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Lloyd Jones Names COO of Property Management

MIAMI — Lloyd Jones has named Steven Druth its chief operating officer of property management. Druth brings over 30 years of real estate experience to the Miami- based, real estate private equity firm.

As a commercial brokerage and management specialist, Druth operated his own Boston based firm for ten years before moving to Manhattan’s largest independent real estate agency.

“I am very excited about my expanded role at Lloyd Jones and look forward to further increasing efficiency and resident satisfaction at all of our properties,” said Druth.

Throughout his career, operational efficiency and strategic leadership have been the trademark skills that Druth will now add to the Lloyd Jones executive team.

“I’ve known Steve for many years and his people management skills are exceptional,” said Lloyd Jones chairman, Chris Finlay. “With his extensive experience in our industry, I am very confident that he will take our operating platform to a new level.”

 

About Lloyd Jones

Lloyd Jones is a private-equity real estate firm that specializes in the multifamily and senior housing sectors. Building on thirty-eight years in the real estate industry, the firm acquires, improves, and operates multifamily real estate in growth markets throughout Florida, Texas, and the Southeast. Its investors include institutional partners, family offices, private investors, and its own principals.

Choosing a Real Estate Investment Partner? Six Questions to Ask

Before you entrust your funds to a real estate investment partner, ask some questions.

First: Is your real estate investment partner an Allocator or an Operator? There is a big difference.

Allocators distribute capital on your behalf to Operators. Allocators seek the best operators and invest, on your behalf, in whatever funds and deals operators bring to them. Allocators make sense if you are a pension fund (or similar) with no expertise in real estate investment. You are basically outsourcing that function and knowledge; however, it comes at a cost. You have no input in asset selection or fund strategy. And of course, the Allocator charges fees. This adds an additional layer of costs to you, and these fees come out of the investment thus reducing your returns. An Operator, on the other hand, is the preferred solution if you have the resources to analyze a specific fund or an individual deal. If you invest directly with a real estate operator, you will not only save a layer of expensive fees, but also get to choose a fund investment strategy, (or particular asset), its geography, investment term, and even the potential returns. But be careful how you choose an operator. They are not all the same.

Six questions you should ask your operator:

  1. Focus. What asset class do you specialize in?

If the answer is “retail, industrial, and student housing…” Run! An operator must be an expert in a specific asset class.

  1. Market. What markets do you specialize in?

The same applies to markets. A real estate operator must have a physical presence in the target market to really understand its nuances and trends.

  1. How long have you been in business? In the specific asset class? In the specific market?

Experience is priceless.

  1. How many economic cycles have you experienced? How did you weather the market crashes of early ’90s and ’08?

Real estate is great while the market is booming. Does your operator know what to do in a crash?

  1. Who manages your investment properties? Do you outsource to a 3rd party management company?

There is no substitute for your own, on-site management of your assets. As a wise farmer once told me, “The best fertilizer is the farmer’s foot on the soil.” This applies to property management, as well. You must have your foot – and your hands, eyes, and ears — on the property, at all times. The 3rd party manager has no skin in the game. It’s not his money at risk if there is a budget shortfall.

A word about property management: It is local, hands-on, and very difficult – and probably the most important aspect of a real estate investment. Your management team, especially at the site level, is critical to your property’s success. Few investors/operators pay enough attention to this fact. Let me assure you, it’s very, very difficult to assemble the right team. I can hire 1,000 financial analysts more easily than one, excellent on-site property manager. It’s that hard.

  1. How much of your own money are you putting in the deal?

Most sophisticated investors want to see the operator have money in the deal. It gives them comfort knowing that if the investment is not successful, the operator will share the pain.

At Lloyd Jones Capital, we always invest alongside our real estate investment partners, but, in fact, maintaining our good reputation and strong track record is what motivates us to succeed. With the transparency in the market today, an operator’s reputation is far more valuable than his money.

In summary, when choosing a real estate investment partner, ask these questions and remember:

Real estate is local and hands-on. Your partner should be, too.

Christopher Finlay is Chairman/CEO of Lloyd Jones Capital, a private-equity real estate operator that specializes in the multifamily and senior housing sectors. Headquartered in Miami, the firm acquires, improves, and operates multifamily real estate in growth markets throughout Texas, Florida, and the Southeast. Its affiliated management group is an Accredited Management Organization (AMO®) with a thirty-five-year history in multifamily real estate.

Lloyd Jones Capital Announces Vice President of Acquisitions

Private Equity Real Estate Firm Expands Its Texas Presence

MIAMI – Lloyd Jones Capital, a Miami-based multifamily investment firm, has announced the appointment of Neil Bertrand, vice president of acquisitions. Neil will lead the company’s acquisition effort for the Texas market.

