Urban Pacific Group Is Shifting to a Long-Term Hold Model

Developer the Urban Pacific Group of Cos. is shifting to a long-term hold strategy, following the success of its multi-generational housing model. The developer has become known for creating what it calls the urban townhouse, a five-bedroom multi-level for-rent unit that targets multi-generational families. The model has been successful, and as a result, Urban Pacific Group will begin holding assets long term.

“We had always planned to sell these projects through a merchant build-type model,” Scott Choppin, founder of the Urban Pacific Group of Cos., tells GlobeSt.com. “We have built the model and met the parameters that we needed to prove. I am so confident in this model that we are converting our latest project in Fullerton into a long-term hold, and everything that we build going forward, we are going to hold.”

The shift in strategy will also mean a shift in the company’s capital. Rather than relying on short-term construction debt, Urban Pacific has now entered the permanent loan world. The change could actually make it easier to land the funding it needs. “We are now in the permanent loan world, and I am getting a lot of interest in that world,” says Choppin. “All of the lenders that we work with are going with the rents that we would achieve at initial lease up. This is an opportunity to lend against new housing in a markets that have no new housing.”