Looking to discuss / get recommendations on an interesting (and seemlingly new) investment strategy that is growing in the multifamily space.
The strategy (as its name suggests) is to buy a newly constructed assets that are not stabilized. You get a brand new asset at a discounted price, and assume the lease-up risk. The seller (developer) can cash out early/move onto the next project, all while taking advantage of the current seller's market. The agencies won't extend permanent financing below 70% occupancy (though some programs for this strategy do exist), so you need to get creative with debt (we have typically looked at bridge loans). These deals are not common, but they exist. Developer's who have the most control over their capital stack are usually the ones that are willing/able to trade.
Has anyone had experience with these kind of deals. As the value-add market becomes more and more saturated, my firm is looking into other options. This seems like the greatest risk-adjusted return right now. The problem is these opportunities are rare. With that said, does anyone know any operators/sponsors who focus on this?