We are apartment specialists. We do not buy or manage any other type of real estate asset—only apartments. Moreover, we focus exclusively on acquiring Class B and C assets and transforming them into higher-grade assets, working a segment of the market that is largely overlooked. We acquire mid-size, garden-style apartment communities that range in size from ten to 100 units, so we do not compete with the mom-and-pops buying four-plexes nor do we compete with the giant REITs buying apartment communities of 100 units or greater. We are a value-add investor, and we seek to transform every asset we acquire by rehabilitating the physical property and improving the financial management of the operations.
In most markets today there is a chronic undersupply of Class B and C rental housing, which is why we focus exclusively on these types of assets, where the majority of the working and middle class live. By rehabilitating these assets and turning them into attractive and desirable places to live, we capture the very best tenants in the markets in which we operate and as a consequence achieve the highest possible market rents. We focus on secondary markets where the chronic undersupply of Class B and C rental housing is most acute. There has been little to no new construction of these types of assets in these markets in many years—all the recent development of apartments has been of Class A luxury product in urban core markets like San Francisco and Los Angeles. Those urban markets are now becoming oversaturated with new development and vacancy rates are rising, while vacancy rates in our select secondary markets continue to decline.
The expertise we have developed over the past decade has served us extremely well, and we will continue to apply this laser-like focus to acquire value-add multifamily opportunities.