MF Rebranding Starts With the Community

NEWPORT BEACH, CA—As GlobeSt.com reported last week, Thomas Bradford Communities, a newly formed company founded by Peter H. Thomas and Mitchell Bradford, plans to acquire $100 million worth of multifamily assets throughout the Southwest. TBC will have offices in Phoenix and Newport Beach. We caught up with Bradford to discuss the thought process behind the two offices and the firm's strategy for acquiring and redeveloping multifamily properties.

GlobeSt.com: What was the thinking behind the two different offices?

Bradford: The Phoenix market has been very active in multifamily. It consistently turns between 10% and 20% of its inventory annually. Because of the activity in that market, and because I grew up in that area and went to Tempe ASU, I know it well. To hit our target of $100 million invested in multifamily properties over the next couple of years, we are both active in the Phoenix market and the Orange County market. I'm based in Newport Beach, but the opportunities are less frequent and at lower cap rates. We're very selective about what we do.

GlobeSt.com: What elements do you look for in the properties you acquire?

Bradford: We look for properties that are mature, that probably haven't had a facelift for the last 30 years and have had the same paint, landscape and name that reflects that fact. We want to reposition them into something more vibrant and more eclectic. The urban eclectic vibe is very popular with Millennials right now. If and when we can find it in Orange County—near the Lab or the Packing District, for instance—we will be interested. Our business is in those walkable environments where empty-nesters to Millennials are moving, where their community is outside their front door and even outside of the apartment communities in which they live. Their business office may be a laptop at Starbucks. Wherever we can find that in Orange County is our goal. The Camp, across from the Lab, inspires you—from cute sayings in the parking lot to think positively, and that kind of inspiration is the same thing we're trying to do in our communities. We want to give people a great place to live in an environment that inspires them and make sure that's an experience they can enjoy for six months or 15 years—however long they're there.

GlobeSt.com: With so much competition for multifamily properties these days, how do you plan to compete in order to succeed?

Bradford: First of all, in a competitive environment, sometimes you have to look for the properties that may be a hidden gem. This may be slightly easier to do in the Phoenix market than in Orange County. At the end of the day, you find a property that's not completed to its full potential. It's all about relationships, and the teamwork component of our business is now just about our team, but whoever the property owner is and trusting that we will deliver on our promises with them. That includes completing the purchase. It's hard to set yourself apart in a landscape where the sellers want a lot of money and people are willing to pay that. We've done a lot of repeat business, which is more enjoyable than challenging. We're not alone—we have to be as strong financially, as capable and as adept in terms of getting the deal done as the next guy. But along the way, we are able to enjoy the experience rather than it being a grind.

GlobeSt.com: What is your renovation strategy for these properties?

Bradford: I look at a property like a community. It's a series of buildings with one access off a main street or a master plan like the Irvine Co. might build. Good streets, good amenities and good presentation when someone sees it off the street are important. So is a more up-to-date, modern name. We took a place in Phoenix called Shadow Tree and renamed it Arcadia Walk. Another property we just bought in the Mesa market was called Newport Mesa. We renamed it Urban Trails at the District. It's connecting it to the environment you're in and rebranding it, giving it a hip new name. When someone asks, “Where do you live?” you want to give them a name that they feel is cool and contemporary. This applies to their phone and their coffee drink, too. Everything we own in Phoenix is within three blocks of a Starbucks.

So, it starts with branding and bringing the name and website up to date. Then, we go to the community, painting and landscaping, adding Wi-Fi at the pool, a business center with an iPad and a Mac along with a PC. All these elements add to your reposition so that by the time someone comes to the community, they're sold. By the time they tour the apartment, they're already in. As long as you don't offend them by what you've done to an apartment, they're in. They're less concerned about granite vs. tile or white appliances vs. stainless steel. They live in the community, so our first areas of repositioning a property is the property itself; then we'll reposition the interiors of the units.

We focus on the interiors immediately with some very basic concepts. We've repositioned some class-B and –C properties where we upgraded vinyl flooring to wood vinyl flooring. We give our residents an opportunity to pick an accent wall color to match with their style or the furniture they like. We will upgrade plumbing or lighting fixtures. We begin to do those primary elements that are not wildly expensive, but create a clean, fresh new apartment. We don't feel it's necessary to spend that money right away because just repositioning the property and presenting a clean, fresh apartment creates some lift in rent. Then, we can begin to improve rents as time goes on.