Every decision we make in the development process is focused on our tenants health and well-being, the quality of our buildings, and the returns we provide our partners.
Build-to-core is a real estate strategy that is defined as developing a project from the ground up (“build”) and then holding the stabilized (“core”) property for the long-term.
This investment strategy offers six advantages including high yield returns and appreciation at a better basis with downside protection and greater tax efficiencies.
This is a popular strategy utilized by pension funds, family offices, public REITs and insurance companies to maximize both appreciation and cash flow.
High Yield & Appreciation
Our build-to-core strategy achieves the two biggest goals of real estate investing, growth and income. Our multifamily projects create substantial value through the development process. Ranta Group's goal is to provide an 18%+ IRR at stabilization for our opportunistic partners.
Hot Markets = Better Basis
Los Angeles is a red hot market and existing product is trading above replacement costs, even more so with our modular strategy. We look for a development spread (total cost to stabilized market value) of at least 20%.
A high degree of investment risk lies in the things we can't control. We can underwrite so many aspects of a deal but market forces can ultimately out-compete the most disciplined investor. The good news is that development spread can act as a cushion for unforeseen market events.
A build-to-core strategy offers many opportunities to structure smart, long-term tax efficiencies. We take the time to explore all advantages available for each project and work with our partners to optimize the best structure.
We are not there yet, but our goal is to reduce our total development time to 2 years from acquisition to Certificate of Occupancy. With shorter timelines and lower costs, our aim is to recycle 60-90% of our LP's investment to place in the next project and keep it earning.