Development-339463.html)—at least in California. “The opportunity to create value by acquiring raw land and pursuing entitlements has returned,” said CEO Bill Passo. “We expect land development to be an extremely active sector of the real estate market for the next three to five years.* **Categories:** Passco News --- ### [Passco Companies Acquires 246-Unit Multifamily Community in Raleigh, NC](https://www.passco.com/passco-companies-acquires-246-unit-multifamily-community-in-raleigh-nc/) **Published:** December 11, 2013 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC, has acquired Wakefield Glen Apartments, a 246-unit luxury Class A multifamily community located in Raleigh, North Carolina, according to Gary Goodman, Senior Vice President, Acquisitions of Passco Companies, LLC. The company closed on the Wakefield Glen acquisition in only 45 days. “Wakefield Glen demonstrates deep potential for growth and stability, making it well-aligned with Passco’s ongoing strategy to acquire high quality, core multifamily assets in secondary markets,” said Goodman. The property’s potential stems from strong economic fundamentals in the Raleigh-Durham market, as well as its Class A condition and specific location within a highly desirable master planned community, according to Goodman. Wakefield Glen Apartments is located in the 2,200 acre Wakefield Plantation master planned community, which consists of hundreds of single family homes, apartment units and townhouses, as well as several schools, a retail shopping center and a Tournament Players Club (TPC) golf course. “Wakefield Glen is Passco’s second multifamily acquisition this year in the Raleigh-Durham area, and we are actively seeking additional investment opportunities in this market,” noted Goodman. “As one of the top markets in the country for future job and economic growth, Raleigh continues to demonstrate strong potential for rental growth and long term profit.” According to Goodman, the Raleigh-Durham market has rapidly expanded in recent years, and projections indicate that Raleigh’s employment growth numbers will exceed the national employment growth in each of the next four years. “The catalyst for this projected employment growth is Research Triangle Park, a local economic and employment driver,” explained Goodman. Research Triangle Park, which houses more than 170 companies and employs over 38,000 full-time employees, is located 20 minutes from Wakefield Glen Apartments. Wakefield Glen is also located near three major universities, The University of North Carolina, North Carolina State University, and Duke University. “The close proximity of universities and employment will continue to fuel demand for quality rental housing,” explained Goodman. “As this activity continues, we expect that the asset will continue to perform well over time.” Built in 2001, Wakefield Glen Apartments consists of one-, two- and three-bedroom floor plans with nine-foot ceilings, crown molding, and luxury finishes. The community features a variety of amenities, including a resort-style pool, clubhouse, fitness center, community business center, playground and car care center. According to Goodman, in addition to stabilizing occupancy and correcting deferred maintenance, Passco plans to bring in professional property management, using a national firm. Passco will also offer residents a number of upgrades including installing vinyl wood plank flooring in all first floor units, as well as other interior upgrades such as new appliances and countertops in many units, new cabinets, ceiling fans, kitchen and bathroom fixtures, two inch faux wood blinds, and curved shower rods. “Our market research indicates that residents in this location are interested in high-end unit finishes and will pay additional rent to obtain them,” adds Goodman. **Categories:** Passco News --- ### [Passco Companies Completes Acquisition in Colorado Springs](https://www.passco.com/passco-companies-completes-acquisition-in-colorado-springs/) **Published:** December 2, 2013 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC., a privately held Calif.-based real estate company that specializes in the investment, acquisition, development and management of commercial properties throughout the U.S., has completed the acquisition of “Vue21,” formerly known as Alexan at Briargate, a 332-unit Class A multifamily community located in Colorado Springs, Colo., according to Gary Goodman, Senior Vice President, Acquisitions of Passco Companies, LLC. “Multifamily has been a hot product over the last few years and has provided lucrative opportunities for investors,” explained Goodman. “At this time, it is much more challenging to identify strong investment opportunities in this sector. However, Vue21 will provide our company with a solid asset to add to our already strong portfolio of multifamily investments.” ![](https://www.passco.com/uploads/ckupload/images/vue21_1.jpg) According to Goodman, Vue21 is the right product in an especially prime location in an especially strong economic and populous market. “Vue21 is particularly well located within the Powers Boulevard Corridor, the fast growing part of Colorado Springs, which itself is one of the fastest growing cities in the U.S.,” Goodman added. “Its location within the renown Academic District 20 allows residents to take advantage of the best schools in the city as well.” To maximize the potential of this investment, Passco Companies will elevate the property’s status in the market by repositioning the property through upgrading the units to enhance the modern, luxury apartment community that appeals to the area’s upscale renters. ![](https://www.passco.com/uploads/ckupload/images/vue21_2.jpg) “Continuing renter demand will be generated by its location within the area’s largest concentration of office space, totaling over 10 million square feet. This office space is home to national tenants such as USAA, T-Mobile, Focus on the Family, Oracle and Lockheed Martin, providing thousands of jobs to area residents,” he explained. Additional renter demand is supplied by the area’s large concentration of military and defense-related employers, healthcare firms, and the 11 nearby colleges and universities. ![](https://www.passco.com/uploads/ckupload/images/vue21_3.jpg) Vue21 is a luxury apartment community built in 2009 within the Cordera master-planned community and is considered by many to be the finest community in the city. The property is situated on 11 acres, and offers one- two- and three-bedroom floor plans with a modern urban design, mountain views and spacious open floor plans. Vue21 brings Passco’s multifamily portfolio to 33 properties and over 10,000 units, located in 14 states throughout the United States. **Categories:** Passco News --- ### [Economics of Retail Real Estate Improving](https://www.passco.com/economics-of-retail-real-estate-improving/) **Published:** November 10, 2013 **Author:** Synoptek Web Dev **Content:** Capacity rates are beginning to look attractive again for investors focused on cash flow. After several years during which multifamily real estate was a popular investment as increased demand drove up the cost of available properties, it’s time for a change in real estate investment. Today the commercial real estate industry is abuzz with whispers of the resurgence of retail. The primary query: Is retail the next big thing? Our answer: It is a big thing — but not the only thing. From an investment standpoint, retail capacity rates are beginning to look attractive for investors focused on cash flow, and the opportunity for rent growth is increasing. In short, the economics of retail are improving. Many retail properties in the current market are in a prime position for acquisition. During the recession, retail rents, which had been written at higher rates, were lowered so owners could maintain occupancy levels. This presents an opportunity for investors to acquire properties now and steadily increase rents to achieve higher cash flow. What does this mean for advisers? For those who are aware of this movement, it means there is now an opportunity to offer their clients some diversification among real estate property types, with retail and multifamily rounding out a more structured portfolio. By including retail, advisers will enhance their clients’ overall portfolio returns and achieve higher yields in the short run, and long-term capital gains. As the focus turns to retail, a new, product-specific question will arise: Which retail acquisitions make the best investments? The answer is potentially surprising: partially stabilized assets. The strongest investments in today’s retail market are neighborhood shopping centers with a stable tenant base and some vacancy that can be leased in a relatively short period of time with professional, qualified management, and leasing expertise and contacts. In particular, shopping centers with a strong combination of retailers including beauty, service and food can be a focus. These services are not threatened by Internet sales and are always in demand from consumers. As a result, these retail investments provide steady cash flow and an opportunity to sustain and add value over time. It is important to note, however, that even amid the growing opportunity for increased value and strong yields, retail investments continue to be potentially volatile, and investors should tread carefully when selecting properties in which to invest. For individual investors, the process of identifying, vetting and acquiring the right retail centers may seem unapproachable, especially with so many heavy-hitting commercial investors already in play. To combat this competition, advisers should steer their clients toward opportunities that allow them to take part in retail ownership while partnering with an experienced operator. Overall, savvy investors should be looking toward retail as the next wave of commercial investment. Advisers who are in the know will educate themselves about the opportunities in the market and pursue them now, as potential yields are quite strong. *Bill Passo is the founder and chief executive of Passco Cos.* **Categories:** Passco News --- ### [Passco Renews Focus on Land Development](https://www.passco.com/passco-renews-focus-on-land-development/) **Published:** November 8, 2013 **Author:** Synoptek Web Dev **Content:** Passco Cos. has demonstrated its renewed focus on land development by hiring industry veteran Scott Allen as president of Passco Cos. Development LLC. According to Bill Passo, CEO and founder of Passco Cos., Allen will be actively pursuing land acquisition in Southern California, targeting available land at purchase prices between $1 million and $20 million. Passo adds that Allen will spearhead land-acquisition efforts for the firm and drive new land projects forward. He will also oversee all of the development firm’s current land holdings and will manage future land sales. “The opportunity to create value by acquiring raw land and pursuing entitlements has returned,” says Passo. “We expect land development to be an extremely active sector of the real estate market for the next three to five years. He adds that the firm recognizes that the market is shifting once again. “By renewing our focus on land development now, we will be at the forefront of the next market cycle, allowing us to create substantial value for our investors.” Allen was most recently with Tava Development Co., where he served as president. In this role, he oversaw all business operations for the company, which developed land for the homebuilding industry and invested in residential and industrial real estate. Prior to his tenure with Tava, Allen served as division president of the Southern California division of Meritage Homes, formerly Citation Homes. Allen tells GlobeSt.com that now is a good time to buy land for development in Southern California because, as the economy continues to recover, his firm sees opportunities for more growth, particularly in residential development. “Since there hasn’t been much activity for new entitlements over the last five to seven years, we should now see a demand for newly entitled land as well.” He adds that Passco is focusing primarily on the Inland Empire market, as well as for-sale residential land throughout Southern California. “We will be searching for new properties that are in the path of development. We’re hopeful to have three to five properties under contract by the end of 2014 and then to continue that growth moving forward.” As GlobeSt.com reported in September, Passo told us in a [video interview](http://www.globest.com/videos/event_coverage/west/Bricks-and-Mortars-Must-Entertain-338120.html) at the ICSC Western Division Conference in San Diego that to gain an edge over e-commerce, stores need to offer experiences that consumers can’t get from the Internet. *This article was originally published on [GlobeSt.com](http://www.globest.com/news/12_730/orangecounty/employment/Passco-Renews-Focus-On-Land-Development-339463.html).* **Categories:** Passco News --- ### [Dave & Busters and Buffalo Wild Wings Now at The Promenade at Howard Hughes](https://www.passco.com/dave-busters-and-buffalo-wild-wings-now-at-the-promenade-at-howard-hughes/) **Published:** October 29, 2013 **Author:** Synoptek Web Dev **Content:** Patrons in Los Angeles’ Westside seeking a combination of food and entertainment won’t have to look beyond their own neighborhood for much longer. The Promenade at Howard Hughes Center has announced the addition of two new entertainment-focused restaurants, Dave & Buster’s and Buffalo Wild Wings. Both restaurants are currently under construction, according to Belinda Jacobs, General Manager at The Promenade at Howard Hughes Center, who noted that Buffalo Wild Wings is set to open November 25, 2013, while Dave & Buster’s will debut in January 2014. “These are exciting restaurants which will give our guests the opportunity to dine, play and be entertained any day of the week,” said Jacobs. The timing of these two new additions is purposeful, according to Jacobs, who explained that The Promenade at Howard Hughes Center is undergoing a positive change in focus. “The owner of the shopping center, Passco Companies, is in the process of shifting the focus of the center, positioning it as an entertainment hub for the area,” said Jacobs. “This is exciting news for local community members and tourists alike, as they will no longer have to travel outside of the Westside neighborhood to find entertainment options for themselves and their families.” The new Dave & Buster’s will be one of the largest in the country, totaling over 40,207 square feet of entertainment and dining space. Known for its interactive, family-friendly atmosphere, which combines food, drinks and entertainment, Dave & Buster’s is well-loved for its arcade, which features hundreds of classic and new video games. In addition, the restaurant’s menu features special items such as Spinach Dip, Peppercorn New York Strip, Dave’s™ Double Cheeseburger, Roasted Turkey Avocado BLT, and Parmesan-Crusted Chicken Caesar Salad. Along with its full restaurant menu, Dave & Buster’s also features a full bar with happy hour offerings, as well as signature cocktails, beer and wine. The bar is also host to nonstop sports viewing – televisions are set up throughout the bar area so guests never miss a game. The new Buffalo Wild Wings at The Promenade at Howard Hughes Center will feature a full-service restaurant and sports bar focused on Buffalo wings, beer and live sports – the perfect trifecta for any sports lover. The restaurant offers a variety of menu options, with a focus on Buffalo Wings, including both boneless and traditional wings in more than 20 different flavors. In addition, the restaurant offers appetizers, burgers, sandwiches, salads and a kid’s menu for guests to enjoy. Each Buffalo Wild Wings features 30 or more flat screen televisions broadcasting every type of sporting event, from football, baseball and basketball to hockey and mixed martial arts. Buffalo Wild Wings also features a full bar with signature drinks and specialty cocktails, along with a wide variety of domestic, import, craft and specialty beers. The Promenade at Howard Hughes Center currently offers guests a luxury movie theatre, Cinemark theatres, along with several dining options, such as Islands Fine Burgers and Drinks, Johnny Rockets, Kabuki Japanese Restaurant and Rubio’s Fresh Mexican Grill. *The Promenade at Howard Hughes Center is located at 6081 Center Drive in Los Angeles, Calif. More information is available at [www.hhpromenade.com](http://www.hhpromenade.com/).* **Categories:** Passco News --- ### [Scott Allen Hired as New President of Passco Development](https://www.passco.com/scott-allen-hired-as-new-president-of-passco-development/) **Published:** October 21, 2013 **Author:** Synoptek Web Dev **Content:** **Industry veteran Scott Allen joins the firm as new President of Passco Development** A renewed focus on land development has been announced by Passco Companies, LLC., a privately held Calif.-based commercial real estate company. The company has hired real estate industry veteran Scott Allen as its new President of Passco Companies Development, LLC. “The opportunity to create value by acquiring raw land and pursuing entitlements has returned,” says Bill Passo, President of Passco Companies. “We expect land development to be an extremely active sector of the real estate market for the next three to five years.” Passo notes that Passco Companies will be actively pursuing land acquisitions in Southern California, targeting available land at purchase prices between $1 and $20 million. “We recognize that the market is shifting once again,” explains Passo. “By renewing our focus on land development now, we will be at the forefront of the next market cycle, allowing us to create substantial value for our investors.” According to Passo, Scott Allen will spearhead land acquisition efforts for Passco Companies Development and drive new land projects forward. Allen will also oversee all of Passco Development Companies’ current land holdings, and will manage future land sales. Allen joins Passco from Tava Development Company, where he served as President. In this role, Allen oversaw all business operations for the company, which developed land for the homebuilding industry and invested in residential and industrial real estate. Prior to his tenure with Tava Development Company, Allen served as Division President of the Southern California Division of Meritage Homes, formerly Citation Homes. Allen earned his Bachelor of Science degree in Real Estate Finance from the University of Southern California, and holds a Light Construction and Development Management (L.C.D.M.) certificate from the University of California, Irvine. **Categories:** Passco News --- ### [Silicon Beach Demands More Entertainment](https://www.passco.com/silicon-beach-demands-more-entertainment/) **Published:** September 19, 2013 **Author:** Synoptek Web Dev **Content:** In response to the arrival of creative and tech companies in West Los Angeles’ Silicon Beach, the Promenade at Howard Hughes Center has decided to rebrand as an entertainment destination. Passco Cos. LLC, a commercial real estate company, is leading the center’s transformation. “The business and residential submarkets surrounding the Promenade at Howard Hughes Center have undergone a massive demographic transformation over the past five years, bringing in creative professionals involved in the entertainment, creative tech and gaming industries,” says Howard Wong, director of leasing at Passco Cos. “Our decision to reposition the Promenade at Howard Hughes Center was a response to the increased demand for unique dining and entertainment options within this urban market.” The community has increased in the last several years mainly with creative companies and tech start-ups attracted to the availability of creative office space, which in turn has helped create a strong residential market. Entertainment options appeared to be missing from the market growth, and Passco Cos. intends to fill that void with this repositioning. Passco Cos. has signed leases with Dave & Buster’s and Buffalo Wild Wings, which are currently under construction and are scheduled to open in fall 2013. Cinemark Theater acquired the center’s current Rave Cinemas, and plans to enhance the space to create an upscale movie theater. “Cinemark Theater, Dave & Buster’s and Buffalo Wild Wings are a strong start to our repositioning,” says Wong. “Along with our existing restaurants we are actively seeking more entertainment and restaurant tenants such as upscale bowling, unique restaurants and brand experience stores.” Targeting entertainment tenants is the first part of a larger plan to transform the center into a mixed-use property with entertainment, retail and living options. “The Howard Hughes Center is on track to become a self-contained community, where residents can live, work and play all in one center,” Wong explains. “This type of destination is especially attractive to young professionals who are beginning to buy homes and rent upscale residential units in this newly thriving submarket.” Passco Cos.’ recently sat down [exclusively with GlobeSt.com’s](http://www.globest.com/news/12_678/orangecounty/retail/Expert-Economics-of-Retail-are-Looking-Strong-336938.html) Natalie Dolce to discuss the retail market. Passco Cos.’ CEO Bill Passco believes that shopping centers offer some of the best investment opportunities in the current market. *This article was originally published on [GlobeSt.com](http://www.globest.com/news/12_695/losangeles/retail/Silicon-Beach-Demands-More-Entertainment-337774.html).* **Categories:** Passco News --- ### [Passco Increases Investment Portfolio With Multifamily Community Acquisition Near North Carolina's Research Triangle Park](https://www.passco.com/passco-increases-investment-portfolio-with-multifamily-community-acquisition-near-north-carolinas-research-triangle-park/) **Published:** July 17, 2013 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC., a privately held Calif.-based real estate company that specializes in the investment, acquisition, development and management of commercial properties throughout the U.S., has completed the acquisition of “Encore at the Park,” formerly known as Century Creek, a 280-unit multifamily community located one mile from North Carolina’s Research Triangle Park in Durham, according to Gary Goodman, Senior Vice President at Passco Companies, LLC. “Encore at the Park has been a consistently solid performing asset and was an attractive acquisition for our firm because of its desirable location near the Raleigh-Durham employment hub,” Goodman noted. “In addition to Research Triangle Park, which boasts more than 40,000 jobs, the property is also in proximity to downtown Durham, which currently provides an additional 20,000 jobs. This keeps demand for quality housing consistently high in this market.” Sean Wood of ARA Investment Services represented both the buyer, Passco Companies LLC, as well as the seller, joint venture partners Centennial Holding Company of Atlanta and The Carlyle Group of Washington, D.C. “Passco’s investment strategy is focused on identifying Class A properties in stabilized markets such as Raleigh-Durham,” Goodman noted. “We will be completing minor value-add upgrades on both the exterior and interior of the property, including upgraded countertops, flooring and fixtures. These renovations will elevate the asset, and keep it competitive in this growing market.” Encore at the Park, located at 2850 Country Creek Boulevard, is a garden style community built in 2001. The units include one-, two- and three-bedroom floor plans. Amenities consist of a resort-style swimming pool, sundeck, executive business center, fitness center, car care center, picnic and grilling stations, video library and a dog park. The units themselves feature detached garages, walk-in closets, private patio/balcony, washer/dryers, gourmet kitchen intrusions and vaulted ceilings. The property will be managed by Riverstone Residential Group. **Categories:** Passco News --- ### [Retail-Acquisition Competition Heats Up](https://www.passco.com/retail-acquisition-competition-heats-up/) **Published:** June 14, 2013 **Author:** Synoptek Web Dev **Content:** As the economy improves, retailers are spending more money, generating improved sales for retailers. This has helped spur an increase of interest in the retail real estate sector by investors, and transactions are starting to take place again. For good properties in well-located areas, competition is getting very strong. Gary Goodman, vice president of acquisitions at Passco Cos., talked to us about this new reality. **GlobeSt.com: How much more competition are you seeing to buy shopping centers?** **Gary Goodman:** The competition has increased pretty dramatically in the last 12 months. With the economy continuing to improve and job growth beginning to gain traction, combined with retailers starting to report improved sales, it seems that we’ve passed reaching the bottom. It doesn’t look like it’s going to get any worse. Everybody likes to buy when the market is the lowest and it seems as if it’s at that point. And if we’re beyond that, the market will begin attracting a lot more attention. **GlobeSt.com: Are there any new buyers entering the market, or is it the usual players?** **Goodman:** It’s the usual players that are active in the market but they have ramped up their efforts. The REITs have definitely increased their interest in buying and private equity has entered the market more actively than before. It’s a combination of that activity. **GlobeSt.com: Are only the class A, core centers getting attention, or are other types of assets garnering interest?** **Goodman:** The grocery anchored, destination centers continue to be the preferred retail centers because they are tried and true. For the last 20 years, they have the best track record. With the increasing threat of online sales, there is even more focus on those kinds of properties. They don’t compete with internet sales. There is also some interest going beyond that now, as the market broadens and more buyers enter in that can’t get the yield they would like for the most conservative destination centers. The buyers will broaden their parameters to look at centers that aren’t as destination-oriented just to get the yield. **GlobeSt.com: Your portfolio is across the country. Where are the hot areas right now as far as acquisition activity goes?** **Goodman:** We’re focused on primary and secondary markets throughout the US. Passco owns a diverse commercial real estate including multifamily, in many cities throughout the country. Ideally, we would like to focus on the markets where we already own real estate. It makes our job of asset and property management easier to have some familiarity with those markets. The gateway cities are the most sought after, but the secondary and tertiary markets are getting a lot of play too. With retail particularly, it’s really more about the specific locations in each city than it is about the cities themselves. You can be in a very unexciting city with limited population or job growth, but if you’ve got the best location and tenant mix in town, your center is going to be gold. We’re more focused on specific locations within desirable areas rather than those markets themselves. **GlobeSt.com: You have an acquisition target of $250 million. Are you pretty confident that you can hit that number given the growing competition from other buyers?** **Goodman:** We feel confident that we can hit our target acquisition goal this year. Given the increase in competition, it will be challenging but there is very strong investor interest. Passco has a strong reputation and is well known with sellers, developers and brokers who have had positive experiences with us. **GlobeSt.com: RECon is a strong indicator of how the retail real estate industry is holding up. How did the show go for you and what did the mood seem like there?** **Goodman:** The mood At RECon this year was much better than it has been in the last five years. Passco always does well at the show with our asset-management group and often sign many new leases. At this year’s conference, our asset-management group reported that there were a lot of tenants approaching us that we had not talked to in the past and that were interested in expanding. The indications are that tenants are looking for new sites, much more so than they were even a year ago. We also had a number of sellers and brokers that expressed an interest in selling properties and others were looking for properties to buy. There is a lot of interest in buying, selling and leasing – more than we have seen in years past. *This article was originally published on [GlobeSt.com](http://www.globest.com/blogs/counterculture/retail/retail-real-estate-transactions-334534.html).* **Categories:** Passco News --- ### [Passco Acquires Another New Class A Apartment Community in Noblesville, Indiana](https://www.passco.com/passco-acquires-another-new-class-a-apartment-community-in-noblesville-indiana/) **Published:** May 28, 2013 **Author:** Synoptek Web Dev **Content:** Passco Companies, a Calif.–based real estate investment company, has completed the acquisition of Autumn Breeze, a 280-unit Class A apartment community located in the suburb of Indianapolis, IN. The property was 95% leased at the time of the acquisition. This acquisition brings Passco’s multifamily portfolio to 33 properties, with more than 10,000 units nationwide. Passco has successfully sponsored 11 real estate investment programs on behalf of more than 500 investors since late 2009. “The acquisition of Autumn Breeze is consistent with our business plan for acquiring high quality Class A properties using all cash, in the best submarkets of cities located throughout the nation”, said Gary Goodman, Senior Vice President of Acquisitions for Passco. Autumn Breeze is located at 14901 Beauty Berry Lane in the city of Noblesville, IN. The property was built in 2009 and contains 280-units consisting of luxury one-, two- and three-bedroom apartment homes. The property is located in the heart of Noblesville and situated across from the Klipsch Music Center, a 24,000-seat-outdoor concert venue, and just down the road from an open-air retail center featuring 80+ retailers/restaurants. Passco has appointed the nation’s second largest third party multifamily manager to oversee the day to day operations. The properties’ amenities include a resort-style pool, billiard room, tanning salon, online concierge services, attached and detached garages, large closets, car care center, pet spa, state-of-the-art clubhouse, 24-hour athletic center, 24-hour business center, cyber cafe complete with WIFI and gourmet kitchens with updated appliances. Autumn Breeze also offers preferred employer and military discounts. Steve LaMotte of CBRE represented both the buyer and the seller. **Categories:** Passco News --- ### [More Stable Economy Boosts Consumer](https://www.passco.com/more-stable-economy-boosts-consumer/) **Published:** May 28, 2013 **Author:** Synoptek Web Dev **Content:** The improvements in the economy, though incremental, are making the consumer more willing to spend, says Larry Sullivan, the president of PASSCO Cos. He spoke with us here are the recent RECon show. Among the other topics he spoke about were: - The types of retail goods that consumers are acquiring. - How home-improvement retailers are faring with a stronger housing market. - Where PASSCO likes to buy retail real estate right now. *This article was originally published on [GlobeSt.com](http://www.globest.com/videos/thought_leadership_video/retail/consumer-shopping-behavior-333818.html).* **Categories:** Passco News --- ### [Playing the Cycles](https://www.passco.com/playing-the-cycles/) **Published:** May 23, 2013 **Author:** Synoptek Web Dev **Content:** Bill Passo, the founder of Passco Cos., talks about how his firm got back into retail real estate in addition to multifamily. He spoke with us at the ICSC RECon show here. Passo also spoke about: - The different buyers looking at retail real estate. - The kinds of retail real estate tenants that are looking at expanding. - Buying and developing shopping centers in secondary markets. *This article was originally published on [GlobeSt.com](http://www.globest.com/videos/thought_leadership_video/national/recon-test-333709.html).* **Categories:** Passco News --- ### [Larry Sullivan Named President of Passco Companies](https://www.passco.com/larry-sullivan-named-president-of-passco-companies/) **Published:** April 29, 2013 **Author:** Synoptek Web Dev **Content:** William O. Passo, founder and CEO of Passco Companies, LLC, has announced the appointment of Larry K. Sullivan as president of the company following the resignation of former president William H. Winn, effective May 30, 2013. With more than 30 years of experience directing real estate and syndication activities for institutional and private investors, Mr. Sullivan has served as Chief Financial Officer and COO of Passco Companies, LLC for nearly 10 years. Mr. Sullivan is ideally placed to attract new institutional and private capital, while expanding the company’s portfolio of 10,000 multifamily units and approximately five million square feet of commercial properties nationwide. “I will be continuing in my role as CEO in shaping and defining the overall direction of the company. We look forward to making 2013 Passco’s most successful year yet, in our core business of finding, buying and operating quality real estate assets,” said Mr. Passo. “Our track record of expertise and the economic recovery are favorable drivers of our ambitious plans to acquire further properties and serve more investors with increasing returns.” **Categories:** Passco News --- ### [Passco Companies Secures Refinancing for Villa Toscana Apartments](https://www.passco.com/passco-companies-secures-refinancing-for-villa-toscana-apartments/) **Published:** January 24, 2013 **Author:** Synoptek Web Dev **Content:** Passco Companies LLC has successfully arranged $33 million in refinancing for Villa Toscana, a unique, 504-unit, luxury multifamily property in Houston, TX. The fixed-interest, 3.77 percent loan is for 10 years. The Freddie Mac loan was arranged by Trevor Brotman of Well Fargo Bank. In announcing this deal, Passco President William Winn said, “This is a unique property for the Houston market, and this low-interest refinance will enable management to upgrade units and improve rents, while lowering the project’s monthly debt service. The improvements also will increase the property’s value”. Inspired by Italian Tuscan architecture and Tuscany’s picturesque countryside, Villa Toscana includes 26 striking, two- and three-story, multi-toned, stucco buildings situated on 23.8 acres. Ideally located in northwest Houston just off Highway 6, a major north-south route connecting Houston to Sugarland, the location also provides easy access to local thoroughfares, including Eldridge Parkway, Little York, and Barker Cypress, as well as the Sam Houston Tollway/ Beltway 8, Highway 290, and Interstate 10. Completed in 2005, this beautifully landscaped, gated property, which is 96% occupied, features attractive waterscapes, luxury interiors and resort-style amenities. Apartment interiors include private terraces with storage rooms, wood-burning fireplaces, built-in computer desks, designer appliances, washer/dryer hookups, nine-foot ceilings with crown molding, custom blinds, walk-in closets, oversized garden tubs with walk-in shower, alarm systems and ceramic-tile entries. The project’s extraordinary array of amenities includes two swimming pools, aquatic sun decks, a water park, elegant clubhouse, fully equipped business center, 24-hour, state-of-the-art fitness center, theater with surround sound, drive-through mail center, picnic grilling areas, storage units and boat garages, and covered parking and garages. **Categories:** Passco News --- ### [Passco Secures Refinancing for Houston-Area Apartment Complex](https://www.passco.com/passco-secures-refinancing-for-houston-area-apartment-complex/) **Published:** January 18, 2013 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC has successfully arranged refinancing for Stoneleigh on Kenswick, a 318-unit, luxury multifamily complex in Humble, TX, The new loan is for $18.5 million and the property was 96.5 percent occupied at the time of closing. The Freddie Mac loan was arranged by Trevor Brotman of Well Fargo Bank. “We are grateful to Seneca, our development partner, and those at Wells Fargo and others who helped bring this transaction to completion,” said Passco President William Winn. “This is a beautiful apartment community in a quiet, wooded location with easy access to retail amenities and commuter routes to downtown Houston and other employment centers. Built in 2007, this controlled-access gated community features luxury appointments in units, including nine-foot ceilings, contemporary island kitchens with custom cabinets and all appliances, full-sized washer/dryers in units, built-in computer desks and bookshelves, track and pendant lighting, oversized oval soaking tubs and separate curved showers in bathrooms, and Texas-sized closets in bedrooms. Located adjacent to a wooded preserve with nature trails, Stoneleigh apartment homes are clustered around a lake that connects to the community’s resort-style pool. The project’s clubhouse offers a state-of-the-art, 24-hour fitness facility and business center with WiFi service, as well as an outdoor entertainment area. The community has a “bark park” and offers both reserved, covered parking and detached garages with remote access. **Categories:** Passco News --- ### [Passco Acquires The Enclave at Rivergate, a Luxury Apartment Community in Charlotte](https://www.passco.com/passco-acquires-the-enclave-at-rivergate-a-luxury-apartment-community-in-charlotte/) **Published:** January 15, 2013 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC, a real estate investment firm based in Irvine, Calif. specializing in the tenant-in-common investment structure, has acquired The Enclave at Rivergate, a 216-unit, Class A apartment complex in Charlotte, NC. Located at 12400 Toscana Way, this luxury apartment community is in a dynamic growth area of Charlotte’s Metropolitan Service Area and in close proximity to I-77 and I-485 and the Charlotte Douglas International Airport. “This is a distinctive apartment community with an exceptional location, just minutes from the best Charlotte has to offer,” said Winn. “Residents enjoy spacious apartment homes with luxurious appointments in a relaxing, small-town atmosphere with outstanding schools and location that also offers convenient access to big-city amenities, as well,” he added. The Enclave at Rivergate is nearby a variety of shopping, dining and entertainment options, as well as recreational opportunities at McDowell Park, Lake Wylie and the U.S. National Whitewater Center. It also is just a short drive to the Carowinds amusement park and downtown Charlotte’s cultural and entertainment amenities, including the Levine Center for the Arts, home to the Knight Theater and Bechtler Museum of Modern Art. Completed in 2009, this quality-constructed complex offers one-, two- and three-bedroom apartment homes, ranging in size from about 900 to 1,500 square feet. Features include modern gourmet kitchens with dark-oak custom cabinetry and energy-efficient, black appliances; sunrooms; built-in computer desks; double-vanity sinks in bathrooms; ceiling fans in master bedroom and sunroom; spacious walk-in closets; washer/dryer hookups; and a private balcony or patio. Southeast Apartment Partners, a regional real estate brokerage firm, represented the seller. This is Passco’s second Class A multifamily acquisition within a two-week period, Winn noted. The company also recently closed on The Glen at Alexander, a 216-unit luxury apartment complex in an affluent Augusta, GA. **Categories:** Passco News --- ### [Passco Acquires The Glen at Alexander](https://www.passco.com/passco-acquires-the-glen-at-alexander/) **Published:** December 19, 2012 **Author:** Synoptek Web Dev **Content:** Passco Companies, LLC, a real estate investment firm based in Irvine, Calif., specializing in the acquisition and asset and property management of multifamily, retail and office properties throughout the U.S, has acquired The Glen at Alexander, a luxury multifamily complex in Augusta, GA, announced Passco President Bill Winn. Located at 1040 Alexander Drive, this Class A, 216-unit apartment complex is located in the affluent National Hills neighborhood, which has an average household income of $100,000 annually. The property is near the heart of downtown and less than five miles from Georgia Health Sciences University and Medical Center; minutes from the Augusta National Golf Club, which is home to the Masters Golf Tournament; and nearby two major shopping centers, as well as the Augusta Riverwalk and park. The location also provides easy access to River Watch Parkway/Route 104 and Carl Sanders Highway/Interstate-20. “Since the property is ideally located near one of Georgia’s most respected medical colleges and academic medical center, there are a great number of medical professionals living in the area and that population is expected to continue to grow,” commented Winn. “We plan to make quality upgrades to the unit interiors,” he added, suggesting that the location, along with the new renovations, provides an opportunity to increase rents and significantly improve rental revenues. The Glen at Alexander is classic southern brick design, constructed of high-quality materials and offers spacious one-, two- and three-bedroom, energy efficient floor plans, ranging in size from 975 to 1,350 square feet. Units have nine-foot ceilings with crown-molding accents, garden tubs in bathrooms, gas fireplaces, utility rooms with full-size washer/dryer included, and large private patios or balconies. A pet-friendly community, the complex features an onsite dog park and other amenities, including: a resort-style pool; clubhouse with a business center, Wifi service, game room, fitness center and tanning beds; playground; and putting green, as well as tennis and basketball courts. Services include: concierge service, valet trash removal, recycling center and gated entrance. Detached garages, corporate suites and furnished units are available. For more information about The Glen at Alexander, visit: [www.glenalexanderapts.com](http://www.glenalexanderapts.com/). **Categories:** Passco News --- ### [New Dave & Buster's to open at Passco's Promenade at Howard Hughes Center](https://www.passco.com/new-dave-busters-to-open-at-passcos-promenade-at-howard-hughes-center/) **Published:** September 