Over the last couple of years, apartment developers have consistently said finding institutional equity has been their biggest hurdle to starting new projects on a deal-by-deal basis.
In this environment, access to a repeatable source of capital can be extremely helpful. With an announcement on Sept. 24, Thompson Thrift is once again working to assemble a ready source of funding.
“I think in this landscape, it's a pretty obvious competitive advantage from a capital perspective,”
JR Plyler, chief investment officer of Thompson Thrift, told Multifamily Dive. “Nonetheless, we still have to go and execute and prove that we're worthy of continued investment with our investors.”
The Indianapolis-based firm announced it was launching its ninth multi-project development partnership, Thompson Thrift 2027 Multifamily Development, LP, to raise approximately $200 million to $230 million in total capital commitments to develop class A multifamily communities, according to a press release.
“It's become somewhat of a habit at this point and muscle memory,” Plyler said. “Every year we come out with our flagship series. And now's the time when we announce our deals, and that's what we're doing.”
Thompson Thrift sees an opportunity to develop in a market with limited new supply. While the supply wave is lasting longer than many observers expected, it’s starting to slow in many markets, according to Plyler. With people getting married later and renting longer, he anticipates a strong rental recovery.
“Even though concessions may hang around, we see top line rents starting to stop their retreat,” Plyler said.
Moving westward
The Thompson Thrift partnership has identified six development opportunities across Colorado, Kentucky, Arizona, Nevada and Montana, including its first multifamily project in the latter state.
“We have a massive presence and history in Colorado,” Plyler said. “Using that as a launch into other Western markets is a natural extension of what we've done and what we continue to do in the Front Range in Colorado.”
Thompson Thrift looks at going into markets where it sees strong fundamentals but institutions may see risk. With strong occupancies and low unemployment, Bozeman, Montana, meets the developer’s criteria, according to Plyler.
“It's an emerging market, but it's also one of the markets that has one of the highest home prices from a single-family perspective, nationally, which is just kind of ripe for that own-versus-rent dichotomy,” Plyler said. “All that put together is the type of a market that we look for that may be overlooked because of just pure market size.”
With the expansion, Thompson Thrift will continue adding to the number of units it has built over the past 40 years. It has invested more than $7.3 billion since its founding. Since 2010, it has started more than 27,000 units and deployed approximately $2 billion in equity capital.
“This year, we've ramped up pretty well, and a lot of those are starting right now,” Plyler said. “We're putting shovels in the ground right now. Then 2027 will probably look similar to this year, where we'll hopefully start double digits.”
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