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  • Steven Fletcher

Getting Granular

One thing we've experienced in expanding into a new market:


A learning curve.


Every city has countless sub-markets and within those are corridors that are unique and bring their own quirks/amenities into the picture.


It's very easy to drive a city over the course of a few days and occasionally pop out for a coffee.


But this will leave us with a baseline experience and unsure of our own underwriting.


We need to source the local’s perspectives on the location(s), integrate them, and then create our own thesis with this information.


Meaning, we need to understand:


-we can't go past X street without experiencing crime

-X corridor is the lifeline of the neighborhood

-what bars/restaurants are favored/hated by residents

-what areas are transitioning (and in what direction)

-how walkability decreases after X avenue

-where are target tenant base lives and why

-plans for future development or infrastructure (these can often take 10 years to materialize, don't be too early)

-the streets between X and X present a parking nightmare for residents

Our Process:


1.) Take extended trips to fully understand the market, sub-markets, and the residents within them. A lot can change in 100 yards and the quiet neighborhood we toured on a Wednesday night might turn into an NFL pregame location on Saturday.

Source the landmines in that market: Corridors plagued with crime, areas of low density, retail dead zones, and whatever else could antagonize our strategy.


2.) Create our baseline: Pull countless P&L's from listings, insurance quotes, assessment records, and old permits to form expectations for operating costs.


3.) Validate operating costs: contact local trash/landscaping/property management companies to confirm the $X charge listed on the P&L is on par for a building of that size (most of the time it isn't ha), leverage the assessor's office to nail the future tax bill amount, splice through insurance quotes to ensure competitive pricing, confirm permit processes and typical timelines (each city is different), source renovation costs on a per sq. ft basis (this takes time), etc.


4.) Take reps: create our map, source the assets within it that fit our menu, see who owns them, and underwrite them (even if they're not for sale).


5.) Assemble the team we'll need to operate.


6.) Keep our ear to the ground on local politics, property transactions (even if they don't fit our menu, it's good to know who's doing what in the city), new developments, and don't stop talking to brokers.


With enough reps, these processes get refined and ultimately allow us to move quickly (good things don’t sit).

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