Opportunistically following the path of progress in expanding gateway cities and emerging markets across the Eastern and Southern United States.
We consistently ask the following questions to reframe our thinking and ensure our focus on the highest value opportunities:
Rising population and urbanization trends continue to drive strong demand for multifamily housing, and our outlook for the next decade is that these trends accelerate.
Millennials, Gen Z and Boomer’s, the largest demographic groups, are increasingly choosing a rent-by-choice lifestyle for convenience and flexibility, creating increased and sustainable demand.
Supply-demand imbalances in many core markets create opportunities for multifamily development, especially in areas with limited housing inventory and high barriers to entry in the Northeast.
Long-term demographic shifts, including an aging population and increasing urbanization, suggest sustained growth potential for multifamily assets.
Historically, multifamily rental property investments have offered competitive risk-adjusted returns compared to other real estate asset classes.
The potential for capital appreciation, combined with consistent cash flow, provides a compelling investment opportunity.
Multifamily has historically demonstrated resilience during economic downturns, offering more stability and better risk-adjusted returns than other asset classes.
The rental market historically tends to be less volatile, as housing ranks at the top of the hierarchy of needs, despite macro-economic uncertainty, and the ability to reset rent rolls to market annually provides a baseline of economic performance across varying seasons of stability.
Our experience syndicating private capital, coupled with our experience managing institutional capital and joint ventures provides the foundation for how we manage and deploy capital into our real estate investments, with a focus on transparency and clear communication with our LP's and capital partners.
Average Net Investor IRR 1
Targeted Project Level IRR
Capital Deployed 2
Avg Institutional LP Net IRR 2
OZ Capital Deployed 2
Our deep conviction in multifamily is supported by strong population and migration trends, including a growing preference for renting over homeownership across all demographics, and the potential for superior risk-adjusted returns for our investors.
The United States is facing a significant shortage of housing, which is driving up demand for multifamily units. According to data from the National Association of Realtors, the country has been underbuilding housing for years, and is currently short 4,300,000 housing units, failing to keep pace with population growth and household formation. This undersupply is particularly acute in urban areas where land is scarce and development regulations are stringent, leading to a surge in demand for multifamily housing solutions as people seek affordable and convenient living options.
The undersupply of housing, combined with increased demand, has fueled inflation in housing costs across the United States. Data from the Federal Reserve Bank of St. Louis shows a steady rise in home prices over the past decade, outpacing income growth and making homeownership increasingly unattainable for many Americans. In such a market environment, multifamily housing presents an attractive alternative, offering more affordable rental options and flexibility for individuals and families facing escalating housing costs.
The loss of affordable housing units due to factors such as gentrification, urban redevelopment, and natural disasters has exacerbated the need for multifamily housing options. Research by organizations like the Urban Institute highlights the growing gap between supply and demand for affordable housing, with millions of low-income households spending more than half of their income on rent. Multifamily developments, including subsidized and mixed-income projects, play a crucial role in addressing this affordability crisis by providing diverse housing options that cater to a range of income levels.
Immigration and domestic migration patterns contribute to the increased demand for multifamily housing in the United States. Census Bureau data shows that both international migration and internal migration from rural to urban areas continue to drive population growth in cities across the country. As newcomers and migrants seek housing in urban centers, multifamily developments offer an attractive solution due to their affordability, proximity to employment opportunities, and amenities tailored to diverse lifestyles.
States like Texas, Florida, and California experience particularly high demand for multifamily housing due to population growth, economic vitality, and demographic trends. These three states alone will account for 40% of the future demand, and will require 1,500,000 additional housing units by 2035. Data from real estate analytics firms such as CBRE and Zillow indicates robust demand for multifamily units in major metropolitan areas like Dallas, Miami, and Los Angeles, driven by factors such as job creation, lifestyle preferences, and urbanization. These markets benefit from diverse rental demand, including young professionals, retirees, and families, making multifamily developments a lucrative investment opportunity for developers and investors alike.
Amidst demographic shifts and lingering pandemic-impacts on the population and broader economy, the U.S. faces a pressing need to build 4.3 million new apartments by 2035, according to a new study commissioned by the National Apartment Association (NAA) and the National Multifamily Housing Council (NMHC). (1)
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The Procopio Companies leadership and investments team is uniquely suited to lead through the next phase of our growth and are each personally financially invested in every project that the firm invests in, and in the general partner position of our funds.
Since 2020, our team and projects have received dozens of industry awards and national accolades for everything from design and technology to leadership and sustainability.
Our relationships are the bedrock of our business, and we are privileged to work with some of the world's best known private equity and institutional banking firms.
Our investments aren't made with a one-and-done approach, but with a clear focus on value alignment in order to form deep and ongoing relationships, suitable for long-term investing.
