Something a bit different

When working at The Preiss Company, it is typical to hear about the many properties we acquire on a monthly basis. From Atlanta to Las Vegas, it seems like we are constantly purchasing exciting properties and developments to add to our portfolio. 

Today, I come to you with something a little different. Preiss has obviously made its mark in the student housing industry since its inception, but with time it has decided it was time for new growth and development. With this in mind, I would like to introduce you to our first ever multifamily conventional deal, The View at Legacy Oaks in Knightdale, NC!

Now, if you are anything like me, you might be having some questions about what makes this property acquisition different from previous ones, or how this may change our company long-term. To clarify the questions I assume most of us have, I decided I needed to speak directly with the people who were involved in this process. I had the pleasure of meeting with Adam Byrley, our COO, and Ethan Lewis, a financial analyst on our New Business Development team. 

My first question here really was...well...why conventional multifamily? If we have our feet set into the ground in this industry, why dip our toes in the water? I wasn’t underwhelmed by Adam’s answer. “Student housing was our focus,” he said. “It was so hot from a transaction perspective that we had plenty of it to fill our pipeline. But, Covid hit, and student housing fell off a cliff for a little bit, nothing to buy or sell.” Adam proceeded to explain that with this door creeping shut, we were given the perfect moment to explore multifamily deals to help hit budgets and keep the revenue coming in. 

Not only was timing on our side, but fate as well. Crow Holdings, an extremely valued equity partner of ours, came to us looking for a deal to invest in. Basically, they said Hey, we raised all this money we need to invest, would you be interested in conventional multifamily? The rest is truly history. “It was a really natural fit for us,” Adam said. “Especially with Raleigh in our backyard. With our experience in this market, Crow having money to place, and our need to transact and make income, it was a perfect storm.” 

So, when all is said and done, how is multifamily so different from student anyways? Really...why is this such a big deal for us? I came to find that the differences actually start to come into play from the very beginning of the acquisition process: the underwriting, which is where the magic happens in creating a business plan for properties we are interested in purchasing. “We had to completely build a new financial model to underwrite multifamily deals in the right way,” says Ethan as he recalled the beginning of this process. “We had to build a model that could work with factors that varied from those we often find in student housing.”

Factors such as new, wider demographics, having to manage lease expirations year round, and by the bed versus unit leasing all contribute to making this deal stand out amongst others we have had in the past.

So once the underwriting is completed, NBD takes their work and gives it to Adam and the PM department, as well as the Construction Management team. At this time, they go over the business plan and apply their experience in property management to fine tune where they see fit, even if that means taking a look at the property and the market themselves. “It makes underwriting visions come to life when we talk with PM and Construction Management,” said Ethan, “and that was something really cool to see, especially with this new type of asset class.” 

It is clear that with this exciting growth Preiss has taken on, there will be some learning curves to face along the way. Rest assured, Adam expressed that we actually have a leg up. “If you can do student housing, it’s a fairly easy transition to conventional housing. But, if you do conventional housing, you can’t just easily come into student. I think we can apply the student concepts we know to conventional housing and really drive value, here.” Even with having to change the way we operate some, we know that good property management is still good property management, and that is something Preiss has had figured out for quite some time. 

Now, what does this mean for the future of Preiss? For now, it just means we are jumping into something new. We are choosing to face challenges with mobility and pride. “I am excited to do something new, to challenge us a little bit,” said Adam. “We have gotten pretty good at the student thing. We have the talent and the skillset to branch out and do something different in order to ensure our company’s growth.” Adam hopes this will lead to something even larger, potentially a new section of Preiss all together. “We think we can grow this section of our business, and there may be an opportunity for us to say we have ‘Preiss Student’ and ‘Preiss Residential’...two divisions.”

I don’t know about you, but all this excitement has left me feeling hopeful and eager to see how our future in the multifamily market plays out. With the impact we have made in the student housing industry thus far, I don’t see anything stopping us from dominating the multifamily industry as well. Thank you to Adam, the PM Leadership team, the New Business Development team, and the Construction Management team for seeing the potential our company has for such large growth, and for allowing us to take this step in bettering our industry as a whole. View at Legacy Oaks, we can’t wait for you to be a part of Preiss!