18, 2012 **Author:** Synoptek Web Dev **Content:** Dave & Busters, a popular restaurant-entertainment venue, is coming to the Promenade at Howard Hughes Center, a 248,000-square-foot retail-entertainment center in Los Angeles owned by Passco Companies, LLC, a real estate investment firm based in Irvine, Calif. Dave & Busters has signed a 15-year lease for a 40,207-square-foot space at the center, which is located on Sepulveda Boulevard about three miles north of the Los Angeles International Airport and nearby Playa Vista, an 1,100-acre master-planned community; Marina del Rey; and Culver City. Dave & Busters is a leading owner/operator of facilities that offer fun for both adults and families, with a combination restaurant, bar and entertainment arcade. Founded in 1982 as a one-stop “Eat, Drink, Play” venue, this Dallas-based entertainment enterprise now operates 60 facilities nationwide. The new Los Angeles Dave & Busters is expected to open in spring 2013. “We are very pleased to welcome Dave & Busters as we are beginning the transformation of our center to be the premier entertainment complex in LA’s Westside market. This will add yet another dimension to our center’s dining and entertainment opportunities,” said Passco Leasing Director Howard Wong, noting that this retail center draws customers from the Los Angeles Westside, as well as communities throughout the Los Angeles region with its high profile location fronting the 405 freeway. We are not only capturing the local residents but the tremendous amount of tourist and employees located with close proximity between LAX and Santa Monica,” he added. The Promenade at Howard Hughes features a collection of retail shops, eateries and entertainment venues, including Nordstorm Rack, as well as 13 restaurants and cafés and a Rave Motion Picture 18-screen and Imax theatre complex. Dave & Busters was represented by Scott Riddles and Derek Fitch of CBRE. **Categories:** Passco News --- ## Pages ### [Home](https://www.passco.com/) **Published:** May 23, 2023 **Author:** Synoptek Web Dev **Content:** [ ![Memorial banner featuring the title 'In Loving Memory of Our Founder and CEO William “Bill” O. Passo' with a portrait of Bill Passo on the right against a dark blue background.](https://www.passco.com/wp-content/uploads/2026/06/Header-V3.png) ](https://www.passco.com/wp-content/uploads/2026/06/Header-V3.png) ## Passco is a leading real estate investment company leveraging decades of experience through market cycles, uncommon insight, and deep industry relationships to bring sound opportunities to our investors and partners. ## $9.0B ## In Total Acquisitions [Discover Our National Portfolio](https://www.passco.com/our-properties/) ## 28 ## Years in Business [Review Our History in the Making](https://www.passco.com/passcos-story/) ## 9,662+ ## Investors Worldwide [Become Part of Our Success Story](https://www.passco.com/passcos-story/#where-we-are-going) *\*as of June 30, 2026* **Passco Companies, LLC sponsor offerings sold through broker dealers and registered investment advisors authorized to do so. Contact your financial professional to learn more**. **RISKS:** This website is neither an offer to sell nor the solicitation of an offer to buy any security, which can be made only by the applicable prospectus filed or registered with appropriate state and federal regulatory agencies, and sold by broker-dealers authorized to do so. For those considering an investment in any Passco program, please read the applicable prospectus in order to fully understand all the implications and risks of the respective offering of the securities to which it relates. All real estate investments have risks. There is no assurance that some or all of these objectives will be met. There are substantial risks in any Investment Program. --- ### [](https://www.passco.com/8999-2/) **Published:** August 19, 2026 **Author:** Sarah Pratt **Content:** # Our People ![](https://www.passco.com/wp-content/uploads/2023/10/top-quotation-mark.png)### I want everyone who has worked with me or for me to be better off for the experience. ![](https://www.passco.com/wp-content/uploads/2023/10/bottom-quotation-mark.png)#### —Bill Passo [Read More About Bill](#)##### Remembering Bill Passo Bill was more than Passco’s founder—he was its heart. He built the company with vision, courage, and an unwavering belief in people, often saying that one of the greatest measures of success was making life better for those who worked alongside him. He lived that belief every day, creating opportunity, rewarding loyalty, and inspiring others to think bigger and live with purpose. A pioneer in real estate, Bill was renowned for his innovation and judgment, helping advance the fractionalized 1031 ownership structure and open new pathways for investors. He had a remarkable ability to see around corners—recognizing change before it became obvious and adapting with confidence. Those who knew him best will remember his character: gracious, generous, and determined. He lived every day fully. A true American Gentleman. During a career spanning nearly four decades, Mr. Passo directed the formation of more than 200 private and public limited liability companies and limited partnerships. He directed the acquisition, entitlement, management, leasing, and/or disposition of over 250 retail, office, multifamily, and land properties, raising more than $1 billion in investor funds. Mr. Passo held a Juris Doctorate from the University of California, Los Angeles (UCLA) and a Bachelor of Arts with honors from California State University, Long Beach. He practiced law from 1967 to 1985, specializing in real estate syndications and related tax and securities matters. Mr. Passo was a member of FINRA beginning in 1998 and a licensed California Real Estate Broker since 1974. He was a former Director of Catholic Charities Retirement Homes and one of the founders of the Orange County Performing Arts Center. ![Memorial banner honoring founder and CEO William 'Bill' O. Passo (1941–2026) with his portrait on the right.](https://www.passco.com/wp-content/uploads/2026/08/BillMemorialWebsitev2-copy.jpg) # INDUSTRY RECOGNITIONS [View All Accolades](https://www.passco.com/wp-content/uploads/2026/07/Accolades-Sheet_2025.pdf) ![Two women in business suits stand in a hallway, smiling at each other as they chat.](https://www.passco.com/wp-content/uploads/2026/08/Website-Image-Template-w-White-Blue-Borders-V2-1-scaled.jpg) ## At Passco, our strength is in our people. We value a team that is driven to excel and highly diverse in experience and backgrounds. This allows us to recognize and pursue opportunities that others may overlook. Our company culture supports personal and professional growth through ongoing training programs, company events, and an interactive team environment. [Apply to join our team here](https://www.passco.com/careers) ## # MEET THE TEAM ## Ownership Group ## Executive Leadership ## Professional Staff × ') + imgTag(p, ' loading="lazy"') + ' ' + '' + (showBadge && p.memoriam ? 'In Memoriam ' : '') + '' + esc(p.name) + ' ' + '' + esc(p.title) + ' ' + (hasBio ? 'Read More ' : '') + ' '; } function byTier(t){return ROSTER.filter(function(p){return p.tier === t;});} function find(name){for(var i=0;i' + imgTag(p) + ' ' : '' + esc(initials(p.name)) + ' ') + '## ' + esc(p.name) + ' ' + '' + esc(p.title) + ' ' + ' ' + bio.map(function(t){return '' + esc(t) + ' ';}).join(""); wrap.classList.add("is-open"); document.body.style.overflow = "hidden"; wrap.querySelector(".pt-close").focus(); } function close() { wrap.classList.remove("is-open"); document.body.style.overflow = ""; if (lastFocus && lastFocus.focus) lastFocus.focus(); } root.addEventListener("click", function (e) { if (e.target.closest("[data-pt-close]")) { close(); return; } var trigger = e.target.closest("[data-person]"); if (trigger) open(trigger.getAttribute("data-person")); }); document.addEventListener("keydown", function (e) { if (e.key === "Escape" && wrap.classList.contains("is-open")) close(); }); })(); --- ### [Our People](https://www.passco.com/our-people/) **Published:** May 23, 2023 **Author:** Synoptek Web Dev **Content:** # Our People ![](https://www.passco.com/wp-content/uploads/2023/10/top-quotation-mark.png) ## I want everyone who has worked with me or for me to be better off for the experience. ![](https://www.passco.com/wp-content/uploads/2023/10/bottom-quotation-mark.png) ### -Bill Passo ![](https://www.passco.com/wp-content/uploads/2023/10/Our-PPL-Hero.png) # INDUSTRY RECOGNITIONS ![](https://www.passco.com/wp-content/uploads/2023/10/Real-Estate-Forum-logo.png) ![](https://www.passco.com/wp-content/uploads/2023/10/OC-1.png) ![](https://www.passco.com/wp-content/uploads/2023/10/MHN-logo.png) ![](https://www.passco.com/wp-content/uploads/2023/10/Inc-5000-logo.png) ![](https://www.passco.com/wp-content/uploads/2023/10/Globest-logo.png) ![](https://www.passco.com/wp-content/uploads/2023/10/Fast-Growing-logo.png) ![](https://www.passco.com/wp-content/uploads/2023/10/EY-Entrepreneur-2017-Finalist.png) ![](https://www.passco.com/wp-content/uploads/2023/10/Entrepreneur.png) ![](https://www.passco.com/wp-content/uploads/2023/10/Commercial-Property-Executive-logo.png) ![](https://www.passco.com/wp-content/uploads/2023/10/2023-Best-Places-to-Work-in-Multifamily.png) ![](https://www.passco.com/wp-content/uploads/2023/10/2023-Best-Places-to-Work-in-Multifamily-for-Women.png) [View All Accolades](https://www.passco.com/wp-content/uploads/2026/07/Accolades-Sheet_2025.pdf) 38% of Team Has Been with Passco 10+ Years ![](https://www.passco.com/wp-content/uploads/2023/10/30-Percent-of-Team-has-Been-with-Passco.png) 20 20+ Year Anniversaries Celebrated ![](https://www.passco.com/wp-content/uploads/2026/07/Andrewweb.jpg) 32+ Best Place to Work & Top Companies Honors and Counting ![](https://www.passco.com/wp-content/uploads/2023/10/17-Best-Places-to-Work.png) ![](https://www.passco.com/wp-content/uploads/2023/10/people-strength-scaled.jpg) ## At Passco, our strength is in our people. We value a team that is driven to excel and highly diverse in experience and backgrounds. This allows us to recognize and pursue opportunities that others may overlook. Our company culture supports personal and professional growth through ongoing training programs, company events, and an interactive team environment. [Apply to join our team here](https://www.passco.com/careers) ## # MEET THE TEAM ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### William O. Passo ### CEO & Founder William O. Passo is a true pioneer in the real estate investment industry. As founder and Chief Operating Officer of Passco Companies, he is responsible for the growth of the firm, which is now a national real estate company that has acquired, managed, and/or developed more than $3 billion in property spanning 20 states since its inception in 1998. He is also a Partner of Passco Companies. During his career, which has spanned nearly four decades, Mr. Passo has directed the formation of more than 200 private and public limited liability companies and limited partnerships. He has also directed the acquisition, entitlement, management, leasing and/or disposition activities of over 250 retail, office, multifamily and land properties, raising more than $1 billion in investor funds. Mr. Passo holds a Juris Doctorate degree from the University of California, Los Angeles (UCLA). He practiced law from 1967 to 1985, specializing in real estate syndications and related tax and securities matters. He also holds a Bachelor of Arts Degree with honors from California State University, Long Beach. A registered representative and principal of Passco Capital, Inc., Mr. Passo has been a member of FINRA since 1998. He holds registered representative and general principal licenses and has been a licensed California Real Estate Broker since 1974. Mr. Passo is a former Director of Catholic Charities Retirement Homes. He is also one of the founders of the Orange County Performing Arts Center. ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### Larry Sullivan ### President Larry Sullivan has a strong record of leadership in real estate investment, with more than 40 years of industry expertise. As President of Passco Companies, Mr. Sullivan guides the firm’s strategies for growth, and ensures that Passco’s core philosophy of investor-centric decision making is reflected throughout the company. He is also a Partner of Passco Companies. Mr. Sullivan has played an integral role in the growth of Passco Companies. He spearheaded the implementation of a multifamily investment strategy for the firm, resulting in over 30,000 units under ownership and management throughout the U.S. During his tenure, the firm has expanded from approximately $750 million to nearly $4 billion in assets under management. During his career, Mr. Sullivan has been involved with more than $20 billion in real estate transactions on a national scale, including core, value add and development projects spanning across all the major property and specialty sectors. Prior to joining Passco, he served as Managing Director of PM Realty Advisors, an institutional pension fund advisor. Mr. Sullivan holds a Bachelor of Business Administration in Accounting from Niagara University, and completed MBA courses in real estate finance at San Diego State University. He earned a Certified Public Accountant license (inactive) from the state of California and is a member of the American Institute of CPAs (AICPA), the California Society of Certified Public Accountants (CalCPA), the Alternative & Direct Investment Securities Association (ADISA), and the National Multi Housing Council (NMHC). Mr. Sullivan served as the 2020 President for the Alternative & Direct Investment Securities Association (ADISA) and is currently the Chairman for the Legislative Executive Committee and Regulatory Committee wherein he spearheads legislative initiatives on behalf of the of the Association. Mr. Sullivan also sits on the Board of Directors for the National Multi Housing Council (NMHC). In 2017, Mr. Sullivan played a central role on tax reform issues including 1031 exchanges and coordinated ADISA’s position with other associations such as NMHC and Real Estate Roundtable (RER). Sullivan was appointed to the Advisory Board for UCI Paul Merage School of Business Center for Real Estate in 2019. Mr. Sullivan is also the recipient of ADISA’s 2017 A Champion of Excellence (ACE) Award. The Ace Award is the highest honor bestowed on an ADISA member by the Association and is given for demonstrating a remarkable commitment to excellence and adhering to the highest ethical standards and quality performance. ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### Belden Brown ### Executive Vice President Belden Brown is a seasoned real estate professional with more than three decades of experience. As Executive Vice President of Passco Companies, Mr. Brown is responsible for overseeing Passco ‘s Investment strategies. He is also a Partner of Passco Companies. Prior to joining Passco, Mr. Brown served as Senior Vice President for a real estate company, where he was integral in the launch of the company’s first public offering. During his career, Mr. Brown also worked with a money management firm, assisting the company to grow their distribution throughout the broker dealer community. He spent eleven years at Rancho Consultants (now Rancon Securities) as a Regional Vice President representing them in the Southern California marketplace. Mr. Brown attended the University of Miami, and is a licensed securities dealer, holding FINRA Series 7, 22 and 63 licenses. He is also a member of the Alternative & Direct Investment Securities Association (ADISA). ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%201728%202560'%2F%3E) ##### Thomas Jahncke ### President, Passco Capital, Inc. A founding shareholder & Partner of Passco Companies, Thomas Jahncke is a seasoned industry expert with more than three decades of experience. As Senior Vice President and Director for Passco Companies and President of Passco Capital, Inc., Mr. Jahncke is responsible for overseeing the firm’s operations and capital raising functions. A Certified Financial Planner (CFP), he was integral in the formation of Passco Capital, Inc., and has helped the company to raise more than $1.8 billion in equity to date. During his career, Mr. Jahncke has served as Principal and CEO for Hall Securities Corporation, where, under his guidance, the company successfully raised more than $550 million. In addition, Mr. Jahncke served in executive roles with Captec Financial Group, Inc. and Detroit Bank and Trust (now Comerica). Mr. Jahncke earned a Bachelor of Science degree from Cornell University, and a Master of Business Administration degree from the University of Michigan. He holds FINRA series 7, 22, 24, 27, 31, 39, 63 and 65 licenses, and is an active member of several industry associations, including the Alternative & Direct Investment Securities Association (ADISA), the Financial Services Institute (FSI), and the Financial Planning Association (FPA). ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### Alan Clifton ### Chief Operating Officer Alan Clifton is a real estate acquisitions, finance and management expert with more than three decades of experience. As Chief Operating Officer for Passco Companies, Mr. Clifton’s responsibilities include implementation and focus on operational excellence and efficiency, resource management and cross-functional collaboration both internally and externally driving and maximizing organizational success. He works with each individual group leader within Passco, moving necessary enhancements and changes forward in real time. This ensures that equal alignment internally is maintained and supports each leader’s execution with their team members of their group’s business plan. Mr. Clifton works along side Passco’s President in an aligned approach and management style to deliver both Company and individual employee achievement and job satisfaction. During his career, he has also served as group President of BayHarbor Management Services, Founding Partner of Service Plus Financial, and General Manager for Orange and San Diego Counties for CarrAmerica Realty, a multi-billion dollar NYSE traded national REIT. Mr. Clifton holds a Bachelor’s degree in Economics from the University of California, Los Angeles (UCLA). He is a Certified Property Manager (CPM®) and a licensed California Real Estate Salesperson. He is also an active member of several industry associations, including the International Council of Shopping Centers (ICSC) where he was appointed as the Western Division Operations Chairman, the Commercial Real Estate Development Association (NAIOP) and the Mortgage Banker Association (MBA), as well as a former board member of the Institute of Real Estate Management (IREM) and of the Building Owners and Managers Association (BOMA). [Click for Alan’s Conversations with the Experts episode](https://www.passco.com/conversations-with-the-experts-alan-clifton-on-leadership-innovation-and-operational-excellence/) ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### Suzy Cottle ### Chief Financial Officer Suzy Cottle has spent more than 30 years in the finance and real estate industries. As Chief Financial Officer, Ms. Cottle oversees all financial reporting for Passco Companies and its Affiliates for 19 years. Prior to joining Passco Companies, Ms. Cottle served as Director of Corporate Finance for Steadfast Companies for 1.5 years, where she was involved in the development of innovative systems to enhance reporting timeliness and accuracy. In addition, Ms. Cottle was responsible for financial reporting for more than $2 billion in real estate assets owned by institutional pension funds during a 10-year tenure with PM Realty Advisors. Ms. Cottle holds a Bachelor of Business Administration in Accounting from the University of Texas at El Paso. ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### Colin Gillis ### Chief Investment Officer Colin Gillis has twenty years of experience in the multifamily industry. As Chief Investment Officer for Passco Companies, Mr. Gillis is responsible for directing the firm’s nationwide multifamily acquisition efforts. During his ten years with Passco, Mr. Gillis has acquired nearly 17,000 units across 55 transactions in eleven states for a total consideration in excess of $3.7 billion. Prior to joining Passco, Mr. Gillis served as Senior Acquisitions Associate for the Atlanta office of Los Angeles-based JRK Investors, as well as Senior Acquisitions Associate for Atlanta-based The Lane Company. In both of these roles Mr. Gillis was responsible for sourcing acquisitions for investments in the Southeast U.S. Mr. Gillis holds a Master’s in Business Administration, Finance from Kennesaw State University in Kennesaw, Georgia, as well as a Bachelor of Arts in Business Administration and Economics from Oglethorpe University in Atlanta, Georgia. Mr. Gillis is also an active member of the National Multifamily Housing Council (NMHC). Click for Colin’s Conversations with the Experts episode [part 1](https://www.passco.com/expanding-our-deal-flow-looking-for-additional-opportunities-in-new-marketplaces/) & [part 2](https://www.passco.com/multifamily-investment-strategy-in-a-post-supply-surge-market/) ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20683%201024'%2F%3E) ##### Thomas Voekler ### Chief Legal Officer Mr. Voekler has been practicing law for more than 20 years. As Chief Legal Officer, Mr. Voekler oversees all legal, risk, compliance and regulatory functions and supporting Passco Companies’ growth initiative, governance framework and executive leader team. Prior to joining Passco Companies, he was a partner at the firms of Williams Mullen, Kaplan, Voekler, Cunningham and Frank, PLC and Hirschler Fleicher, PC and worked at Hunton Andrews Kurth LLP. Mr. Voekler earned a JD from the College of William & Mary and a BS in Finance from George Mason University. He is an active member of ADISA, of which he served as a board member and president and he serves as general counsel. [Click here for Tom’s episode of Conversations with the Experts ](https://www.passco.com/leadership-spotlight-meet-passcos-chief-legal-officer-tom-voekler/) ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### Ogal Claspell ### Senior Vice President, Asset Management Ogal Claspell has more than 35 years of experience in acquisitions, asset and portfolio management, due diligence, research, valuations, and accounting in the real estate market. As Senior Vice President, Multifamily Investments for Passco Companies, Mr. Claspell oversees the company’s asset management duties including investment operations and performance, financial analysis and budgeting, as well as asset strategy development for the firm’s $3.9 billion portfolio. Prior to joining Passco, Mr. Claspell has been directly involved in over $2 billion of acquisitions, nearly $2 billion of asset and portfolio management, and the annual internal valuation of a $4 billion portfolio of retail, multifamily, office, industrial and other real estate assets. He has held management roles with CS Capital Management, PM Realty Advisors, TCW Realty Advisors, and has vast experience with institutional clients such as the California Retirement System, the Public Employee Retirement System of Idaho, the Utah Retirement System, INVESCO, Taft Hartley Funds, among others. Mr. Claspell earned a Bachelor of Science degree in Accounting from Brigham Young University, has passed Certified Public Accounting (CPA) examination, and has taken and passed numerous other real estate professional courses. Mr. Claspell is a member of National Multifamily Housing Council (NMHC) and the Alternative & Direct Investment Securities Association (ADISA). ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### Stacy Stemen ### Senior Vice President, Strategic Relations Stacy Stemen is a real estate industry marketing specialist. Throughout her 20-year marketing career, she has successfully driven brand growth and business development for several national companies. As Senior Vice President, Strategic Relations for Passco Companies. In this role, she spearheads the development of the Passco brand and manages the strategic growth of the company’s visibility across the nation. She has helped the Company grow to over $4 Billion assets under management and over $8 Billion in acquisitions. Prior to joining Passco Companies, Ms. Stemen worked for nearly two decades in the marketing industry. Ms. Stemen is a graduate of California State University, Fullerton, and is an active member of the Alternative and Direct Investment Securities Association (ADISA) where she currently sits on the Conference Planning Committee. In 2018, Ms. Stemen served as President of Commercial Real Estate Women (CREW) – Orange County Chapter and currently sits on the Chapters Advisory Board. Ms. Stemen sits on the Advisory Board of the UCI Paul Merage Center for Real Estate and was elected to the Aliso Viejo Little League Board in 2019 where she served six years as Director of Sponsorship and Fundraising. In 2023, she was selected to sit on the Orange County American Cancer Society Board of Directors. In 2016, Ms. Stemen was nominated by the Orange County Business Journal as a “Woman in Business” and recognized as a “Woman of Influence” by Real Estate Forum. In 2018, Mrs. Stemen was recognized as one of the “Top Women in Real Estate” by Connect Media and a “Power Woman” by Bisnow in 2018 and 2019. Mrs. Stemen and her Corporate Marketing Team were named one of GlobeSt. Real Estate Forums’ Top Influencers in CRE Marketing and Communications in 2019. She was awarded “Mentor of the Year” by GlobeSt. in 2025. [Click Stacy’s Conversations with the Experts episode](https://www.passco.com/from-brand-to-ambassador-stacy-stemens-passco-journey/) ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20683%201024'%2F%3E) ##### Chris Rodriguez ### Senior Vice President, Strategic Technology & Innovation With over 25 years in technology and business operations, Chris Rodriguez is responsible for developing, implementing, and supporting Passco’s overall technology business strategy. He oversees multifamily and corporate software platforms, IT infrastructure, shared services, data/reporting, telecom, and cybersecurity. He also sits on the NMHC/RETTC Intelligent Buildings and Connectivity Committee. Before joining Passco, Chris spent 13 years as a technology consultant, helping businesses across a wide range of industries leverage technology and systems to meet business goals. He also spent four years managing an online business, handling operations, design, marketing, and copywriting. Chris holds a Bachelor of Arts in studio arts with a minor in creative writing. In his free time, he enjoys painting, writing, and cooking for his wife and two children. ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%201728%202560'%2F%3E) ##### Andy Wang ### Senior Vice President, Sales Andy Wang has spent over two decades in the real estate marketing industry. As Senior Vice President of Marketing for Passco Companies, Mr. Wang is responsible for sharing accurate and detailed information regarding the company’s DST 1031 products, and for building and maintaining strong relationships with broker dealers, clients, real estate agents, and other investors. Mr. Wang has been a part of Passco Companies’ growth since 2002, and was on a team that earned the Award of Excellence from the Tenant-In-Common Association (TICA) for funding the largest tenant-in-common program seen in the industry. He also serves as a principal for Passco Capital, Inc. Prior to joining Passco Companies, Mr. Wang gained experience in financial advising and consulting through increasing positions with Wells Fargo and Morgan Stanley. Mr. Wang obtained a Bachelor of Arts in Psychology from Baylor University, and holds Series 7, 24, 31, and 66 licenses. He is a member of the Alternative & Direct Investment Securities Association (ADISA). ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### Carey P. Levy ### President, Passco Companies Development Mr. Levy serves as the President of Passco Companies Development and is an integral member of the executive team. For over six collective years at Passco, Mr. Levy has been instrumental in addressing policies that promote the company’s culture and vision, as well as championing comprehensive goals and strategic planning for performance and growth. He is a seasoned professional with substantial experience of over 30 years in all sectors of real estate investment, acquisitions & dispositions, development, construction, business management, operations and marketing. Mr. Levy previously served as Chief Operating Officer, Granite Investment Group with responsibilities of the company’s operations, as well as acquisitions, due diligence, entitlements, financing, construction and marketing of significant real estate investments. He was an integral force in growing a large senior housing portfolio at Granite. He also served as Senior Vice President for PM Realty Advisors, a nationally known real estate pension fund advisor with over $2 billion of assets under management. Mr. Levy pursued his educational interests with an emphasis in development and marketing with a degree in Construction Management. In addition, he held a general contractor’s license and realtor’s license, with additional experience in real estate law, finance and business management. Mr. Levy has been affiliated with numerous industry associations such as BIA, ASHA, NIC, ICSC, CIDA, NMUA and NAREIM. *[Click for Carey’s Conversation with the Experts Episode](https://www.passco.com/protecting-value-through-development-a-conversation-with-carey-levy/)* ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### Nicole Fullerton ### Senior Vice President, Investor Services Nicole Fullerton has worked at Passco Companies since 2002, gaining more than 20 years of experience in the real estate client relations industry. As Senior Vice President, Investor Services, Ms. Fullerton oversees all communications with Passco Companies’ investors and such investors’ registered representatives. Ms. Fullerton leads the investor services team, which is tasked with managing investor accounts, distributions and reporting. Ms. Fullerton holds a Bachelor of Science in Business Administration with an emphasis on Marketing from California State University, Long Beach. [Click for Nicole’s Conversations with the Experts episode](https://www.passco.com/putting-investors-first-communication-you-can-trust/) ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### Marco Vitulli ### Vice President, Sales ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### Clay Coleman ### Vice President, Sales Clay Coleman, Vice President, Sales at Passco Companies, brings nearly a decade of seasoned expertise in real estate investments to the firm. In his role, he strategically facilitates the acquisition of DST 1031 equity by cultivating relationships with broker dealer representatives and registered investment advisors across the nation. Additionally, Mr. Coleman plays a pivotal role in investor and financial advisor multifamily investing education, with a focus on 1031 tax-deferred exchanges. Before beginning his current position at Passco, Mr. Coleman served as the Director of Sales for RK Properties, overseeing the central and eastern U.S. regions. His career in real estate began at NexPoint Securities, where he served as a DST Product Specialist for nearly five years, contributing significantly to raising over $500 million in real estate assets. Mr. Coleman's educational foundation includes a Bachelor's Degree in Business & Corporate Communications from the University of Kentucky. He holds notable credentials, including FINRA Series 7, 63, and 66 licenses, indicative of his comprehensive understanding of financial regulations and investment practices. ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%201728%202560'%2F%3E) ##### Drew Aspinwall ### Vice President, Acquisitions Drew Aspinwall has spent his whole career in the acquisition and asset management space specializing in Southeast United States Multifamily. As Vice President, Acquisitions for Passco Companies, Mr. Aspinwall is responsible for the sourcing of new opportunities, underwriting of all potential acquisitions, evaluating target markets, and facilitating new and existing relationships within the multifamily transaction community. During his time with Passco, Mr. Aspinwall has been involved in acquiring more than 5,300 multifamily units in 9 states for a total volume of $1.4 billion. Prior to joining Passco, Mr. Aspinwall served on the Asset Management team for Carroll Organization out of Atlanta, GA. In this role, Mr. Aspinwall was responsible for the budgeting of existing properties, performance reporting, internal valuations, and assisted in dispositions. Mr. Aspinwall graduated Magna Cum Laude from the Terry College of Business at the University of Georgia with a BA in Finance alongside a certificate in Organizational Leadership and Entrepreneurship. Mr. Aspinwall is also a member of NMHC along with being an active supporter of YoungLife Ministries, Wesleyan School, the Institute of Leadership Advancement at the University of Georgia, and coaching youth football in the Atlanta area. ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20683%201024'%2F%3E) ##### David Wolke ### Vice President, Asset Management With over 15 years of experience in real estate management across the Southeast, David Wolke became an integral part of the Passco team in 2022, overseeing a substantial portfolio of 2,500+ units. In his role as Vice President of Asset Management, Mr. Wolke collaborates closely with Passco’s investment management team, as well as third-party operational teams, to ensure alignment with Passco and its investors’ standards in financial performance and property operations. Prior to joining Passco, Mr. Wolke served as Senior Regional Property Manager at Greystar’s Nashville office, overseeing 2,000+ units in the Tennessee/Kentucky/Alabama region. His responsibilities included managing new construction, lease-ups, and stabilized assets. A native of Smyrna, Tennessee, Mr. Wolke knew early on that the heart of any successful operation was people, motivating him to pursue a bachelor’s degree in human resources and personnel management from Western Kentucky University. David currently lives in Murfreesboro, Tennessee with his wife and two daughters. In his leisure time, he enjoys sports, water skiing and working on cars. ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20683%201024'%2F%3E) ##### Jera Harris ### Vice President, Asset Management Jera Harris brings over 34 years of distinguished experience in real estate management, primarily across the Midwest and Southeast regions of the United States. Currently serving as Vice President, Asset Management at Passco, Ms. Harris oversees a diverse portfolio of 3,000+ multifamily units, plays a pivotal role in training team members and significantly contributes to the acquisition process, including budgeting and asset transitioning. Before joining Passco, Ms. Harris dedicated 16 years of her career to Greystar, where she held various roles, managing stabilized assets and distressed properties in receivership. As a Senior Regional Manager, she efficiently oversaw 5,000+ units spanning multiple states, including Oklahoma, Kansas, Arkansas, Texas, Ohio, Kentucky, Florida, South Carolina, and Mississippi. Advancing to the position of Senior Director, Jera continued to excel in managing extensive portfolios. In her present capacity at Passco, Ms. Harris serves as the central liaison for all properties, showcasing her adept oversight of the expansive Midwest and Southeast region. A native of Oklahoma, Ms. Harris transplanted to Hot Springs, Arkansas. While she initially pursued a degree in elementary education at Southwestern Oklahoma State University, her introduction to the multifamily industry redirected her career path towards a remarkable journey in real estate management. ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20683%201024'%2F%3E) ##### Brooks Foy ### Vice President, Asset Management & Analytics Brooks Foy has more than 17 years of experience in asset management of multifamily investments, primarily in California and the Southeast United States. As Vice President, Asset Management & Analytics, Mr. Foy oversees Passco’s Florida portfolio of 2,000+ multifamily units. Mr. Foy is responsible for managing the budget production for the company’s entire portfolio. Additionally, he oversees the analytics team, which is tasked with reporting and strategizing for Passco’s substantial $3.9 billion portfolio. Prior to joining Passco, Mr. Foy served as a Senior Regional Property Manager at Greystar Real Estate Partners. In this role, Mr. Foy managed a portfolio of 2,400+ units in lease up, as well as stabilized communities in the Southeast, primarily in Tennessee, Alabama and Kentucky. Mr. Foy has also held leadership roles at Irvine Company and AvalonBay. Mr. Foy earned a Bachelor of Science degree in Business Administration, with an emphasis in Finance from California State University, Channel Islands. Mr. Foy is an active member of National Multifamily Housing Council (NMHC) and National Apartment Association (NAA). Mr. Foy currently lives in Jacksonville, Florida where he enjoys spending time with his family at the beach, cheering on his kids in sports and playing golf. ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### Andrew Dannenbaum ### Vice President, Operations Andrew Dannenbaum joined Passco Companies in 2022, bringing over a decade of experience in global banking and consulting. As Vice President, Operations, he plays a key role in overseeing the company’s business functions, working closely with the Chief Operating Officer to maintain Passco’s reputation for excellence and drive strategic market positioning. Since joining the firm, he has been instrumental in helping grow Passco’s portfolio to over $3.9 billion in assets under management (AUM). Before joining Passco, Mr. Dannenbaum was Vice President on the Commercial Banking team at JPMorgan Chase, where he focused on financial strategy and client solutions. He began his career at Deloitte Consulting, specializing in transaction and business analytics, supporting major financial institutions on global projects. Mr. Dannenbaum is an active member of the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA), staying engaged with industry trends and advocacy efforts. He earned his degree in Management Information Systems from the Terry College of Business at the University of Georgia, graduating with distinctions. Outside of work, he enjoys giving back to his community and volunteers as a coach for his daughter’s T-ball team in the local Little League. He is also actively involved in mentorship, serving as a mentor in the University of Georgia Mentorship Program, a job coach with Entryway Talent, and a member of the University of Georgia Alumni Association. He currently resides in Atlanta, GA, with his wife and two children. ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20691%201024'%2F%3E) ##### Billy Rowe ### Vice President, Acquisitions Billy Rowe has dedicated his career to the real estate industry, beginning in retail tenant representation before transitioning to multifamily acquisitions. As Vice President, Acquisitions at Passco Companies, Mr. Rowe is responsible for sourcing new opportunities, underwriting potential acquisitions, analyzing target markets, and cultivating both new and existing relationships within the multifamily sector. Since joining Passco, he has been directly involved in the acquisition of approximately 4,000 units across 11 states, representing a total transaction volume of $1.2 billion. Prior to Passco, Mr. Rowe worked with Windsor Realty Group in Atlanta, Georgia, specializing in retail tenant representation. In this role, he focused on business development and securing retail locations for franchisors nationwide. Mr. Rowe earned his Bachelor of Arts in Economics from Vanderbilt University, where he was a captain of the Men’s Tennis Team and recognized as an All-American. He later completed a Master of Science in Business Analytics at the University of Georgia, where he also served as captain of the Men’s Tennis Team and was named to the Dean’s List. Outside of work, Mr. Rowe enjoys spending his time with family and friends playing tennis, golf and cheering on the Los Angeles Chargers. ![Dayna Neville Abdel Vice President Corporate Marketing Passco Companies](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%20683%201024'%2F%3E) ##### Dayna Abdel ### Vice President, Corporate Marketing Dayna Abdel is a marketing executive with more than 13 years of experience in commercial real estate. Throughout her career, she has led strategic marketing initiatives across portfolios ranging from 15,000 to more than 60,000 units and up to 250 communities nationwide. Her experience spans appraisal, brokerage, retail and multifamily, giving her a strong foundation in real estate marketing, operations and portfolio strategy. As Vice President, Corporate Marketing for Passco Companies, Mrs. Abdel oversees corporate marketing, communications and portfolio-wide initiatives for a national multifamily portfolio of more than 50 properties. She leads brand management, digital strategy, public relations, creative services, business development and investor communications, while partnering closely with executive leadership and cross-functional teams to drive integrated programs that enhance portfolio visibility, support capital formation and strengthen investor confidence. Mrs. Abdel is an active member of several leading industry organizations, including CREW Network, CREW Orange County, ADISA and NMHC. She previously served four years on the CREW Orange County Board of Directors, where she held leadership roles including Director of Programs and Director of Communications, and chaired several committees. She also served as a founding member of CREW Network’s Corporate Real Estate Council and currently serves on the CREW Network Marketing and Communications Committee. In addition to her industry leadership, she is deeply committed to mentorship and community involvement through organizations such as Girls Inc., Foster Love and Innovation Housing Opportunities. In 2023, Mrs. Abdel received Connect Media’s Next Generation Award in recognition of her leadership and contributions to the commercial real estate industry. In 2026, she was named a GlobeSt. Women of Influence award winner in the Rising Star category, honoring exceptional women whose achievements are helping move the commercial real estate industry forward. --- ### [Our Properties](https://www.passco.com/our-properties/) **Published:** May 23, 2023 **Author:** Synoptek Web Dev **Content:** # Our Properties # 16 ## States # $4.6B ## Assets Under Management # 15,715 ## Multifamily Units ### ALL PROPERTIES *Current managed portfolio as of June 30, 2026* STATE Alabama Arkansas Florida Georgia Illinois Kentucky Louisiana Mississippi Missouri New Hampshire North Carolina Pennsylvania South Carolina Tennessee Texas Virginia ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Alara Promenade #### Lutz, FL ](https://www.passco.com/wp-content/uploads/2023/06/Altis_Pool_Dusk-1.jpeg) [](https://www.passco.com/wp-content/uploads/2023/06/Altis_Courtyard.jpeg) [](https://www.passco.com/wp-content/uploads/2023/06/Altis_Leasing-Office_3.jpeg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Aventine West Melbourne #### West Melbourne, FL ](https://www.passco.com/wp-content/uploads/2023/06/aventine-west-c2dg-0063-final-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/aventine-west-c2dg-0078-final.