NEWS
JSQ Commercial of Hinsdale, IL has raised $36.5 million to develop multifamily properties throughout the United States in a joint venture with Watermark Residential of Indianapolis, IN, a subsidiary of Thompson Thrift of Terre Haute, IN. The group is targeting 7-9 development projects to be underway by the end of 2014, with a total of approximately 2,000 units and portfolio value of $160 million. Developments will range in size from 200 to 400 units. Thompson Thrift/Watermark will provide development and construction expertise, as well as leasing and management services.
The first 270-unit project broke ground in June in Louisville, Kentucky with completion expected in October 2013. JSQ anticipates that two additional projects will start construction before the end of the year.
As cap rates have compressed for existing multifamily product, ground-up development has become an attractive investment alternative. The combined real estate, development and construction expertise of JSQ/Watermark enables the partnership to identify, thoroughly analyze and underwrite development opportunities that provide an attractive spread between yield to cost and existing cap rates.
“The development strategy relies on the expertise of JSQ and Thompson Thrift/Watermark in site selection, efficiency of design and cost effective construction,” says Thomas Murphy, President and CEO of JSQ Commercial. “Combining the resources of the two entities enables us to provide a top quality product in high barrier entry suburban locations at a competitive price. JSQ’s investors benefit from an investment process that is continuously managed by partners with in depth real estate expertise. This hands- on management of process minimizes investor risk while enhancing investor return.
JSQ’s Fund I, a $26.5 million fund targeting office and industrial acquisitions, focused on the Chicago metropolitan market. This new national strategy permits JSQ to expand its development and investment footprint beyond Chicago to markets across the U.S.
“Unlike most other property types, the fundamentals of multifamily- short supply, increased demand and a shifting ownership culture -continue to strengthen and support the prices investors are willing to pay for these assets. Our products innovative design and construction make this property model even more desirable.” Murphy explains.