TruAmerica Completes Second Acquisition

LOS ANGELES-Robert Hart, former president of Kennedy Wilson Multifamily Management Group, launched a new multifamily investment firm, TruAmerica Multifamily. Partnering with the Guardian Life Insurance Co., the firm will acquire, rehabilitate and manage class-B and better multifamily properties in the West. The firm has just closed its second acquisition of the Avenel Apartments in San Jose for $38 million. GobeSt.com sat down with Hart to talk about the new firm, acquisitions and future goals.

GlobeSt.com: What were some of the multifamily market trends that inspired you to launch TruAmerica?

Robert Hart: What I saw that was different than any other cycle was a demographic shift in America away from single-family homeownership to multifamily, and I think it is changing due to urbanization, jobs and cost of energy. Gen-X and gen-Y want to have more flexible housing situations, so it is a permanent shift. That is really what motivated me because I think there is a demand for apartments and workforce housing for at least the next decade or more.

GlobeSt.com: It is interesting that you teamed up with a life insurance company on this new venture. Why was Guardian a good fit for you?

Hart: I had been partners with Guardian Life when I was at Kennedy Wilson, and they are very committed, long-term owners of real estate. They have a balance sheet of over $50 billion. They are a very stable company and very committed through their own corporate mission of investing in real estate and workforce housing, so there was a very good alignment between my values and what I wanted to accomplish and what they do.

GlobeSt.com: While developers are focusing on building multifamily properties, you are rehabilitating existing properties to target the same demographic. Do you see that as an evolution of this trend toward more communal housing?

Hart: There is the world of the developer, which is building mid-rise and high-rise urban housing that is primarily class-A for renters by choice. My focus is on the renter by necessity, which is more the blue- and grey-collar renter. Most of the stock in that area tends to be older, pre-1990 and tends to need more rehabilitation.

GlobeSt.com: What are some of the major renovations you are performing on these buildings?

Hart: Most of it is aesthetic. It tends to be paint treatments, landscaping, refurbishing or adding leasing offices and adding fitness centers or some common area for congregating. We also update the interior of the units with new surface countertops and faux hardwood floors to really upgrading the aesthetic quality of the units. We try to make them compatible to new campus-style construction.

GlobeSt.com: What markets are you finding the best opportunities?

Hart: Our strategy has been to focus in the coastal markets: Southern California, Silicon Valley, Portland and Seattle. In order to compete, sometimes we are buying properties not in the immediate urban core, but around these core markets, as long as they are job- and transportation-centric. We are always looking for properties to be close to transportation.

GlobeSt.com: What are your goals for the next year?

Hart: We are currently under contract to close five properties, three in Seattle, totaling 600 units, another in San Jose with 200 units and one in Denver with about 700 units. This year, we have set the goal of doing $300 million, but we will probably do $500 million in our first year of operation. We hope to double in size within the second year—so to be at about $1 billion. We will focus on the same Western major metropolitan and coastal markets.