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/aventine-west-c2dg-0259-final.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Cadence #### Sugar Hill, GA ](https://www.passco.com/wp-content/uploads/2023/06/CadenceSH_Ext_124_300ppi-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Cadence-3-copy.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Canal 1535 #### New Orleans, LA ](https://www.passco.com/wp-content/uploads/2023/06/0465-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/0946.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/3643web.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Chestnut Farm #### Matthews, NC ](https://www.passco.com/wp-content/uploads/2024/10/157_Solis-Chestnut-Farm_Pool_D2_Cam_01-scaled.webp) [](https://www.passco.com/wp-content/uploads/2024/10/157_Solis_Chestnut_Farm_Fitnes_D1_Cam2-scaled.webp) [](https://www.passco.com/wp-content/uploads/2024/10/157_Solis_Chestnut_Farm_Ext-1.webp) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Cortona at Forest Park #### St. Louis, MO ](https://www.passco.com/wp-content/uploads/2024/07/Cortona-Forest-Park-Pool-at-Night.webp) [](https://www.passco.com/wp-content/uploads/2024/07/Cortona-Apartments-Bar.webp) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Enclave at Woodland Lakes #### Conroe, TX ](https://www.passco.com/wp-content/uploads/2023/06/RED_8754.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Encore #### Belton, MO ](https://www.passco.com/wp-content/uploads/2025/06/PropertyImage_Encore-scaled.jpg) [](https://www.passco.com/wp-content/uploads/2025/06/Portfolio-Photos_Encore2-scaled.jpg) [](https://www.passco.com/wp-content/uploads/2025/06/Portfolio-Photos_Encore-scaled.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Estelle #### Birmingham, AL ](https://www.passco.com/wp-content/uploads/2023/06/Estelle-098-Pool-Area-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Estelle-130-Ext.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Estelle-028-Clubhouse.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Grand Oaks at Crane Creek #### Augusta, GA ](https://www.passco.com/wp-content/uploads/2023/06/Grand-Oaks-at-Crane-Creek-poi-012-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/GOCC_049.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Grand-Oaks-at-Crane-Creek_056_edit.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Lakeview Villas #### New Braunfels, TX ](https://www.passco.com/wp-content/uploads/2023/06/lakeview018_Pool_Edit.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/lakeview030.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/IMGP2683-F_edit.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Legacy on the Bay #### Destin, FL ](https://www.passco.com/wp-content/uploads/2023/06/lotb-c2dg-0008_edit-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/lotb-c2dg-0448_edit.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Legacy-on-the-Bay-poi-2.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Lullwater at Jennings Mill #### Athens, GA ](https://www.passco.com/wp-content/uploads/2023/06/LJM_Ext_060_300ppi-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Clubhouse01.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/LJM_Int_31_300ppi.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Ocean Walk #### Key West, FL ](https://www.passco.com/wp-content/uploads/2023/06/OCEANWALK-APARTMENTS-KEY-WEST-FL-DUSK-POOL-SHOTS-06-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/OCEANWALK-APARTMENTS-KEY-WEST-FL-EXTERIOR-06.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## One Hampton Lake #### Bluffton, SC ![](https://www.passco.com/wp-content/uploads/2023/06/One-Hampton-Lake-1.png) ](https://www.passco.com/wp-content/uploads/2023/06/Hampton_060.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Hampton_065.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Hampton_068.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## One Riverwalk #### Knoxville, TN ](https://www.passco.com/wp-content/uploads/2023/11/One-Riverwalk-scaled.webp) [](https://www.passco.com/wp-content/uploads/2024/03/One-Riverwalk-POI-003-scaled.webp) [](https://www.passco.com/wp-content/uploads/2024/03/One-Riverwalk-POI-012-scaled.webp) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Park 35 on Clairmont #### Birmingham, AL ![](https://www.passco.com/wp-content/uploads/2023/06/Park-35-on-Clairmont-1.png) ](https://www.passco.com/wp-content/uploads/2023/06/Building-Eve-01-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/park-35-twilights_100-v1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Clubhouse-Interior-01.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Prime Living of West Knoxville #### Knoxville, TN ](https://www.passco.com/wp-content/uploads/2023/06/Prime-West-Knoxville-91-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Prime-West-Knoxville-3-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Prime-West-Knoxville-29-1.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Prism at Diamond Ridge #### Moon Township, PA ](https://www.passco.com/wp-content/uploads/2026/02/Passco_Prism-scaled.jpg) [](https://www.passco.com/wp-content/uploads/2026/02/PrismGallery1.jpg) [](https://www.passco.com/wp-content/uploads/2026/02/PrismGallery2.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Reserve at Nocatee #### Ponte Vedra Beach, FL ](https://www.passco.com/wp-content/uploads/2023/06/Firepit-Eve-02-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Building-01.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/13_215-Hunters-Lake-Way_Web.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Riverhouse #### Little Rock, AR ](https://www.passco.com/wp-content/uploads/2023/06/Riverhouse-18-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Riverhouse-14.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Riverhouse-117.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Sapphire Bay #### Baytown, TX ](https://www.passco.com/wp-content/uploads/2023/06/SapphireBay-201804-001-4500px.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/SapphireBay-201712-001a.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/SapphireBay-Model-20171128-003.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Sawgrass Point #### Gonzales, LA ](https://www.passco.com/wp-content/uploads/2023/06/SawgrassPoint_053-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/SawgrassPoint_003.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Sea Glass #### Destin, FL ](https://www.passco.com/wp-content/uploads/2023/06/Sea-Glass-0814_edit-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Sea-Glass-0805-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Seaglass-0447.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Sea Sound #### Panama City Beach, FL ](https://www.passco.com/wp-content/uploads/2023/06/DSF4281-HDR-Edit-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/DSF4256-HDR-Edit.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/DSF4246-HDR.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Slate at Merrimack #### Merrimack, NH ](https://www.passco.com/wp-content/uploads/2023/06/Slate-at-Merrimack_Passco_Small_015.jpg) [](https://www.passco.com/wp-content/uploads/2025/08/Slate-scaled.jpg) [](https://www.passco.com/wp-content/uploads/2025/08/Slate2-scaled.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Soltair Cypress Creek #### Land O' Lakes, FL ](https://www.passco.com/wp-content/uploads/2023/06/Tapestry-Cypress-Creek_Drone-Aerials_Twilight_076-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Tapestry-Cypress-Creek_Twilight_071-v2.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Tapestry-Cypress-Creek_Interiors_050.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Springhouse #### Louisville, KY ](https://www.passco.com/wp-content/uploads/2023/06/Springhouse-Ext.png) [](https://www.passco.com/wp-content/uploads/2023/06/Springhouse-Int.png) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Sweetwater Apartments #### Baton Rouge, LA ](https://www.passco.com/wp-content/uploads/2023/06/43-DJI_0745_1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/01-DSC02656.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Tapestry Long Farm #### Baton Rouge, LA ](https://www.passco.com/wp-content/uploads/2023/06/Tapestry-191-Aerial-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Tapestry-026-Office-Club-Int-1.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Tapestry Northridge #### Jackson, MS ](https://www.passco.com/wp-content/uploads/2023/06/DJI_0002.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/DSC0262.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/DSC0112.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Tapestry Ridge #### Covington, KY ](https://www.passco.com/wp-content/uploads/2023/06/Website-Marker-Photo.webp) [](https://www.passco.com/wp-content/uploads/2025/01/Website-Marker-Photo2_3.webp) [](https://www.passco.com/wp-content/uploads/2025/01/Website-Marker-Photo2_32.webp) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Tapestry Turfway #### Florence, KY ](https://www.passco.com/wp-content/uploads/2025/06/TurfwayHero2-scaled.jpg) [](https://www.passco.com/wp-content/uploads/2025/06/Portfolio-Photos-scaled.jpg) [](https://www.passco.com/wp-content/uploads/2025/06/Portfolio-Photos2-scaled.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## The Atworth at Mellody Farm #### Vernon Hills, IL ](https://www.passco.com/wp-content/uploads/2023/06/180903_022_3MB.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/180903_024_3MB-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/180903_003.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## The Collins #### Covington, LA ](https://www.passco.com/wp-content/uploads/2023/06/IMG_200305_181646E-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/IMG_200305_182018.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Collins-014-Office-Club-Int-1.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## The Fitzroy Chenal #### Little Rock, AR ![](https://www.passco.com/wp-content/uploads/2023/06/The-Fitzroy-Chenal-1.png) ](https://www.passco.com/wp-content/uploads/2023/06/Pool_Edit-3-1.png) [](https://www.passco.com/wp-content/uploads/2023/06/Game-Room-2.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Clubhouse.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## The Grayson #### Spring, TX ](https://www.passco.com/wp-content/uploads/2023/06/Grayson_3228_HERO_Brighter.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Grayson_RED_3288.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Grayson_RED_1920_6mb.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## The Griffon at Vero Beach #### Vero Beach, ](https://www.passco.com/wp-content/uploads/2026/03/Griffon_PortfolioCover-scaled.jpg) [](https://www.passco.com/wp-content/uploads/2026/03/Portfolio-Photos-scaled.jpg) [](https://www.passco.com/wp-content/uploads/2026/03/Portfolio-Photos2-scaled.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## The Harrison at Braselton #### Buford, GA ](https://www.passco.com/wp-content/uploads/2023/06/0N8A4678-Edit-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/0N8A4695-Edit.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/0N8A4705-Edit.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## The Henry at Fritz Farm #### Lexington, KY ![](https://www.passco.com/wp-content/uploads/2023/06/The-Henry-at-Fritz-Farm-1.png) ](https://www.passco.com/wp-content/uploads/2023/06/Henry-095-Ext_edit2-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Henry-047-Pool_Edit.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Henry-083-Club-Int_Edit.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## The Mill at New Holland #### Gainesville, GA ](https://www.passco.com/wp-content/uploads/2023/06/21-DJI_0345-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/10-20-CBRE-TheMillNewHollandApts-3726.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/10-20-CBRE-TheMillNewHollandApts-4001.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## The PARQ at Chesterfield #### Chesterfield, MO ](https://www.passco.com/wp-content/uploads/2023/06/P1267031.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/DJI_0630.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/P1267154.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## The Preserve at Catons Crossing #### Woodbridge, VA ](https://www.passco.com/wp-content/uploads/2023/06/RACC134of147.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/RACC73of147.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Tribute at the Rim #### San Antonio, TX ](https://www.passco.com/wp-content/uploads/2023/06/Pool-7_edit_F.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Bldg-Exterior-3.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Tribute-on-the-Rim-0052_3MB.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## TruNorth at Bulverde #### San Antonio, TX ![](https://www.passco.com/wp-content/uploads/2023/06/Trunorth-at-Bulverde-2.png) ](https://www.passco.com/wp-content/uploads/2023/06/MG_0326.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/MG_0300.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/MG_0184.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Vecina Apartment Villas #### San Antonio, TX ](https://www.passco.com/wp-content/uploads/2023/06/Vecina-Pool-Twilight-4.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Vecina-Fire-Pit.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Vecina-Interior-Clubhouse-Billiards-2.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Velo Shelby Farms #### Cordova, TN ![](https://www.passco.com/wp-content/uploads/2023/06/Velo-Shelby-Farms-1.png) ](https://www.passco.com/wp-content/uploads/2023/06/Velo-Shelby-Farms-POI-001-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Velo-Shelby-Farms-POI-011-1.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Velo-Shelby-Farms-POI-003-1.jpg) ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/portfolio-grid-placeholder.jpg) [## Watervue #### Lake Charles, LA ](https://www.passco.com/wp-content/uploads/2023/06/Brian-Genden-Watervue-POI-005_edit.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Brian-Genden-Watervue-POI-015.jpg) [](https://www.passco.com/wp-content/uploads/2023/06/Brian-Genden-_DSC4248ed.jpg) --- ### [Passco's Story](https://www.passco.com/passcos-story/) **Published:** May 23, 2023 **Author:** Synoptek Web Dev **Content:** # Passco's Story - [ Our Legacy ](#) - [ Where We've Been ](#) - [ Where We Are ](#) - [ Where We're Going ](#) [](#) [](#) [](#) [](#) ![](https://www.passco.com/wp-content/uploads/2023/10/INNOVATION-DRIVE-EXCELLENCE-Lightblue-LOOP.gif) **Passco Companies** is a real estate investment company specializing in the acquisition, development, and management of multifamily and commercial properties throughout the United States. Through leveraging decades of experience through market cycles, unparalleled insight, and deep industry relationships, Passco has become a leading provider of 1031 exchange real estate investment opportunities. ![](https://www.passco.com/wp-content/uploads/2023/06/One-Riverwalk-Int.png) The company has completed over $9.0 billion in acquisitions with $4.6 billion in [assets currently under management](https://www.passco.com/our-properties/). Passco is consistently recognized for its [company leadership and culture](https://www.passco.com/our-people/#leadership), as well as exceptional growth in recent years—which has been driven primarily by the firm’s multifamily investment portfolio. ![](https://www.passco.com/wp-content/uploads/2023/06/ww2.png) ### Where We've Been 1998 2003 2005-2007 2009 2013 2014 2015 2016 2017 2018 2019 2020 2022 2023 2024 2025 Passco Companies, LLC was formed and were pioneers in providing securitized 1031 opportunities with an investment strategy focusing on retail investments in Central California. Passco funded the largest securitized loan in the industry for Puente Hills Mall in Southern California. Sold in 2005 for a 21% ARR. Projecting a period of superior future performance, Passco redirected its investment strategy to multifamily properties growing to over 13,000 units. Passco was awarded the take-over and asset management of 19 multifamily properties totaling nearly $1 billion. Passco continued to provide 1031’s while offering the DST structure to their investors. Awarded Best Practices: Owners and Service Providers by Commercial Property Executive. Named as one of Orange County’s “Best Places to Work.” Passco surpassed $1 billion in multifamily acquisitions. Achieved Preferred Borrower status with Fannie Mae. Named as one of Orange County’s “Best Places to Work” for a second year in a row. Passco acquired over $330 million in investment grade real estate. Named one of the “Fastest Growing Companies” by Real Estate Forum. Awarded one of the Best Places to work for its 3rd consecutive year and named the 2nd Fastest Growing Private Company by the Orange County Business Journal. Passco acquired over $550 million in investment grade real estate. Named #1 “Best Places to Work” in Orange County. Ranked #1 in overall revenue growth for “Fastest Growing Companies” by Real Estate Forum. Passco acquired over $600 million in investment grade real estate, surpassing $2.5 billion in assets under management. Named “Fastest Growing Private Companies in America” by Inc. 5000, and “Top Property Owners” by Commercial Property Executive and Multi-Housing News. Passco celebrates its 20th year, reaches 2.7 Billion in assets under management, is named an “Influencer in Multifamily” by Real Estate Forum and awarded “Top Company Culture” by Entrepreneur.com. Passco Companies Development expands into the Active Seniors Housing market by breaking ground on 161-unit community with Avenida Partners. Passco surpassed $1 billion in transaction volume in 2019, with 3.2 billion assets under management. Named #2 Best Places to Work in Multifamily by Multifamily Leadership and 2019 Top Owners by Mutlifamily News. Passco Gives Back reached a quarter of a million dollars given to charities throughout the country. Passco had 13 new hires in 2019 and added offices in Seattle, Phoenix and Tampa. Passco invented “CoronAID”, an assistance program to help tenants with payment plans during COVID. Named #3 Best Places to Work in Multifamily for Women by Multifamily Leadership and Top Private Companies by Orange County Business Journal. Passco exceeds $6.1 Billion in Acquisitions with over $790 Million in transaction volume during 2020. The firm forms a strategic alliance with leading national commercial real estate finance company, [Greystone](https://www.greystone.com/). Passco celebrates 25 years! ![](https://www.passco.com/wp-content/uploads/2023/08/Passco-25th-Anniversary-Logo.png) Passco closed 2025 with more than $600 million in transactional volume and $4 billion in assets under management. The company was also recognized as one of Orange County’s Top Private Companies and Best Places to Work by the Orange County Business Journal, as well as a Top Property Owner by Commercial Property Executive and Multihousing News. Passco surpassed $7 billion in multifamily acquisitions since 2005 and now serves more than 15,000 investors worldwide. The company was recognized as a Top Multifamily Property Owner by Commercial Property Executive and Multihousing News, a Top Private Company by the Orange County Business Journal and one of GlobeSt.’s Best Places to Work. ![](https://www.passco.com/wp-content/uploads/2023/06/ww2.png) ### Where We Are At the heart of Passco’s value proposition is our team’s ability to identify new opportunities and draw upon our industry reputation and relationships to **help** **develop and scale competitive investment strategies**. We consistently achieve results through acting in the best interest of our investors, team, and the communities in which we invest. ## Multifamily Investment Criteria Traditional Market-Rate and Luxury Multifamily Housing Core, Core-Plus, Near Stabilized Profiles National Focus (Primary, Secondary & Tertiary Markets) Minimum 200 Units Portfolios Considered Active Seniors Housing ## Other Investments Considered ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/flipbox-placeholder-investments.png)### Retail - Up to $10 million - Value-Add Profiles - Western U.S. with a focus on - Las Vegas - Phoenix - Boise - Salt Lake City - Denver - Select California Markets ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/flipbox-placeholder-investments.png)### Self-Storage - Up to $100 million - Stabilized or Value-Add Profiles - Contiguous U.S. ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/flipbox-placeholder-investments.png)### Industrial - Up to $100 million - Multi-Tenant or Single Tenant - Stabilized or Value-Add - Contiguous U.S. ![](https://www.passco.com/wp-content/themes/salient-child/assets/images/flipbox-placeholder-investments.png)### Land - Entitlement and Development - Suitable for Development, Re-development of Multifamily, Residential - 5 to 100 acres - Southern and Central California Locations ![](https://www.passco.com/wp-content/uploads/2023/06/ww2.png) ### Where We're Going ## The Passco team approaches every investment opportunity as a chance to push beyond what we've done before. ### We’re Committed To ## Delivering sound real estate investment opportunities. ![](https://www.passco.com/wp-content/uploads/2023/10/Reach-Over-10-Billion.png) ## Ranking among the top of 1031 exchange transaction providers. ![](https://www.passco.com/wp-content/uploads/2023/10/Deliver-XX-More-High-Caliber.png) ## Growing a portfolio of assets that align with our expertise and goals. ![](https://www.passco.com/wp-content/uploads/2023/10/Ranked-Among-the-top-5-Percent.png) ## We hope you’ll become a part of our story. [Join Our Team](https://www.passco.com/careers/) [Learn More](https://www.passco.com/connect/) --- ### [Passco Exchange](https://www.passco.com/passco-exchange/) **Published:** July 27, 2023 **Author:** Synoptek Web Dev **Content:** # Passco Exchange ### Ideas, Knowledge, and Synergy to Drive our Industry Forward. ## Real estate investment education and insights from Passco are just a click away. ![](https://www.passco.com/wp-content/uploads/2023/10/Passco-Exchange-Main-Image.jpg) [Want to Learn More About 1031 Exchanges?](https://www.passco.com/wp-content/uploads/2025/08/1031DST_Passco.pdf) **Passco Companies, LLC sponsor offerings sold through broker dealers and registered investment advisors authorized to do so. Contact your financial professional to learn more**. **RISKS:** This website is neither an offer to sell nor the solicitation of an offer to buy any security, which can be made only by the applicable prospectus filed or registered with appropriate state and federal regulatory agencies, and sold by broker-dealers authorized to do so. For those considering an investment in any Passco program, please read the applicable prospectus in order to fully understand all the implications and risks of the respective offering of the securities to which it relates. All real estate investments have risks. There is no assurance that some or all of these objectives will be met. There are substantial risks in any Investment Program. ## BLOG --- #### Filter [Passco Exchange](#) [](https://www.passco.com/celebrating-three-years-of-empowerment-annual-womens-vip-brunch-at-nmhc-annual/)![](https://www.passco.com/wp-content/uploads/2024/01/News_Header_Womens-Brunch-NMHC-1024x554.jpg "News_Header_Womens Brunch NMHC - Passco Companies") [](https://www.passco.com/celebrating-three-years-of-empowerment-annual-womens-vip-brunch-at-nmhc-annual/)[Passco Exchange](https://www.passco.com/category/passco-exchange/)### [Celebrating Three Years of Empowerment: Annual Women’s VIP Brunch at NMHC](https://www.passco.com/celebrating-three-years-of-empowerment-annual-womens-vip-brunch-at-nmhc-annual/) In the traditionally male-dominated realm of commercial real estate, Stacy Stemen, the Senior Vice President of Corporate Marketing and Development at Passco Companies, is recognized for her visionary initiative. Three… [](https://www.passco.com/larry-sullivan-speaks-at-ucis-paul-merage-school-of-business-center-for-real-estate-breakfast-meeting/)![](https://www.passco.com/wp-content/uploads/2024/01/News_Header_UCI-Bfast-2024-1024x554.jpg "News_Header_UCI Bfast 2024 - Passco Companies") [](https://www.passco.com/larry-sullivan-speaks-at-ucis-paul-merage-school-of-business-center-for-real-estate-breakfast-meeting/)[Passco Exchange](https://www.passco.com/category/passco-exchange/)### [Larry Sullivan Speaks at UCI’s Paul Merage School of Business Center for Real Estate Breakfast Meeting](https://www.passco.com/larry-sullivan-speaks-at-ucis-paul-merage-school-of-business-center-for-real-estate-breakfast-meeting/) University of California, Irvine’s Paul Merage School of Business Center for Real Estate kicked off the New Year with an insightful Breakfast Meeting held at the Pacific Club in Newport… [](https://www.passco.com/passco-companies-shares-social-media-marketing-expertise-with-newport-harbor-high-school-students/)![](https://www.passco.com/wp-content/uploads/2023/12/Passco-Exchange-Header-Newport-Harbor-HS-1024x341.png "Passco Exchange Header Newport Harbor HS - Passco Companies") [](https://www.passco.com/passco-companies-shares-social-media-marketing-expertise-with-newport-harbor-high-school-students/)[Passco Exchange](https://www.passco.com/category/passco-exchange/)### [Passco Companies Shares Social Media Marketing Expertise with Newport Harbor High School Students](https://www.passco.com/passco-companies-shares-social-media-marketing-expertise-with-newport-harbor-high-school-students/) Passco recently extended its commitment to community engagement by providing invaluable insights into the world of social media marketing. Stacy Stemen, Passco's Senior Vice President of Corporate Marketing & Development,… [](https://www.passco.com/introducing-passco-exchange-your-ultimate-source-for-industry-news-and-insights/)![](https://www.passco.com/wp-content/uploads/2023/10/Passco-Website-Header-Passco-Exchange-Text-Less-Borderless-1024x341.jpg "Passco-Website-Header---Passco-Exchange---Text-Less-&-Borderless - Passco Companies") [](https://www.passco.com/introducing-passco-exchange-your-ultimate-source-for-industry-news-and-insights/)[Passco Exchange](https://www.passco.com/category/passco-exchange/)### [Introducing Passco Exchange: Your Ultimate Source for Industry News and Insights](https://www.passco.com/introducing-passco-exchange-your-ultimate-source-for-industry-news-and-insights/) In a world that's constantly evolving, staying informed and ahead of industry trends is vital. At Passco Companies, we understand the importance of providing valuable insights to the commercial real… [](https://www.passco.com/enhancing-community-performance-unveiling-the-power-of-passco-road-shows/)![](https://www.passco.com/wp-content/uploads/2023/11/News_Header_Roadshows-1024x554-1.jpg "News_Header_Roadshows-1024x554 - Passco Companies") [](https://www.passco.com/enhancing-community-performance-unveiling-the-power-of-passco-road-shows/)[Passco Exchange](https://www.passco.com/category/passco-exchange/)### [Enhancing Community Performance: Unveiling the Power of Passco Road Shows](https://www.passco.com/enhancing-community-performance-unveiling-the-power-of-passco-road-shows/) June 6, 2023 In the realm of property management, the pursuit of excellence is a never-ending journey. As regional and community managers strive to deliver exceptional results, embracing best practices… [](https://www.passco.com/passco-welcomes-uci-students-at-corporate-office/)![](https://www.passco.com/wp-content/uploads/2023/05/News_Header_UCI-CRE-scaled-1-1024x554.jpg "News_Header_UCI CRE - Passco Companies") [](https://www.passco.com/passco-welcomes-uci-students-at-corporate-office/)[Passco Exchange](https://www.passco.com/category/passco-exchange/)### [Passco Welcomes UCI Students at Corporate Office](https://www.passco.com/passco-welcomes-uci-students-at-corporate-office/) February 22, 2023 Passco Companies held its annual Executive Roundtable for the University of California, Irvine’s Center for Real Estate. The event brought together some of the most prominent commercial… [](https://www.passco.com/passco-supports-the-2022-komen-orange-county-more-than-pink-walk/)![](https://www.passco.com/wp-content/uploads/2022/10/Susan-Komen_Event-Headers-1024x555.jpg "Susan Komen_Event Headers - Passco Companies") [](https://www.passco.com/passco-supports-the-2022-komen-orange-county-more-than-pink-walk/)[Passco Exchange](https://www.passco.com/category/passco-exchange/)### [Passco Supports the 2022 Komen Orange County MORE THAN PINK Walk](https://www.passco.com/passco-supports-the-2022-komen-orange-county-more-than-pink-walk/) September 25, 2022 “We walk for the people who can't: for those too weakened by treatment to join. For those who are suffering. For those we have lost. Together we… ## VIDEO --- [**Disciplined Growth: Conservative Underwriting & Unlocking Operational Efficiencies**](https://vimeo.com/1119592056?share=copy "Disciplined Growth: Conservative Underwriting & Unlocking Operational Efficiencies") [**Driving Innovation with Andrew Dannenbaum**](https://vimeo.com/1078499956/cf80bfe7c2) [**An Interview with Colin Gillis, Chief Investment Officer**](https://vimeo.com/1071600968/ace2643cd1?ts=0&share=copy) [**Coffee with the Asset Managers: Jera Harris**](https://vimeo.com/936452540/e7ac0c3881?share=copy) [**Coffee with the Asset Managers: Brooks Foy**](https://vimeo.com/925507265/ba1ab6cf49?share=copy) [**Navigating Insurance: A Conversation with Marianne Rawlins**](https://vimeo.com/922092326/b0e91cb500?share=copy) [**Passco’s Blueprint for Thriving in the 2024 Real Estate Market**](https://vimeo.com/919689222/7182cb1ad7?share=copy) [**Inside the Deal: Passco’s Spotlight on Cortona at Forest Park Acquisition**](https://vimeo.com/896966455/559a844294?share=copy) [**Canal 1535: Exploring Luxury Living in New Orleans**](https://vimeo.com/875268999/b69ed5a8a8?share=copy) [**One Riverwalk: Passco’s Strategic Triumph Unveiled**](https://vimeo.com/885040548/85bd74423a?share=copy) [**A Deep Dive into the Future of DSTs & Passco’s 2023 Journey with President Larry Sullivan**](https://vimeo.com/877185030/2badadb4b9?share=copy) [**Passco Exchange: Interview with David Wolke**](https://vimeo.com/870827959/a5076fbdda?share=copy) [**A Conversation with Ogal Claspell on Passco’s Portfolio and Future Strategies**](https://vimeo.com/856879821/9552b27323?share=copy) [**Navigating the Multifamily Market with Passco’s Colin Gillis**](https://vimeo.com/855104040/cdb5d4d6f4?share=copy) --- ### [Careers](https://www.passco.com/careers/) **Published:** June 23, 2023 **Author:** Synoptek Web Dev **Content:** # CAREERS There is a reason why most of our team has been with Passco for more than 10 years. Our company culture supports personal and professional growth through ongoing training programs, company events, and an interactive team environment. Passco was ranked “Best Places to Work in Multifamily for Women” and “Best Places to Work in Multifamily” for 2023 by Multifamily Leadership. We are currently seeking qualified individuals interested in joining the Passco team. Interested candidates are encouraged to submit a resume and cover letter to . ![](https://www.passco.com/wp-content/uploads/2023/08/A11A1359-Web.jpg) --- ### [Up Close](https://www.passco.com/up-close/) **Published:** May 6, 2026 **Author:** Sarah Pratt **Content:** ## Up Close Up Close is a video series that provides a closer look at Passco’s latest offerings, acquisitions and investment opportunities. Each episode highlights key property details, market insights and strategic considerations to help viewers better understand the communities and opportunities shaping Passco’s portfolio. #### Filter [Conversations with the Experts](#) [](https://www.passco.com/from-brand-to-ambassador-stacy-stemens-passco-journey/)[Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [From Brand to Ambassador: Stacy Stemen’s Passco Journey](https://www.passco.com/from-brand-to-ambassador-stacy-stemens-passco-journey/) [](https://www.passco.com/conversations-with-the-experts-alan-clifton-on-leadership-innovation-and-operational-excellence/)[Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [Conversations with the Experts: Alan Clifton on Leadership, Innovation, and Operational Excellence](https://www.passco.com/conversations-with-the-experts-alan-clifton-on-leadership-innovation-and-operational-excellence/) ![Smiling middle-aged man in a blue checkered suit and patterned tie; professional headshot.](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%201500%201034'%2F%3E) [](https://www.passco.com/protecting-value-through-development-a-conversation-with-carey-levy/)[Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [Protecting Value Through Development: A Conversation with Carey Levy](https://www.passco.com/protecting-value-through-development-a-conversation-with-carey-levy/) ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%202560%202020'%2F%3E) [](https://www.passco.com/inside-escrow-at-passco-lynne-beverly-on-detail-discipline-and-investor-care/)[Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [Inside Escrow at Passco: Lynne Beverly on Detail, Discipline, and Investor Care](https://www.passco.com/inside-escrow-at-passco-lynne-beverly-on-detail-discipline-and-investor-care/) ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%201500%201568'%2F%3E) [](https://www.passco.com/putting-investors-first-communication-you-can-trust/)[Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [Putting Investors First: Communication You Can Trust](https://www.passco.com/putting-investors-first-communication-you-can-trust/) ![](data:image/svg+xml;charset=utf-8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20viewBox%3D'0%200%202251%202560'%2F%3E) [](https://www.passco.com/leadership-spotlight-meet-passcos-chief-legal-officer-tom-voekler/)[Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [Leadership Spotlight: Meet Passco’s Chief Legal Officer, Tom Voekler](https://www.passco.com/leadership-spotlight-meet-passcos-chief-legal-officer-tom-voekler/) --- ### [Up Close V2](https://www.passco.com/up-close-v2/) **Published:** May 6, 2026 **Author:** Sarah Pratt **Content:** ## Up Close Up Close is a video series that provides a closer look at Passco’s latest offerings, acquisitions and investment opportunities. Each episode highlights key property details, market insights and strategic considerations to help viewers better understand the communities and opportunities shaping Passco’s portfolio. #### Filter [Conversations with the Experts](#) [](https://www.passco.com/from-brand-to-ambassador-stacy-stemens-passco-journey/) [](https://www.passco.com/from-brand-to-ambassador-stacy-stemens-passco-journey/)### [From Brand to Ambassador: Stacy Stemen’s Passco Journey](https://www.passco.com/from-brand-to-ambassador-stacy-stemens-passco-journey/) July 17, 2026Stacy Stemen is a real estate industry marketing specialist. Throughout her 20-year marketing career, she has successfully driven brand growth and business development for several national companies. As Senior Vice… [](https://www.passco.com/conversations-with-the-experts-alan-clifton-on-leadership-innovation-and-operational-excellence/) [](https://www.passco.com/conversations-with-the-experts-alan-clifton-on-leadership-innovation-and-operational-excellence/)### [Conversations with the Experts: Alan Clifton on Leadership, Innovation, and Operational Excellence](https://www.passco.com/conversations-with-the-experts-alan-clifton-on-leadership-innovation-and-operational-excellence/) June 10, 2026Alan Clifton is a real estate acquisitions, finance and management expert with more than three decades of experience. As Chief Operating Officer for Passco Companies, Mr. Clifton's responsibilities include implementation… [](https://www.passco.com/protecting-value-through-development-a-conversation-with-carey-levy/)![Smiling middle-aged man in a blue checkered suit and patterned tie; professional headshot.](https://www.passco.com/wp-content/uploads/2026/04/CAREY-LEVY-copy-1-1024x706.png "CAREY LEVY copy - Passco Companies") [](https://www.passco.com/protecting-value-through-development-a-conversation-with-carey-levy/)### [Protecting Value Through Development: A Conversation with Carey Levy](https://www.passco.com/protecting-value-through-development-a-conversation-with-carey-levy/) April 20, 2026Mr. Levy serves as the President of Passco Companies Development and is an integral member of the executive team. Mr. Levy has been instrumental in addressing policies that promote the… [](https://www.passco.com/inside-escrow-at-passco-lynne-beverly-on-detail-discipline-and-investor-care/)![](https://www.passco.com/wp-content/uploads/2026/04/Lynne_BeverlyWeb-1024x808.jpg "Lynne_BeverlyWeb - Passco Companies") [](https://www.passco.com/inside-escrow-at-passco-lynne-beverly-on-detail-discipline-and-investor-care/)### [Inside Escrow at Passco: Lynne Beverly on Detail, Discipline, and Investor Care](https://www.passco.com/inside-escrow-at-passco-lynne-beverly-on-detail-discipline-and-investor-care/) April 6, 2026Lynne Beverly has worked with Passco Companies since 2004 and has been in the Real Estate Industry for 33 years. As Sr. Director of Escrow, Lynne works closing with our… [](https://www.passco.com/putting-investors-first-communication-you-can-trust/)![](https://www.passco.com/wp-content/uploads/2026/03/NICOLE-FULLERTON-980x1024.png "NICOLE FULLERTON - Passco Companies") [](https://www.passco.com/putting-investors-first-communication-you-can-trust/)### [Putting Investors First: Communication You Can Trust](https://www.passco.com/putting-investors-first-communication-you-can-trust/) March 20, 2026Nicole Fullerton has worked at Passco Companies since 2002, gaining more than 20 years of experience in real estate client relations. As Senior Vice President, Investor Services, Ms. Fullerton oversees… [](https://www.passco.com/leadership-spotlight-meet-passcos-chief-legal-officer-tom-voekler/)![](https://www.passco.com/wp-content/uploads/2026/03/TomV2-1-900x1024.jpg "TomV2 - Passco Companies") [](https://www.passco.com/leadership-spotlight-meet-passcos-chief-legal-officer-tom-voekler/)### [Leadership Spotlight: Meet Passco’s Chief Legal Officer, Tom Voekler](https://www.passco.com/leadership-spotlight-meet-passcos-chief-legal-officer-tom-voekler/) March 11, 2026Mr. Voekler has been practicing law for more than 20 years. As Chief Legal Officer, Mr. Voekler oversees all legal, risk, compliance and regulatory functions and supporting Passco Companies’ growth… --- ### [Opt-out preferences](https://www.passco.com/opt-out-preferences/) **Published:** April 21, 2026 **Author:** Synoptek Web Dev **Content:** Region US not activated for cookie-statement. --- ### [Privacy Statement (US)](https://www.passco.com/opt-out-preferences-2/) **Published:** April 21, 2026 **Author:** Synoptek Web Dev **Content:** Region US not activated for cookie-statement. --- ### [Privacy Statement (US)](https://www.passco.com/opt-out-preferences-3/) **Published:** April 21, 2026 **Author:** Synoptek Web Dev **Content:** Region US not activated for cookie-statement. --- ### [Conversations with the Experts](https://www.passco.com/conversations-with-the-experts/) **Published:** January 28, 2026 **Author:** Sarah Pratt **Content:** ## Conversations with the Experts This series features short, 2–5 minute insights on a wide range of topics, shared directly by the senior management team of Passco Companies, LLC. [](https://www.passco.com/from-brand-to-ambassador-stacy-stemens-passco-journey/) [Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [ From Brand to Ambassador: Stacy Stemen’s Passco Journey](https://www.passco.com/from-brand-to-ambassador-stacy-stemens-passco-journey/) Stacy Stemen is a real estate industry marketing specialist. Throughout her 20-year marketing career, she has successfully driven brand growth and business development for several national companies. As Senior Vice… [![Sarah Pratt](https://secure.gravatar.com/avatar/02b1588825bf811e9001dfda22ea0492fa3c1dca4e12d615a83f0905bb723d86?s=70&d=mm&r=g)](https://www.passco.com/author/spratt/)[Sarah Pratt](https://www.passco.com/author/spratt/)July 17, 2026 [](https://www.passco.com/conversations-with-the-experts-alan-clifton-on-leadership-innovation-and-operational-excellence/) [Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [ Conversations with the Experts: Alan Clifton on Leadership, Innovation, and Operational Excellence](https://www.passco.com/conversations-with-the-experts-alan-clifton-on-leadership-innovation-and-operational-excellence/) Alan Clifton is a real estate acquisitions, finance and management expert with more than three decades of experience. As Chief Operating Officer for Passco Companies, Mr. Clifton's responsibilities include implementation… [![Sarah Pratt](https://secure.gravatar.com/avatar/02b1588825bf811e9001dfda22ea0492fa3c1dca4e12d615a83f0905bb723d86?s=70&d=mm&r=g)](https://www.passco.com/author/spratt/)[Sarah Pratt](https://www.passco.com/author/spratt/)June 10, 2026 [![Smiling middle-aged man in a blue checkered suit and patterned tie; professional headshot.](https://www.passco.com/wp-content/uploads/2026/04/CAREY-LEVY-copy-1-900x600.png "CAREY LEVY copy - Passco Companies")](https://www.passco.com/protecting-value-through-development-a-conversation-with-carey-levy/) [](https://www.passco.com/protecting-value-through-development-a-conversation-with-carey-levy/) [Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [ Protecting Value Through Development: A Conversation with Carey Levy](https://www.passco.com/protecting-value-through-development-a-conversation-with-carey-levy/) Mr. Levy serves as the President of Passco Companies Development and is an integral member of