Strategic Investments Approach: Our Investment Strategy

STEADY CAPITAL GROWTH THROUGH PRUDENT ACQUISITIONS

COMMITMENT.

EXPERTISE.

STABILITY.

At Krog Street Partners, we're dedicated to maximizing value for our investors, tenants, and the communities we invest in. How do we do it? Through strategic asset renovation, repositioning, amenity upgrades, and operational optimization programs.

We focus on Class B & C properties, sometimes referred to as Workforce Housing, and here's the key insight: these properties generally emerge through the natural aging of former Class A assets, creating a unique dynamic that inherently curbs supply growth.

Why does this matter? It's simple economics—limited supply fuels demand. With the aging of former Class A properties, cost-conscious consumers seek out more affordable Class B & C communities, presenting compelling opportunities for investors. This focused strategy aligns perfectly with our commitment to maximizing returns while minimizing risk.

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OUR TARGET MARKETS

Krog Street Partners is laser-focused on identifying the right markets for our investments. That’s why we only target growing towns and cities in the Southeast United States.

Within this large territory, we're drawn to a handful of cities that hold immense potential—Atlanta, Nashville, Knoxville, Chattanooga, Asheville, Raleigh, Charlotte, Charleston, Savannah, Jacksonville, Tallahassee, Orlando, Tampa, Montgomery, Huntsville, and Birmingham.

Property Class

We set our sights on Class 'B' or 'C' apartment communities—a strategy rooted in repositioning potential.

Value-Add Possibilities

We look for properties where at least 50% of units can undergo our value-add improvement program.

Property Vintage

Our sweet spot lies in properties built roughly between the 1980s and 2000s—a window that offers unique repositioning prospects.

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INVESTMENT CRITERIA

Asset Class & Property Type

Multifamily
Class ‘B’ or ‘C’ apartment communities with repositioning opportunities
At least 50% of units available for value-add improvement program
Year of initial construction roughly within the 1970s – 2000s

Leverage & Hold Period

60 - 70% LTV with maximum available I/O
Preference for fixed-rate facilities
Agency financing, Life Company, Regional Banks, and debt funds considered in a competitive process
Typical Hold 3 - 5 Years

Submarkets

Supply-constrained sub-markets / neighborhoods with high barriers to entry
Stable and diverse employers with attractive job growth rates and household income levels
Above 90% submarket occupancy with sustained positive net absorption and rental growth for the past 3 years.

Investment Size & Considerations

$5 - 30 million asset size
Positive trending T-3’s and T-6’s from T-12’s
Value-add properties with below market rents with common area improvement and in-unit upgrades
At least 25% below replacement cost pricing
No significant concession or bad debt over the past three years

Target Markets and Metros

Southeast United States
Broader markets of Atlanta, Nashville, Knoxville, Chattanooga, Asheville, Raleigh, Charlotte, Charleston, Savannah, Jacksonville, Tallahassee, Orlando, Tampa, Montgomery, Huntsville, and Birmingham
Class ‘B’ or ‘C’ apartment communities with repositioning opportunities
At least 50% of units available for value-add improvement program

Target Returns & Other considerations

Minimum 15-17% IRR (Project level – gross of fees, promotion, and tax)
7 - 10% average Cash-on-Cash over the Hold Period (Project level – gross of fees, promotion, and tax
Single assets are preferred over portfolio deals
Preference for off-market transactions
50 - 80 days close period from the date of receipt of deal information

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