Trion Expands Value-Add Reach With Second Fund

Trion Properties still sees plenty of opportunity in the value-add multifamily space. The firm is launching a second fund, planning to raise $50 million in equity to create $150 million in buying power. Like the firm’s last fund, Trion Multifamily Opportunity Fund II will focus on multifamily properties in well-populated West Coast markets near job centers; however, the second fund will also look to expand into growing West Coast markets and purchase larger multifamily assets.

“As with our previous fund, we plan to focus on targeting underperforming multifamily communities in supply-constrained, high-growth West Coast markets, including the San Francisco Bay Area, greater Portland area, Los Angeles, and San Diego,” Max Sharkansky, managing partner at Trion Properties, tells GlobeSt.com. While our strategy remains essentially the same, we will potentially acquire larger-size assets with this fund. We have also been looking to expand our portfolio into additional Western cities, including Salt Lake City, Seattle, and Denver, where we have found similar long-term growth fundamentals as our current markets.”

Trion Multifamily Opportunity Fund II launches as the firm’s first fund closes. Fund I had commitments from more than 100 investors and delivered returns exceeding 30% annually. Trion expects similar fundraising enthusiasm with its second fund. “Our target for this fund is $50 million in equity for $150 million in buying power, and we anticipate that the fundraising period will be approximately a year,” adds Sharkansky. “We are already seeing interest from several repeat investors as well as new equity sources.”

Trion has historically focused on major West Coast markets, with San Francisco, Portland, Los Angeles and San Diego being target areas. That won’t change with Fund II, even as the firm considers opportunities in other emerging markets. “We look for strong population growth, an increase in employment, and high quality of life—these are vibrant areas where today’s renters want to live,” Sharkansky says. “Since Trion Properties takes a hands-on approach at each of our communities and utilizes a vertically integrated property management platform, we have found it highly beneficial to concentrate our portfolio regionally in the West.”

The value-add multifamily space has become increasingly competitive this cycle, and opportunities—particularly in Trion’s target markets—are scarce, increasingly so as pricing continues to climb. Despite the competition, Sharkansky expects strong multifamily performance. “We are in a slow-growth economic cycle that has recently been bolstered by changes in economic policy and new employment opportunities. We expect well-positioned multifamily assets in continuously growing locations to thrive,” he explains. “While competition in the market is extremely high for these properties, due to our team’s several years of experience in the multifamily industry and close broker relationships, we are able to review off-market properties regularly, furthering our ability to acquire a resilient portfolio.”