SOURCE: American Coastal Properties

7 Second Strategies

October 09, 2013 08:29 ET

American Coastal Properties Secures $50 Million From Colony Capital, LLC and the Pritzker/Vlock Family Office

The Partnership Signals What ACP Believes Is the Next Phase of the Housing Recovery -- Finding Up-and-Coming Neighborhoods With Dated Housing Stock That Can Be Transformed Into Architectural, Design Homes or Townhomes

IRVINE, CA--(Marketwired - October 09, 2013) -  American Coastal Properties, LLC (ACP) has secured $50 million in funding from international investment firm Colony Capital and the Pritzker/Vlock Family Office to buy and redevelop single-family properties throughout coastal Southern California.

The partnership signals what ACP believes is the next phase of the housing recovery -- finding up-and-coming neighborhoods with dated housing stock that can be transformed into architectural, design homes or townhomes. ACP's strategy represents true in-fill development. It's beyond an arbitrary play in the marketplace and it requires deeper market knowledge and development experience in order to target properties that will enable ACP to build the right products with the right features at the right prices.

"The market for buy-to-rent housing and flips in Southern California is overcrowded and thus margins are compressing," said ACP President Nick Sinatra. "We've shifted our attention to what we believe is the future of real estate investment in this region over the next few years -- repositioning higher-end residential properties. This kind of investment takes more capital, more operational execution, and more vision than the traditional flip. We are providing the customer with a product superior to its competition in the marketplace."

ACP will focus on homes in highly sought after and traditionally stable coastal Southern California markets with especially tight supply due to limited construction and renovation in recent years. Each home is repositioned by adding significant value through construction and design (investing anywhere from 50 to 100 percent of the purchase price on renovations) before it is sold. Working with channel partners in architecture, construction and real estate brokerages, ACP will expand its efforts to provide some of the most sought after housing options in Southern California while also helping to stabilize local housing markets.

"There are plenty of investors who can buy a home in a mid-level Southern California market and invest 10 percent of the purchase price on upgrades and then sell," Sinatra said. "There are not as many investors possessing the operational skill and capital to do what we're doing with higher end homes here in Southern California."

Target areas include San Diego, Orange, and Los Angeles counties, where ACP plans to buy and reposition an estimated 40-60 houses per year.

About American Coastal Properties:

American Coastal Properties is a boutique real estate investment firm on the cutting edge of the real estate recovery. ACP specializes in repositioning properties in coastal California markets with the backing of significant capital. Their competitive niche is the ability to monetize the inefficiency resulting from low inventory, increased demand, and limited access to capital.

Learn More About American Coastal Properties

About Colony Capital:

Colony Capital, LLC is a privately-held independent global real estate investment firm founded in 1991 by Thomas J. Barrack, Jr. Colony Capital has an extensive global footprint and corresponding infrastructure, with over 250 employees operating in a total of 12 offices in the following 9 countries: China, England, France, Italy, Lebanon, South Korea, Spain, Taiwan and the United States. This global infrastructure provides Colony Capital's acquisition team with proprietary market knowledge, sourcing capabilities and the local presence required to identify and execute complex transactions. The firm has over $25 billion in assets under management.

Learn More About Colony Capital

About the Pritzker/Vlock Family Office:

The Pritzker/Vlock Family Office owns and manages a broad portfolio of public private equities, consumer, biotech, industrial and medical equipment and technology businesses, several venture funds, and real estate.

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