“The addition of Neil to our team is instrumental as we continue to seek acquisition opportunities in Texas, one of our key strategic markets,” commented Chris Finlay, Lloyd Jones Capital, chairman and CEO.

Neil Bertrand’s 20-year real estate career includes positions with four of National Multifamily Housing Council’s Top 50 Firms. Throughout the course of his career, Neil has been responsible for the oversight of conventional, tax credit, senior housing, and student housing portfolios. Neil has led projects including acquisition analysis, due diligence, renovation, new construction, and lease-up of assets in Texas, Arizona, New Mexico, Oklahoma, Louisiana, Arkansas, Missouri and North Carolina.

“I am excited to join the Lloyd Jones Capital team. With a successful history of more than 35 years in real estate, the company continues to produce positive results for its investors. Leading the state’s acquisition efforts should yield long-term results as Texas continues to lead the nation in employment growth,” remarked Neil Bertrand.

Neil attended Lubbock Christian University in Lubbock, Texas, and holds the Certified Apartment Portfolio Supervisor (CAPS®) designation from the National Apartment Association. He is also an Accredited Residential Manager (ARM®) and a Certified Property Manager (CPM®) Candidate with the Institute of Real Estate Management.

About Lloyd Jones Capital

Lloyd Jones Capital is a private-equity real estate firm that specializes in the multifamily sector. With 37 years of experience in the real estate industry, the firm acquires, improves, and operates multifamily real estate in growth markets throughout Texas, Florida, and the Southeast. Lloyd Jones Capital provides a fully integrated investment/operations platform.  Its property management arm partners with the investment team to provide local expertise in each of its markets.

Headquartered in Miami, the firm has offices throughout Texas, Florida, and the Southeast, plus New York City.  The firm’s investors include institutional partners, private investors, and its own principals. For more information visit: lloydjonesllc.com.

Lloyd Jones Capital Acquires Jacksonville Apartment Community

MIAMI –  Lloyd Jones Capital, a Miami-based multifamily investment firm, has acquired the Deerwood Park apartment community in Jacksonville, Florida. The property is located in the Deerwood Office Park on Touchton Road, home to 5.2 million square feet of office space and the largest employers in the MSA. Residents of Deerwood Park enjoy an address that offers a live, work and play lifestyle in Southside, one of Jacksonville’s most desirable neighborhoods.

The 282-unit acquisition brings the Lloyd Jones Capital multifamily portfolio to nearly 5,000 units spread across Texas, Florida, and the Southeast.

“We are elated with the acquisition of Deerwood Park. Jacksonville is a key market for us and Deerwood Park is a value-add asset with tremendous upside opportunity,” commented Chris Finlay, chairman and CEO of Lloyd Jones Capital. “Lloyd Jones Capital plans to enhance the property with a value-add program that we anticipate will yield rent and occupancy growth for our investors.”

Built in 2002, the gated property offers one-, two-, and three-bedroom apartments with highly sought-after amenities including attached garages, a resort luxury style pool, outdoor kitchen with gas grills and a dog park.

Deerwood Park will be managed by Finlay Management, the operations group at Lloyd Jones Capital.  Finlay Management is an Accredited Management Organization (AMO®) as designated by the Institute of Real Estate Management (IREM®) and has a 37-year history in the industry.

About Lloyd Jones Capital

Lloyd Jones Capital is a private-equity real estate firm that specializes in the multifamily sector. With 37 years of experience in the real estate industry, the firm acquires, improves, and operates multifamily real estate in growth markets throughout Texas, Florida, and the Southeast. Lloyd Jones Capital provides a fully integrated investment/operations platform.  Its property management arm partners with the investment team to provide local expertise in each of its markets.

Headquartered in Miami, the firm has offices throughout Texas, Florida, and the Southeast, plus New York City.  The firm’s investors include institutional partners, private investors, and its own principals. For more information visit: lloydjonesllc.com.

 

Skip the Flip in Multifamily Investment

It’s time to go long.

Historically, multifamily investment has been about long-term, cash-flow returns. However, in recent years, as the industry caught the eye of private equity, the emphasis turned to a property’s IRR or Internal Rate of Return.

The “fix and flip”, the “value-add” became the standard: short hold, quick fix, big return. And the multifamily real estate buying frenzy began. The strategy has proved to be very profitable over the past five or six years, but in my opinion, those days are (almost) gone – for several reasons.

