New Construction Below Replacement Cost. Value-Add in Prime Locations.
We lean into the dislocation happening in the market. Debt repriced faster than sellers repriced equity, insurance and regulatory pressure are pushing out a generation of mom-and-pop owners, and merchant builders are handing back keys as loans mature. Buyers with certainty of close are scarce at exactly the moment basis is best. Supply is constrained, replacement cost keeps rising, and California has spent five years writing legislation that lets owners add units to land already owned. Most sellers cannot execute on it. We can.
Two Strategies, One Operating Playbook
Strategy I · New construction below replacement cost
Acquire completed and near-complete multifamily from maturing construction loans and capitulating developers, below today's replacement cost, with no entitlement or build risk and immediate lease-up economics.
Strategy II · Value-add in prime locations
Buy discounted Class C buildings in Class A California submarkets, add density and renovate units, and mark rents to market, the playbook behind our realized track record.
ADU legislation as a value-creation tool
California's ADU and SB 9 framework lets us add rentable units to properties we already own, at a fraction of ground-up cost and without buying more land. It is written into the business plan on nearly every acquisition.
Positive leverage on day one
We only buy assets where going-in yield exceeds our cost of fixed rate debt at closing. Cash flow day one, no rate-cut assumption, no rescue refinance in the model.
Real room to grow NOI
Every asset is bought with a measurable gap between in-place and market income, closed through unit renovation, added units, expense control, and hands-on management rather than market appreciation.
New Construction Is Trading Below Replacement Cost, and Class C Buildings in Class A Locations Are Deeply Discounted
Construction debt priced at 2020 to 2021 rates is resetting. Projects underwritten in the low-rate era are completing into a different capital market, and sponsors cannot refinance at today's cost of capital.
Completed or near-complete assets lease immediately, so return on cost is visible at acquisition, not projected years out, with no entitlement or construction risk.
In coastal Southern California, the land under an older building is often worth more than the building itself. Rate-driven repricing has pushed Class C assets in prime submarkets to their widest discount in years.
Coastal zoning and construction costs cap new supply while the rent gap to renovated product keeps widening. This is the strategy behind our 42 realized exits at a 1.72x weighted equity multiple.
Institutional Reporting and a Team That Operates What It Buys
Sourcing a deal is the easy part. What separates operators is what happens after closing. Our reporting, controls, and accounting were built to the standard institutional allocators audit against, and our acquisitions and asset management teams are staffed and working today, on assets we already own.
Monthly operating reports, quarterly ownership packages with full financials, asset-level budget-to-actual variance, and audit-ready books.
Our finance function is led by a CFO with Big Four fund-audit experience across institutional real estate and alternative asset managers.
Dedicated asset managers and property operations who take over at closing and own the business plan through stabilization and exit.
A full-time sourcing and underwriting bench covering California product, with the discipline to pass on far more than we buy.
Investment Parameters
Venture-level targets, not guaranteed.
*Venture-level targets, not guaranteed. Targeted returns are objectives only, are based on assumptions the Sponsor believes reasonable, and actual results may differ materially. Final terms are set per venture.
How We Structure and Execute a Joint Venture
Introduce the Opportunity
We present a qualified, off-market asset with underwriting, business plan, and projected returns.
Align on Terms
We agree JV structure, equity split, promote, and governance under a term sheet.
Diligence & Close
Full data room, third-party reports, and financing, executed on an institutional timeline.
Execute the Plan
We reposition the asset and direct property management, growing NOI against a defensible basis.
Report & Realize
Disciplined quarterly reporting through a planned exit or refinance, returning capital plus preferred return.
A Direct Partnership With the Principals
One capital partner per transaction, in a direct single-asset joint venture rather than a blind pool or syndication. Trellis invests its own capital alongside partners in every venture it sponsors.