Being able to force appreciation that leads to having multiple options on the exit are two of the main reasons VareCo focuses on value-add opportunities as opposed to building new construction, buying Class A, or stabilized properties. Investors in stabilized multifamily assets mostly rely on market-driven rent appreciation or cap rate compression to deliver yield. VareCo is able to force appreciation through its proven process of adding value to properties through renovations and operational efficiency through its property management team. Historically, VareCo has been able to complete 90%+ of the value-add process within the first 12 months of acquisition, which would not be possible without an in-house construction management team. This kind of speed allows VareCo to drive yield through execution rather than relying on market forces.
LivLavender Property Management is a wholly owned subsidiary of VareCo that has turned and leased over 3,000 value-add units above pro forma since 2014. VareCo believes the best way to have its property management team aligned with the motivation of its investors is to have property management in-house. Most third-party property managers are motivated to grow their bottom line. In contrast, VareCo’s team is motivated to grow NOI and maximize each properties potential.
VareCo’s construction management team has over 50+ years of combined experience covering every trade needed to execute any multifamily and single family remodel. Finding skilled labor continues to be the bottleneck in today’s construction industry. VareCo’s construction team is also fluent in Spanish which gives it a significant advantage in attracting, retaining and strengthening its relationships in the labor force. VareCo’s construction team also manages VareCo’s warehouse which stores all building and maintenance materials.