MC Companies Strategy over the last few years has been a lot of value-add deals. However, now that the market is changing, we are increasing our new construction projects. Here’s why we like both types of deals.
New construction has some key advantages over existing construction. The biggest one currently is that cap rates on new construction are much better than on existing buildings. This is mainly because MC companies both builds and manages our projects in house. In addition, migration patterns have sped up since the pandemic began. Notice we said sped up and not changed. Almost all of the migration we are seeing now, we were already seeing before, but it has been accelerated. This wave of migration allows us to find locations that are growing beyond their rental supply and create properties where there is a need.
However, we also love value-add properties. They are how we grew our company. The great part about value-add is that it offers so much opportunity. Typically, value add deals are mismanaged and the current owners need out. This can be for a variety of reasons. They may need the money, or aren’t charging enough to cover their costs. Our team has developed a knack for identifying the potential in a property. An advantage MC Companies has is that we manage our properties in-house, so we thoroughly understand rental rates. Our management team studies the numbers and looks for where the current management is missing valuable income. If you have any questions about investing or the projects we invest in, please make sure to email us. InvestorRelations@mccompanies.com
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