TODAY, THERE’S NOT ENOUGH MEAT left on the bones of C and B properties to ensure investors of increased rents and resultant returns. The fix and flip strategy had been to buy an apartment community and execute a “value-add” to approximately 20% of the units, thus leaving “meat on the bone” for the next investor. At the same time, the investor would raise the rents to cover the cost of the improvements. So rents increased, NOIs rose, prices went up, and the buying frenzy continued.

The next investor then thought he could upgrade another 40% of the units. But in fact, as cap rates fell and he had to pay more for the asset, he had to rehab 70% or 80% to reach his hurdles, leaving almost nothing left for the following investor. Consequently, today, after a couple of “flips”, most “value-add” deals don’t make financial sense.

RENTAL RATE INCREASES  Because of demand, rents have risen sharply in nearly every market, but according to economists, that increase should moderate to about 3.5 to 4% due to new construction coming online. Consequently, investors cannot assume drastic rent increases in their acquisition proformas. If it doesn’t work now, it won’t work in the future.

THE ECONOMY:  We’re long into our economic expansion cycle having exceeded the historic five-year average, but today in the US, growth is virtually stagnant. Are we reaching the peak? The good news is that multifamily real estate will continue to be among the strongest asset classes (if not #1) for reliable, steady returns regardless of the stage of the economic cycle. Why?

DEMAND: There is still an unfulfilled demand that is expected to be with us for a long time. That is the multifamily investment’s ace in the hole. Seventy-five million millennials plus another 75 million baby boomers. The multifamily rental business is poised to perform better than any other asset class. We have all read about millennials and their student loan debt and inability to afford a home. I personally think it has little to do with money. It’s about lifestyle, flexibility, and priorities. Young people want flexibility to move to that next job; they want amenities and social interaction. A house is not a priority to them. Retiring baby boomers, on the other hand, have “been there; done that.”  They are ready to free themselves from the burdens and expenses of home ownership. Whatever the reason, more people are renting today than at any time in the past 51 years.

INTEREST RATES: This brings us to interest rates – a very key and important ingredient in real estate investment. Who knows what might happen next? Answer: Nobody. One thing we do know: there’s little likelihood of a reduction in interest rates, although it’s not impossible. In Europe, where the real rate is in negative territory, some banks are considering storing money in their vaults because of the negative yields. It costs them money to make loans! And the US is getting close to that level. (See my blog post from June 14, 2016, titled “Is it time to keep your money under the mattress?“) But luckily for the multifamily investment industry, this big question mark can be taken off the table. We can counter the risk by locking in fixed rates today. We know what our debt will be for the duration of our investment.

So what does all this have to do with “going long”?

Multifamily investment is probably the most stable, reliable investment one can choose. But the strategy has changed. It’s time to “go long.” Forget about the unrealistically high-return value-adds so prevalent at the beginning of this cycle. They no longer exist. Lloyd Jones Capital recommends buying quality properties that produce consistent cash flow. Focus more on yield than IRR. Consider a long-term hold and do not over-leverage. Then, assuming good management, you should enjoy a reliable, long-term return on your investment.

Christopher Finlay is Chairman/CEO of Lloyd Jones Capital, a private-equity real-estate firm that specializes in the multifamily sector. With 35 years of experience in the real estate industry, the firm acquires, manages and improves multifamily real estate on behalf of its institutional partners, private investors and its own principals. Headquartered in Miami, the firm has operations throughout Texas, Florida and the Southeast. For more information visit: lloydjones.wpengine.com.

A Recap of Lloyd Jones Capital’s CEO Panel Discussion

The Lloyd Jones Capital team had a great time networking with other investment firms and more importantly, investors from around the world, at Opal Group’s 2016 Real Estate Investors Summit. Our firm had a booth where we connected with investors and shared our strategies in regards to real estate investing, previous deals and the types of returns we have achieved for our clients.

In addition to the networking and social events, our Chairman and CEO, Chris Finlay, was asked to speak on a panel on the first day of the summit about investment strategies and styles. During this panel, Dean Crombie, the moderator and Senior Trustee at New Hampshire Retirement System, asked a lot of good questions about the real estate market. Some of the questions included: Where are we in the real estate cycle? What types of multifamily strategies are investment firms using? In what state is multifamily real estate booming?

A few keynotes our CEO mentioned on the panel:

– The key to real estate investing is good management and not over leveraging.

– Class C real estate is the last to be affected by a recession and the first to rebound, providing low risk.

– While the oil bust is hurting some areas in Texas, many other parts, including Houston, are thriving with an influx of new residents, who all need places to live.

– South Carolina is a state that Lloyd Jones Capital focuses on because of the thriving job growth and population growth. These are indicators that rental demand will be high.

– Many different demographics are choosing to rent and there is a lot of new data proving Millennials are driving this trend. This movement is another positive indicator for the multifamily real estate market.

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