the executive team. Mr. Levy has been instrumental in addressing policies that promote the… [![Sarah Pratt](https://secure.gravatar.com/avatar/02b1588825bf811e9001dfda22ea0492fa3c1dca4e12d615a83f0905bb723d86?s=70&d=mm&r=g)](https://www.passco.com/author/spratt/)[Sarah Pratt](https://www.passco.com/author/spratt/)April 20, 2026 [![](https://www.passco.com/wp-content/uploads/2026/04/Lynne_BeverlyWeb-900x600.jpg "Lynne_BeverlyWeb - Passco Companies")](https://www.passco.com/inside-escrow-at-passco-lynne-beverly-on-detail-discipline-and-investor-care/) [](https://www.passco.com/inside-escrow-at-passco-lynne-beverly-on-detail-discipline-and-investor-care/) [Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [ Inside Escrow at Passco: Lynne Beverly on Detail, Discipline, and Investor Care](https://www.passco.com/inside-escrow-at-passco-lynne-beverly-on-detail-discipline-and-investor-care/) Lynne Beverly has worked with Passco Companies since 2004 and has been in the Real Estate Industry for 33 years. As Sr. Director of Escrow, Lynne works closing with our… [![Sarah Pratt](https://secure.gravatar.com/avatar/02b1588825bf811e9001dfda22ea0492fa3c1dca4e12d615a83f0905bb723d86?s=70&d=mm&r=g)](https://www.passco.com/author/spratt/)[Sarah Pratt](https://www.passco.com/author/spratt/)April 6, 2026 [![](https://www.passco.com/wp-content/uploads/2026/03/NICOLE-FULLERTON-900x600.png "NICOLE FULLERTON - Passco Companies")](https://www.passco.com/putting-investors-first-communication-you-can-trust/) [](https://www.passco.com/putting-investors-first-communication-you-can-trust/) [Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [ Putting Investors First: Communication You Can Trust](https://www.passco.com/putting-investors-first-communication-you-can-trust/) Nicole Fullerton has worked at Passco Companies since 2002, gaining more than 20 years of experience in real estate client relations. As Senior Vice President, Investor Services, Ms. Fullerton oversees… [![Sarah Pratt](https://secure.gravatar.com/avatar/02b1588825bf811e9001dfda22ea0492fa3c1dca4e12d615a83f0905bb723d86?s=70&d=mm&r=g)](https://www.passco.com/author/spratt/)[Sarah Pratt](https://www.passco.com/author/spratt/)March 20, 2026 [![](https://www.passco.com/wp-content/uploads/2026/03/TomV2-1-900x600.jpg "TomV2 - Passco Companies")](https://www.passco.com/leadership-spotlight-meet-passcos-chief-legal-officer-tom-voekler/) [](https://www.passco.com/leadership-spotlight-meet-passcos-chief-legal-officer-tom-voekler/) [Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [ Leadership Spotlight: Meet Passco’s Chief Legal Officer, Tom Voekler](https://www.passco.com/leadership-spotlight-meet-passcos-chief-legal-officer-tom-voekler/) Mr. Voekler has been practicing law for more than 20 years. As Chief Legal Officer, Mr. Voekler oversees all legal, risk, compliance and regulatory functions and supporting Passco Companies’ growth… [![Sarah Pratt](https://secure.gravatar.com/avatar/02b1588825bf811e9001dfda22ea0492fa3c1dca4e12d615a83f0905bb723d86?s=70&d=mm&r=g)](https://www.passco.com/author/spratt/)[Sarah Pratt](https://www.passco.com/author/spratt/)March 11, 2026 1[2](https://www.passco.com/wp-cron.php/page/2/?doing_wp_cron=1788806469.1732540130615234375000)[Next »](https://www.passco.com/wp-cron.php/page/2/?doing_wp_cron=1788806469.1732540130615234375000) ## Recent Posts [Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [ From Brand to Ambassador: Stacy Stemen’s Passco Journey ](< https://www.passco.com/from-brand-to-ambassador-stacy-stemens-passco-journey/>) [Read Article ](https://www.passco.com/from-brand-to-ambassador-stacy-stemens-passco-journey/) [Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [ Conversations with the Experts: Alan Clifton on Leadership, Innovation, and Operational Excellence ](< https://www.passco.com/conversations-with-the-experts-alan-clifton-on-leadership-innovation-and-operational-excellence/>) [Read Article ](https://www.passco.com/conversations-with-the-experts-alan-clifton-on-leadership-innovation-and-operational-excellence/) [Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [ Protecting Value Through Development: A Conversation with Carey Levy ](< https://www.passco.com/protecting-value-through-development-a-conversation-with-carey-levy/>) [Read Article ](https://www.passco.com/protecting-value-through-development-a-conversation-with-carey-levy/) [Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [ Inside Escrow at Passco: Lynne Beverly on Detail, Discipline, and Investor Care ](< https://www.passco.com/inside-escrow-at-passco-lynne-beverly-on-detail-discipline-and-investor-care/>) [Read Article ](https://www.passco.com/inside-escrow-at-passco-lynne-beverly-on-detail-discipline-and-investor-care/) [Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [ Putting Investors First: Communication You Can Trust ](< https://www.passco.com/putting-investors-first-communication-you-can-trust/>) [Read Article ](https://www.passco.com/putting-investors-first-communication-you-can-trust/) [Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/)### [ Leadership Spotlight: Meet Passco’s Chief Legal Officer, Tom Voekler ](< https://www.passco.com/leadership-spotlight-meet-passcos-chief-legal-officer-tom-voekler/>) [Read Article ](https://www.passco.com/leadership-spotlight-meet-passcos-chief-legal-officer-tom-voekler/) --- ### [1031 Exchanges & DSTs](https://www.passco.com/1031-exchanges-dsts/) **Published:** October 15, 2025 **Author:** Sarah Pratt **Content:** # What Is a 1031 Exchange? How DSTs Fit In. Learn the rules, timelines, and risks—plus when a Delaware Statutory Trust (DST) might make sense as replacement property. 5‑minute read. No jargon. [Show Me How ](#) # Firms like Passco Companies specialize in providing turnkey, due-diligence-complete replacement properties ![](http://54cb3baa74d4d851e8b7-2e7f88565dceb0a8192c6645d1f8b1b4.r12.cf2.rackcdn.com/bottle-mockup.png) ##### 1031 Exchange ## What is it and how does it work? A 1031 exchange (named after Section 1031 of the U.S. Internal Revenue Code) allows real estate investors to defer paying capital gains taxes when selling one investment property — as long as they reinvest the proceeds into another “like-kind” property. Instead of receiving the cash from your sale directly, you must use a qualified intermediary (QI) to hold the funds and use them to purchase your replacement property. This arrangement ensures the transaction is treated as a tax-deferred exchange rather than a taxable sale. ### 1031 Exchange Frequently asked questions ### [What properties qualify for a 1031 exchange?](#) Both the property you sell (relinquished property) and the property you acquire (replacement property) must be held for productive use in a trade, business, or for investment. - **Qualifying properties:** This includes a wide range of real estate, such as single-family rentals, apartment buildings, commercial properties, raw land, and industrial warehouses. - **Non-qualifying properties:** Personal residences, “fix-and-flips” (properties held primarily for resale), and foreign real estate do not qualify. ### [What is "like-kind"?](#) The term “like-kind” is broadly defined by the IRS for real estate. Any real property held for investment or business use is considered “like-kind” to any other. For instance, you can exchange a single-family rental for a retail space or undeveloped land for an apartment building. ### [What are the 1031 exchange timeline rules?](#) There are two critical deadlines that run concurrently and are non-negotiable, unless a federally declared disaster occurs: - **45-day identification period:** You have 45 calendar days from the closing of your relinquished property to identify potential replacement properties in writing. - **180-day exchange period:** You must close on the replacement property within 180 calendar days from the closing of the relinquished property. This period is shortened if your tax return for that year is due earlier. ### [What happens if I miss the deadlines?](#) If you fail to meet either the 45-day identification deadline or the 180-day closing deadline, the exchange is invalid. The sale is then treated as a taxable event, and you will owe capital gains tax and depreciation recapture on the proceeds. ### [Can I do a 1031 exchange on my primary residence?](#) No, a primary residence does not qualify for a 1031 exchange. However, it is possible to convert a primary residence into a rental property for a period of time to make it eligible. To do this, you must rent it out at fair market value for at least 14 days in each of the two years prior to the exchange and limit personal use to specific thresholds. ### [Do I have to reinvest all my proceeds?](#) To defer all capital gains taxes, you must reinvest all of your proceeds and purchase a replacement property of equal or greater value. Any cash you receive from the transaction is known as “boot” and is taxable. ### [Can I receive cash during the exchange?](#) Any cash you receive during the exchange process will be taxed as a capital gain. All sale proceeds must be held by your qualified intermediary. If you want to receive some cash, it must be handled correctly before the QI receives the funds. ### [What is a qualified intermediary (QI)?](#) A qualified intermediary is a third party who facilitates the exchange. The QI holds the proceeds from the sale and manages the transaction to ensure all IRS rules are followed. You cannot be related to your QI or have had a formal business relationship with them within two years of the exchange. ### [Is a 1031 exchange tax-free?](#) No, a 1031 exchange is a “tax-deferred” event, not “tax-free”. The capital gains tax is deferred until a later date, typically when the replacement property is sold without being rolled into another exchange. An exception is if the property is passed to an heir upon your death, as the property receives a “stepped-up” basis at that time. ### [Do I have to buy property in the same state?](#) No. You can acquire a replacement property in any state in the U.S. and still qualify for the tax deferral. However, you should consult a tax advisor about any potential state-level tax differences, as some states have “clawback” provisions that can tax the deferred gain at a later date. ##### DST (Delaware Statutory Trust) ## What is it and how does it work? A DST is a Legal entity used to hold title to investment real estate. It allows multiple investors to own fractional interests in large, institutional-quality properties — like apartment complexes, office buildings, or shopping centers — while maintaining eligibility for a 1031 exchange. ![](http://54cb3baa74d4d851e8b7-2e7f88565dceb0a8192c6645d1f8b1b4.r12.cf2.rackcdn.com/bottle-mockup.png) ### DST Frequently asked questions ### [How does a DST relate to a 1031 exchange?](#) Under IRS Revenue Ruling 2004-86, beneficial interests in a DST qualify as **“like-kind” property** for 1031 exchange purposes. This means investors can defer capital gains taxes from the sale of an investment property by reinvesting into a DST. ### [What types of properties are typically owned by a DST?](#) DSTs commonly hold **institutional-quality, income-producing assets**, such as: - Class A multifamily communities - Office and medical buildings - Industrial and logistics centers - Retail centers - Self-storage and hospitality properties These properties are professionally managed and stabilized to provide predictable income streams. ### [What are the benefits of investing in a DST?](#) - **Tax Deferral:** Qualifies for 1031 exchange tax benefits. - **Passive Income:** No management responsibilities. - **Diversification:** Ability to invest in multiple DSTs and asset types. - **Accessibility:** Access to institutional-grade real estate that individual investors typically can’t purchase alone. - **Due Diligence:** Properties are fully vetted and managed by experienced sponsors like Passco Companies. ### [How long is a typical DST investment held?](#) DSTs generally have a **5- to 10-year holding period**, depending on market conditions and the sponsor’s strategy. At the end of the term, the property is usually sold, and investors may: - Receive sale proceeds (potentially taxed if not reinvested), or - Complete another **1031 exchange** into a new property or DST. ### [Can I sell my DST interest before the property is sold?](#) DST interests are **not easily liquidated**. They are considered **illiquid investments**, meaning investors should be prepared to hold the investment for the full duration of the trust’s life cycle. ### [Are DST investments safe?](#) DSTs are backed by real property assets and managed by professional firms; however, **they are not risk-free**. Risks include market fluctuations, property performance, tenant stability, and interest rate changes. Investors should review offering documents carefully and consult financial and tax advisors before investing. #### Filter [Thought Leadership](#) [](https://www.passco.com/test-post-about-dst/)[Thought Leadership](https://www.passco.com/category/thought-leadership/)### [Test Post about DST](https://www.passco.com/test-post-about-dst/) --- ### [Social Media Disclosure](https://www.passco.com/social-media-disclosure/) **Published:** October 23, 2025 **Author:** Sarah Pratt **Content:** **Social Media Disclosure** All statements made via social media sites sponsored or maintained by Passco Capital, Inc. and its affiliates (or “third-parties”) are not intended as investment, tax, or legal advice. Passco Capital, Inc. and its affiliates (or “third-parties”) are not responsible for and do not endorse any comments by other users of the social media platforms or followers of Passco Capital, Inc. or its affiliates. Also, Passco Capital, Inc. and its affiliates (or “third-parties”) are not responsible for the administration of the terms of use, privacy policies, or security policies of any social media sites. You use such social media sites at your own risk and pursuant to an independent user or customer relationship with those social media sites. Passco Capital, Inc. and its affiliates (or “third-parties”) reserve the right to block any user or follower who posts or reposts content that is deemed inappropriate or offensive or constitutes spam, a testimonial, advice, recommendation, or advertisement for securities, products, or services, or is promotional in nature. Any opinions expressed by our followers are those of the persons submitting the comments and don’t necessarily represent the views of Passco Capital, Inc. or its affiliates (or “third-parties”). Testimonials may not be representative of the experience of other customers. The information contained herein is for informational purposes only and is not, and shall not constitute, investment advice, an offer to sell, a solicitation of an offer to buy, or an offer to purchase any securities, nor should it be deemed to be an offer or a solicitation of an offer to purchase or sell any investment product or service. Testimonials are not a guarantee of future performance or success. Passco Capital, Inc. and its affiliates (or “third-parties”) expressly disclaim any liability or loss incurred by any person who acts on the information, ideas, or strategies discussed. Investing comes with inherent risks and you should always invest within your means and risk tolerance. Past performance is not an indication of future returns, and you should always consult a financial advisor prior to making investment decisions. For accredited investors only. This information is neither an offer to sell nor a solicitation of an offer to buy any security by any person in any jurisdiction. Offers and sales shall be made only to persons who qualify as accredited investors under applicable U.S. federal law and only pursuant to a confidential offering memorandum (the “Memorandum”) and subscription documents setting forth definitive terms of each investment opportunity. An investment in a limited partnership involves a high degree of risk and is speculative as described in detail in the Memorandum for each investment opportunity, including the possible loss of your investment, and is illiquid with an uncertain liquidity date. This communication has not been approved or disapproved by the U.S. Securities and Exchange Commission (the “SEC”) or the securities regulatory authority of any state, nor has the SEC or any securities regulatory authority passed upon the accuracy or adequacy of statements in this communication. Any representation to the contrary is a criminal offense. Past performance is not indicative of future results. Securities offered through Passco Capital Securities, LLC, member FINRA / SIPC. --- ### [Passco Reaches $4 Billion AUM](https://www.passco.com/passco-reaches-4-billion-aum/) **Published:** September 9, 2025 **Author:** Sarah Pratt **Content:** [](https://vimeo.com/1117154190?share=copy)![](https://www.passco.com/wp-content/uploads/2025/09/Screenshot-2025-09-09-at-90518-AM.png "Screenshot 2025-09-09 at 90518 AM - Passco Companies")[Play Video ](https://vimeo.com/1117154190?share=copy) --- ### [Passco Gives Back](https://www.passco.com/passco-gives-back/) **Published:** May 23, 2023 **Author:** Synoptek Web Dev **Content:** # Passco Gives Back ## Since Passco’s inception, we’ve put people first. We believe we have an obligation to do what we can to better the lives of those around us—especially those facing tough times. ![](https://www.passco.com/wp-content/uploads/2025/04/PasscoGivesBack-1.webp) ![](https://www.passco.com/wp-content/uploads/2023/10/Passco-Give-Back.png) In 2015, we formalized this commitment with the launch of **Passco Gives Back**, our charitable giving program through which we support worthwhile organizations. We achieve this both directly and through inspiring our team, industry colleagues, family, and friends to donate their own time to these causes. In fact, several of Passco’s team members sit on the boards of nonprofit organizations close to their hearts. # PROUDLY SUPPORTING ![](https://www.passco.com/wp-content/uploads/2024/02/ADISA-Foundation_Gray.png) ![](https://www.passco.com/wp-content/uploads/2023/06/AlaskaRaptorCenter-logo.png) ![](https://www.passco.com/wp-content/uploads/2023/10/Aliso-Viejo-Resize.png) ![](https://www.passco.com/wp-content/uploads/2024/02/acs-logo_gray.png) ![](https://www.passco.com/wp-content/uploads/2023/06/redcross-logo.png.img_.png) ![](https://www.passco.com/wp-content/uploads/2023/06/BGCF-Logo-LRG-722x441-1.png) ![](https://www.passco.com/wp-content/uploads/2024/02/CREW-OC_Gray.png) ![](https://www.passco.com/wp-content/uploads/2023/06/CFF_Logo_highres.png) ![](https://www.passco.com/wp-content/uploads/2023/06/Dementia-Society-of-America.png) ![](https://www.passco.com/wp-content/uploads/2023/06/german-shepherd-rescue-of-orange-county.png) ![](https://www.passco.com/wp-content/uploads/2023/06/hologo_green_4inch_3_jpg-1381778418.png) ![](https://www.passco.com/wp-content/uploads/2023/10/Johnny-Mac-Resize.png) ![](https://www.passco.com/wp-content/uploads/2023/06/KidsWorks.png) ![](https://www.passco.com/wp-content/uploads/2023/06/Literacy-project_Logo.png) ![](https://www.passco.com/wp-content/uploads/2023/06/meals_on_wheels_logo_detail-945x480-1.png) ![](https://www.passco.com/wp-content/uploads/2023/06/MoveForHunger.png) ![](https://www.passco.com/wp-content/uploads/2023/06/Orangewood-logo_1.jpg) ![](https://www.passco.com/wp-content/uploads/2023/10/Project-Hope-Resize.png) ![](https://www.passco.com/wp-content/uploads/2023/06/susan-g-komen-vector-logo.png) ![](https://www.passco.com/wp-content/uploads/2023/06/WarriorFoundation.png) ![](https://www.passco.com/wp-content/uploads/2025/05/ArborDayfoundation.png) ![](https://www.passco.com/wp-content/uploads/2023/06/give-back-slide-2-1.jpg "Passco-Website-Full-Design-Draft-Rev20 copy - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/06/give-back-slide-2-1.jpg) ![](https://www.passco.com/wp-content/uploads/2023/06/gives-back-slide-3-1.jpg "Passco-Website-Full-Design-Draft-Rev20 copy - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/06/gives-back-slide-3-1.jpg) ![](https://www.passco.com/wp-content/uploads/2023/06/charity-golf.jpg "charity golf - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/06/charity-golf.jpg) ![](https://www.passco.com/wp-content/uploads/2023/06/Fotor1202171521.jpg "Fotor1202171521 - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/06/Fotor1202171521.jpg) ![](https://www.passco.com/wp-content/uploads/2023/10/IMG_1478.jpg "IMG_1478 - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/10/IMG_1478.jpg) ![](https://www.passco.com/wp-content/uploads/2023/10/Snow-Passco-Web.png "Snow Passco (Web) - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/10/Snow-Passco-Web.png) ![](https://www.passco.com/wp-content/uploads/2023/10/IMG_1480.jpg "IMG_1480 - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/10/IMG_1480.jpg) ![](https://www.passco.com/wp-content/uploads/2023/10/OC-supports-our-Troops.png "OC supports our Troops - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/10/OC-supports-our-Troops.png) ![](https://www.passco.com/wp-content/uploads/2023/10/image001-2.png "image001 2 - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/10/image001-2.png) ![](https://www.passco.com/wp-content/uploads/2023/10/IMG_1963.png "IMG_1963 - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/10/IMG_1963.png) ![](https://www.passco.com/wp-content/uploads/2023/10/IMG_3579.png "IMG_3579 - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/10/IMG_3579.png) ![](https://www.passco.com/wp-content/uploads/2023/10/IMG_3597.png "IMG_3597 - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/10/IMG_3597.png) ![](https://www.passco.com/wp-content/uploads/2023/10/IMG_9628.png "IMG_9628 - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/10/IMG_9628.png) ![](https://www.passco.com/wp-content/uploads/2023/10/IMG_5512.png "IMG_5512 - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/10/IMG_5512.png) ![](https://www.passco.com/wp-content/uploads/2023/12/IMG_3568_Original.png "IMG_3568_Original - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/12/IMG_3568_Original.png) ![](https://www.passco.com/wp-content/uploads/2023/12/Newport-Harbor-2.png "Newport Harbor 2 - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/12/Newport-Harbor-2.png) ![](https://www.passco.com/wp-content/uploads/2024/02/German-Shepp.png "German Shepp - Passco Companies")[](https://www.passco.com/wp-content/uploads/2024/02/German-Shepp.png) ![](https://www.passco.com/wp-content/uploads/2024/02/Lynn.png "Lynn - Passco Companies")[](https://www.passco.com/wp-content/uploads/2024/02/Lynn.png) ![](https://www.passco.com/wp-content/uploads/2024/02/Bill.png "Bill - Passco Companies")[](https://www.passco.com/wp-content/uploads/2024/02/Bill.png) ![](https://www.passco.com/wp-content/uploads/2024/02/Veterans.png "Veterans - Passco Companies")[](https://www.passco.com/wp-content/uploads/2024/02/Veterans.png) ![](https://www.passco.com/wp-content/uploads/2023/12/Newport-Harbor-1.png "Newport Harbor 1 - Passco Companies")[](https://www.passco.com/wp-content/uploads/2023/12/Newport-Harbor-1.png) ![](https://www.passco.com/wp-content/uploads/2025/05/Celebration-Passco-Employees-3408336FullSize.jpg "Celebration-Passco Employees-3408336FullSize - Passco Companies")[](https://www.passco.com/wp-content/uploads/2025/05/Celebration-Passco-Employees-3408336FullSize.jpg) --- ### [News & Events](https://www.passco.com/news-events/) **Published:** May 23, 2023 **Author:** Synoptek Web Dev **Content:** # News & Events ### What’s Happening, Here & Now ## Passco’s latest updates, team milestones, and industry engagements. #### Filter [Passco News](#)[Upcoming Events](#) [](https://www.passco.com/passco-companies-appoints-stacy-stemen-as-senior-vice-president-of-strategic-relations/)![](https://www.passco.com/wp-content/uploads/2025/11/Stacy-Promotion-Announcement-6-x-4-in-1024x683.jpg "Stacy Promotion Announcement 6 x 4 in - Passco Companies") [](https://www.passco.com/passco-companies-appoints-stacy-stemen-as-senior-vice-president-of-strategic-relations/)### [Passco Companies Appoints Stacy Stemen as Senior Vice President of Strategic Relations](https://www.passco.com/passco-companies-appoints-stacy-stemen-as-senior-vice-president-of-strategic-relations/) Irvine, Calif. — November 4, 2025 — Passco Companies, a leading national real estate investment firm, is proud to announce the appointment of Stacy Stemen as Senior Vice President of Strategic Relations. In this… [](https://www.passco.com/passco-plants-trees-in-honor-of-employees/)![](https://www.passco.com/wp-content/uploads/2025/05/ArborDay.jpg "ArborDay - Passco Companies") [](https://www.passco.com/passco-plants-trees-in-honor-of-employees/)### [Passco Plants Trees in Honor of Employees](https://www.passco.com/passco-plants-trees-in-honor-of-employees/) At Passco, we believe in creating a positive impact—not just in our communities, but for the planet we all share. In celebration of Earth Day, we’ve planted a tree in… [](https://www.passco.com/2024-cpe-2024-top-commercial-real-estate-owners/)!["2024 TOP COMMERCIAL PROPERTY OWNERS" text superimposed over an image of a large building with multiple levels, patio area, pool, and lounge chairs. The sky is painted with hues of pink and blue, indicating sunrise or sunset.](https://www.passco.com/wp-content/uploads/2024/11/News_Header_CPETop-1024x554.webp "News_Header_CPETop - Passco Companies") [](https://www.passco.com/2024-cpe-2024-top-commercial-real-estate-owners/)### [CPE 2024 Top Commercial Real Estate Owners](https://www.passco.com/2024-cpe-2024-top-commercial-real-estate-owners/) Another top placement for Passco! A huge congratulations for earning a spot among the 2024 Top Commercial Real Estate Owners at Commercial Property Executive! We are proud to celebrate this… [](https://www.passco.com/passco-makes-top-multifamily-owners-list/)![A promotional graphic for "MHN Multi-Housing News" featuring the headline "Top Multifamily Owners List!" by Passco, a national real estate company established in 1998. The design includes a blurred background of a modern residential complex, emphasizing the brand's recognition in the multifamily housing sector.](https://www.passco.com/wp-content/uploads/2024/11/News_Header_MHN-Multifamily-list-1024x554.webp "News_Header_MHN-Multifamily-list - Passco Companies") [](https://www.passco.com/passco-makes-top-multifamily-owners-list/)### [Passco Makes Top Multifamily Owners List](https://www.passco.com/passco-makes-top-multifamily-owners-list/) Exciting News! Passco made the Multi-Housing News Top Multifamily Owners list! This achievement highlights our commitment to creating quality communities for our residents. A heartfelt thanks to everyone that helped… [](https://www.passco.com/passco-buys-278-unit-st-louis-community/)![A luxurious apartment complex featuring a large pool and lounge chairs, perfect for relaxing in the sun.](https://www.passco.com/wp-content/uploads/2024/07/Cortona-1024x554.webp "Cortona - Passco Companies") [](https://www.passco.com/passco-buys-278-unit-st-louis-community/)### [Passco Buys 278-Unit St. Louis Community](https://www.passco.com/passco-buys-278-unit-st-louis-community/) KeyBank originated a $33.7 million Fannie Mae loan for the acquisition Passco Cos. has purchased Cortona at Forest Park, a 278-unit community in St. Louis, from Invesco Real Estate. JLL… [](https://www.passco.com/passco-closes-on-largest-apartment-acquisition-in-passco-history/)![A view of the apartment complex situated at the intersection of two streets, showcasing its architectural design and surroundings.](https://www.passco.com/wp-content/uploads/2023/11/One-Riverwalk-1024x554.webp "One-Riverwalk - Passco Companies") [](https://www.passco.com/passco-closes-on-largest-apartment-acquisition-in-passco-history/)### [Passco Closes On Largest Apartment Acquisition In Passco History](https://www.passco.com/passco-closes-on-largest-apartment-acquisition-in-passco-history/) 303-unit Luxury Multifamily Community in Knoxville, TN trades for $120.7M Passco Companies, a privately held California-based commercial real estate company that specializes in acquisition, development, and property and asset management… [](https://www.passco.com/passco-sells-southwest-florida-community-for-102m/)![](https://www.passco.com/wp-content/uploads/2023/11/ParkCrest-Sale.png "ParkCrest Sale - Passco Companies") [](https://www.passco.com/passco-sells-southwest-florida-community-for-102m/)### [Passco Sells Southwest Florida Community for $102M](https://www.passco.com/passco-sells-southwest-florida-community-for-102m/) Goldelm has purchased ParkCrest Landings, a 400-unit community in Bradenton, Fla., for $102 million. JBM Institutional Multifamily Advisors represented the seller, Passco Cos. Arbor Realty Trust provided a $62 million… [](https://www.passco.com/7163-2/)![](https://www.passco.com/wp-content/uploads/2023/11/News_Header_Summer_Party-1024x554-1.jpg "News_Header_Summer_Party-1024x554 - Passco Companies") [](https://www.passco.com/7163-2/)### [Passco’s 25th Anniversary Celebration Continues in Style](https://www.passco.com/7163-2/) At Passco, we work hard and play harder! We continued the celebration of our 25 years in business with a spectacular summer party that left everyone buzzing with excitement. This… [](https://www.passco.com/passco-travels-back-in-time-to-celebrate-25th-anniversary/)![](https://www.passco.com/wp-content/uploads/2023/11/News_Header_25th_Anniversary-1024x554-1.jpg "News_Header_25th_Anniversary-1024x554 - Passco Companies") [](https://www.passco.com/passco-travels-back-in-time-to-celebrate-25th-anniversary/)### [Passco Travels Back in Time to Celebrate 25th Anniversary](https://www.passco.com/passco-travels-back-in-time-to-celebrate-25th-anniversary/) Passco Companies recently celebrated its 25th anniversary. To commemorate the occasion, the Passco team traveled from their Irvine headquarters to the site of the transaction that put the company on… [](https://www.passco.com/in-loving-memory-of-john-w-jack-fitzgibbon/)![](https://www.passco.com/wp-content/uploads/2023/11/Jack-Fitzgibbon-Headshot-2023.png "Jack-Fitzgibbon-Headshot-2023 - Passco Companies") [](https://www.passco.com/in-loving-memory-of-john-w-jack-fitzgibbon/)### [In Loving Memory of John W. “Jack” Fitzgibbon](https://www.passco.com/in-loving-memory-of-john-w-jack-fitzgibbon/) It is with heavy hearts that we announce the passing of our dearest friend and esteemed colleague, John “Jack” Fitzgibbon, Senior Vice President & General Counsel at Passco Companies. Jack… [](https://www.passco.com/dynamic-insights-multifamily-marketing/)![](https://www.passco.com/wp-content/uploads/2023/05/Stacy-Podcast-1024x576.jpeg "Stacy Podcast - Passco Companies") [](https://www.passco.com/dynamic-insights-multifamily-marketing/)### [Dynamic Insights: Multifamily Marketing](https://www.passco.com/dynamic-insights-multifamily-marketing/) Passco’s Senior Vice President of Corporate Marketing & Development, Stacy Stemen, joined Mike Wolber, Chief Revenue Officer at Rent Dynamics and Host of the Modern Multifamily Podcast for a live… --- ### [Terms and Conditions](https://www.passco.com/terms-and-conditions/) **Published:** January 8, 2025 **Author:** Sarah Pratt **Content:** ## Terms and Conditions for What’s New at Passco Alexa Skill **Accepting the Terms.** By downloading, accessing, viewing, installing, running or using (collectively, “**Using**” or “**Use**“) the App, you represent and warrant that you have read and understand these Terms. You also represent and warrant that you are age 18 or over and either (a) you are using the App yourself, or (b) you are using this App with a child under 18 in order to help the child learn, and you have the full power, capacity, and authority to accept these Terms and authorize the child’s use of the App. You further accept and agree to comply with the terms of use of any third-party software or application licensor accessible through this App. You may not Use the App if you (or your parent or teacher, if you are under age 18) do not agree to be bound by these Terms or if you are otherwise prohibited from Using the App under any applicable laws, statutes, ordinances, or regulations. You must have access to the internet, certain necessary software, and, if applicable, compatible mobile devices in order to Use the App. Fees and charges may apply to your use of the internet and, if applicable, the mobile services. You agree that you are solely responsible for any such fees. --- ### [Login](https://www.passco.com/login/) **Published:** November 16, 2023 **Author:** Allison Walton **Content:** ### INVESTORS If you are an investor with Passco Companies, please login here to access your information. If you need assistance with your username or password, please contact Investor Services at 949-442-1000 or [investorservices@passco.com](mailto:investorservices@passco.com "mailto:investorservices@passco.com"). ### REGISTERED REPRESENTATIVES Login here to access your clients’ information. If you need assistance with your username or password, please contact Investor Services at 949-442-1000 or [investorservices@passco.com](mailto:investorservices@passco.com "mailto:investorservices@passco.com"). --- ### [Connect](https://www.passco.com/connect/) **Published:** May 23, 2023 **Author:** Synoptek Web Dev **Content:** # Connect with Us ### PASSCO COMPANIES 2050 Main Street, Suite 650, Irvine, CA 92614 ### Send Us a Message Name(Required) First Last Email(Required) Phone DepartmentPlease Select OneAcquisitionsSales/MarketingAsset ManagementInvestor ServicesPublic RelationsVendor Inquiry Please complete our [Vendor Inquiry Form.](https://app.smartsheet.com/b/form/06878a182ed84854b587bfd070b9b870) Subject(Required) Message(Required) CAPTCHA --- ## Portfolio ### [The Griffon at Vero Beach](https://www.passco.com/portfolio/the-griffon-at-vero-beach/) **Published:** March 31, 2026 **Author:** Sarah Pratt **Project Categories:** Florida --- ### [Alara Promenade](https://www.passco.com/portfolio/altis-promenade/) **Published:** June 21, 2023 **Author:** Synoptek Web Dev **Project Categories:** Florida, State --- ### [Prism at Diamond Ridge](https://www.passco.com/portfolio/prism-at-diamond-ridge/) **Published:** February 17, 2026 **Author:** Sarah Pratt **Project Categories:** Pennsylvania --- ### [Tapestry Turfway](https://www.passco.com/portfolio/tapestry-turfway/) **Published:** June 16, 2025 **Author:** Sarah Pratt **Project Categories:** Kentucky, State --- ### [Prime Living of West Knoxville](https://www.passco.com/portfolio/trustwell-living-of-west-knoxville/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** State, Tennessee --- ### [Slate at Merrimack](https://www.passco.com/portfolio/8479/) **Published:** August 6, 2025 **Author:** Sarah Pratt **Project Categories:** New Hampshire --- ### [Encore](https://www.passco.com/portfolio/encore/) **Published:** June 4, 2025 **Author:** Sarah Pratt --- ### [Soltair Cypress Creek](https://www.passco.com/portfolio/tapestry-cypress-creek/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Florida, State --- ### [Tapestry Ridge](https://www.passco.com/portfolio/tapestry-ridge/) **Published:** January 31, 2025 **Author:** Sarah Pratt **Project Categories:** Kentucky --- ### [Chestnut Farm](https://www.passco.com/portfolio/chestnut-farm/) **Published:** October 28, 2024 **Author:** Sarah Pratt **Project Categories:** North Carolina, State --- ### [Cortona at Forest Park](https://www.passco.com/portfolio/cortona-at-forest-park/) **Published:** July 25, 2024 **Author:** Sarah Pratt --- ### [Sawgrass Point](https://www.passco.com/portfolio/sawgrass-point/) **Published:** July 25, 2024 **Author:** Sarah Pratt **Project Categories:** Louisiana --- ### [One Riverwalk](https://www.passco.com/portfolio/one-riverwalk/) **Published:** March 25, 2024 **Author:** Sarah Pratt --- ### [Canal 1535](https://www.passco.com/portfolio/canal-1535/) **Published:** March 6, 2024 **Author:** Sarah Pratt **Project Categories:** Louisiana, State --- ### [Springhouse](https://www.passco.com/portfolio/springhouse/) **Published:** June 21, 2023 **Author:** Synoptek Web Dev **Project Categories:** Kentucky, State --- ### [Velo Shelby Farms](https://www.passco.com/portfolio/velo-shelby-farms/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** State, Tennessee --- ### [TruNorth at Bulverde](https://www.passco.com/portfolio/trunorth-at-bulverde/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** State, Texas --- ### [The Henry at Fritz Farm](https://www.passco.com/portfolio/the-henry-at-fritz-farm/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Kentucky, State --- ### [The Fitzroy Chenal](https://www.passco.com/portfolio/the-fitzroy-chenal/) **Published:** June 21, 2023 **Author:** Synoptek Web Dev **Project Categories:** Arkansas, State --- ### [Park 35 on Clairmont](https://www.passco.com/portfolio/park-35-on-clairmont/) **Published:** June 21, 2023 **Author:** Synoptek Web Dev **Project Categories:** Alabama, State --- ### [One Hampton Lake](https://www.passco.com/portfolio/one-hampton-lake/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** South Carolina, State --- ### [Sea Glass](https://www.passco.com/portfolio/sea-glass/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Florida, State --- ### [Reserve at Nocatee](https://www.passco.com/portfolio/reserve-at-nocatee/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Florida, State --- ### [Sea Sound](https://www.passco.com/portfolio/sea-sound/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Florida, State --- ### [Aventine West Melbourne](https://www.passco.com/portfolio/aventine-west-melbourne/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Florida, State --- ### [Cadence](https://www.passco.com/portfolio/cadence/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Georgia, State --- ### [Lullwater at Jennings Mill](https://www.passco.com/portfolio/lullwater-at-jennings-mill/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Georgia, State --- ### [Grand Oaks at Crane Creek](https://www.passco.com/portfolio/grand-oaks-at-crane-creek/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Georgia, State --- ### [The Harrison at Braselton](https://www.passco.com/portfolio/the-harrison-at-braselton/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Georgia, State --- ### [The Mill at New Holland](https://www.passco.com/portfolio/the-mill-at-new-holland/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Georgia, State --- ### [The Atworth at Mellody Farm](https://www.passco.com/portfolio/the-atworth-at-mellody-farm/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Illinois, State --- ### [Sweetwater Apartments](https://www.passco.com/portfolio/sweetwater-apartments/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Louisiana, State --- ### [Tapestry Long Farm](https://www.passco.com/portfolio/tapestry-long-farm/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Louisiana, State --- ### [The Collins](https://www.passco.com/portfolio/the-collins/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Louisiana, State --- ### [Watervue](https://www.passco.com/portfolio/watervue/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Louisiana, State --- ### [The PARQ at Chesterfield](https://www.passco.com/portfolio/the-parq-at-chesterfield/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Missouri, State --- ### [Tapestry Northridge](https://www.passco.com/portfolio/tapestry-northridge/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** Mississippi, State --- ### [Enclave at Woodland Lakes](https://www.passco.com/portfolio/enclave-at-woodland-lakes/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** State, Texas --- ### [Lakeview Villas](https://www.passco.com/portfolio/lakeview-villas/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** State, Texas --- ### [Sapphire Bay](https://www.passco.com/portfolio/sapphire-bay/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** State, Texas --- ### [The Grayson](https://www.passco.com/portfolio/the-grayson/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** State, Texas --- ### [Tribute at the Rim](https://www.passco.com/portfolio/tribute-at-the-rim/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** State, Texas --- ### [Vecina Apartment Villas](https://www.passco.com/portfolio/vecina-apartment-villas/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** State, Texas --- ### [The Preserve at Catons Crossing](https://www.passco.com/portfolio/the-preserve-at-catons-crossing/) **Published:** June 22, 2023 **Author:** Synoptek Web Dev **Project Categories:** State, Virginia --- ### [Estelle](https://www.passco.com/portfolio/estelle/) **Published:** June 21, 2023 **Author:** Synoptek Web Dev **Project Categories:** Alabama, State --- ### [Riverhouse](https://www.passco.com/portfolio/riverhouse/) **Published:** June 21, 2023 **Author:** Synoptek Web Dev **Project Categories:** Arkansas, State --- ### [Legacy on the Bay](https://www.passco.com/portfolio/legacy-on-the-bay/) **Published:** June 21, 2023 **Author:** Synoptek Web Dev **Project Categories:** Florida, State --- ### [Ocean Walk](https://www.passco.com/portfolio/ocean-walk/) **Published:** June 21, 2023 **Author:** Synoptek Web Dev **Project Categories:** Florida, State --- ## Categories ### [Passco News](https://www.passco.com/category/passco-news/) --- ### [Upcoming Events](https://www.passco.com/category/upcoming-events/) --- ### [Thought Leadership](https://www.passco.com/category/thought-leadership/) --- ### [Passco Exchange](https://www.passco.com/category/passco-exchange/) --- ### [Conversations with the Experts](https://www.passco.com/category/conversations-with-the-experts/) --- ## Project Categories ### [State](https://www.passco.com/project-type/state/) --- ### [Alabama](https://www.passco.com/project-type/alabama/) --- ### [Arkansas](https://www.passco.com/project-type/arkansas/) --- ### [Florida](https://www.passco.com/project-type/florida/) --- ### [Georgia](https://www.passco.com/project-type/georgia/) --- ### [Illinois](https://www.passco.com/project-type/illinois/) --- ### [Kentucky](https://www.passco.com/project-type/kentucky/) --- ### [Louisiana](https://www.passco.com/project-type/louisiana/) --- ### [Missouri](https://www.passco.com/project-type/missouri/) --- ### [Mississippi](https://www.passco.com/project-type/mississippi/) --- ### [North Carolina](https://www.passco.com/project-type/north-carolina/) --- ### [South Carolina](https://www.passco.com/project-type/south-carolina/) --- ### [Tennessee](https://www.passco.com/project-type/tennessee/) --- ### [Texas](https://www.passco.com/project-type/texas/) --- ### [Virginia](https://www.passco.com/project-type/virginia/) --- ### [New Hampshire](https://www.passco.com/project-type/new-hampshire/) --- ### [Pennsylvania](https://www.passco.com/project-type/pennsylvania/) ---