Market Values of Your Current Investments

Market Values of Your Current Investments

Investor · Newport Beach, CA · Member since 2019 · 190 posts · 176 votes

It's a difficult time to be an LP, particularly those that invested between 2021 and 2022. You're likely reading the headlines about commercial real estate distress and wondering how your investments are doing. Kudos to the sponsors that are being transparent but many sponsors are not, and continue to provide the "we are not distressed" messaging up until the day that they send a capital call request to investors. Unless it's a catastrophic capex related issue, the need for a capital call does not come up overnight for sponsors and neither should it for LPs. 

To help LPs wondering what the market values of their investments are today, I thought it would be beneficial to have a thread where LPs can ask for valuations on specific properties and the sponsors in this forum can opine. By no means would these be exact estimates and they should not be solely relied on but with high level information, I think most sponsors would agree that they could provide feedback fairly accurate assessments within +/- 5%. We subscribe to a market research platform called Yardi which only provides information on multifamily properties 50 units and larger so if you are invested in a property that is 50 units or more, I would happy to provide quick "back of the napkin" valuation and methodology. You can DM me as well but there are many experienced sponsors on this forum that I think collectively can provide valuable feedback across the whole country.

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Scott TrenchPro Member
Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
2y

What if BP went one by one with active syndicators, subscribed to this service, and performed the analysis on current portfolios? This could be valuable to LPs. We would have to make sure the Yardi team was ok with this first, however. 

@Lindsey Buxton - this might be super valuable for our PassivePockets product.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    do you look them up on yardi by simply putting in the situs address ?
  • Investor · Newport Beach, CA · Member since 2019 · 190 posts · 176 votes
    2y

    @Jay Hinrichs

    Yes. Yardi tracks vacancy and asking rents at each property over 50 units on a monthly, quarterly and annual basis. They also receive information on operational expenses through one of their loan servicer partners but I don’t find that to be entirely accurate. However, with tracking of rents and occupancy, I can at least ballpark pricing of a property in markets that I know.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Bobby Larsen:

    @Jay Hinrichs

    Yes. Yardi tracks vacancy and asking rents at each property over 50 units on a monthly, quarterly and annual basis. They also receive information on operational expenses through one of their loan servicer partners but I don’t find that to be entirely accurate. However, with tracking of rents and occupancy, I can at least ballpark pricing of a property in markets that I know.


    is that a paid for subscription ??
  • Investor · Newport Beach, CA · Member since 2019 · 190 posts · 176 votes
    2y

    @Jay Hinrichs

    Yes and pretty expensive, $10,000 to $20,000 depending on market coverage. Similar to Costar but more institutional. Yardi has better expense information while costar has better coverage of sub-50 unit properties and in my opinion, better qualitative reports.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Bobby Larsen:

    @Jay Hinrichs

    Yes and pretty expensive, $10,000 to $20,000 depending on market coverage. Similar to Costar but more institutional. Yardi has better expense information while costar has better coverage of sub-50 unit properties and in my opinion, better qualitative reports.


    Ok so how does the average LP use or get that information I don't think they are going to spend 10 to 20k for it?  . I get it how if your the GP that would be a reasonable business expense.   Again just curious.  I suspect the bigger commercial brokers probably subscribe so they can share with their buyers/sellers ??
  • Investor · Newport Beach, CA · Member since 2019 · 190 posts · 176 votes
    2y
    Quote from @Jay Hinrichs:
    Quote from @Bobby Larsen:

    @Jay Hinrichs

    Ok so how does the average LP use or get that information I don't think they are going to spend 10 to 20k for it?  . I get it how if your the GP that would be a reasonable business expense.   Again just curious.  I suspect the bigger commercial brokers probably subscribe so they can share with their buyers/sellers ??
    I doubt any LPs would subscribe to the service. I initial brought it up as an example of the type of current information I use to assess current market values which I would gladly provide feedback on properties. Very limited information is being communicated by sponsors, particularly those that used high leverage variable rate loans to acquire in 2021-2022, so LPs are commonly feeling left in the dark. Since there are a handful of good sponsors on here, I thought there could be a thread used as a resource for an LP to say “Hey, I invested in XYZ in 2021 and the sponsor is telling me everything is fine but I’m worried. What do you think the property/my investment is valued at today?”.
  • Scott TrenchPro Member
    Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
    2y

    What if BP went one by one with active syndicators, subscribed to this service, and performed the analysis on current portfolios? This could be valuable to LPs. We would have to make sure the Yardi team was ok with this first, however. 

    @Lindsey Buxton - this might be super valuable for our PassivePockets product.

  • Investor · Newport Beach, CA · Member since 2019 · 190 posts · 176 votes
    2y

    @Scott Trench

    I think that would be valuable to LPs. A member also contacted me and asked about current offerings as well. Similar to a private investment group, a crowdsourced peer review forum isn’t a bad idea either.

    I didn’t mean for this to be a Yardi promotion. Costar is another product that is useful as well. I was only trying to explain that a lot of us GPs have resources, along with obviously market expertise, to be able to provide quick feedback on specific investments.

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