Discover answers to commonly asked questions about HLC Equity here. Learn about our specialized approach to multifamily investments, our evolution from diverse asset management to a focus on housing demand, and the benefits of partnering with us. Explore insights into our investor base, collaborative ethos, and how we navigate the dynamic real estate landscape. Find the information you need to make informed decisions and embrace collaborative investment opportunities with HLC Equity.

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How Does HLC Equity Handle Property Management and Tenant Relations

HLC Equity prefers to handle property management internally, compared to many who delegate to third-party managers. This hands-on approach allows HLC to drive greater returns, effectively manage operations, and maintain a direct line of communication with property staff and residents, resulting in an overall positive property management experience.

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So at HLC we own and operate our properties. We generally don’t delegate the management to a third -party property manager. That’s been important for us. It’s really helped us in terms of driving returns, driving operations, knowing what’s going on at the property. So we’re in touch directly with our staff at every property and that’s really been a key differentiator for us to be able to really feel that we are operating these properties in a positive way.

What are HLC Equity Investment Holding Periods?

HLC Equity identifies our investment holding periods based on the traditionally long-term approach we’ve developed over our decades of experience. Preferring longer durations to maximize ownership benefits, specific holding periods vary based on the deal, investor preferences, and asset nature. These can range from five to ten years or more when looking to leverage our generational strategy, or a shorter-term duration, with a potential sale within one to five years.

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So fundamentally, the duration of our investments actually plays into our tradition of being a multi -generational real estate owner and operator. And we have seen the benefits of owning real estate over a long period of time.
And that’s traditionally been our preference for our own investments. Now, we do have a diverse range of investors. And so sometimes our horizons can be five years. Sometimes it can be 10 years. Sometimes it can be even longer than that.

It really just depends on the deal that we’re structuring and the investors that we have and the asset and whether this is an asset that we want to own for generations or if this is an asset that we feel we should go in, do our business plan, and then consider a sale within a year to five years.

What is the Typical Profile of HLC Equity Investors?

The HLC Equity investor base is diverse, encompassing high-net-worth individuals to family business owners who align with our values. Additionally, we collaborate with wealth management groups and private equity entities, shaping a vibrant ecosystem of diverse investors.

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So at HLC Equity, we didn’t start out as a traditional kind of sponsor that goes and brings outside capital.

We started out as a private, small family business that invested in real estate, and over the years we have built out a sponsorship platform.

First and foremost, we are investing on behalf of HLC Equity, and then we bring investors alongside us to invest in deals that we invest in and we believe in.

And to date, we have hundreds of investors. Those investors vary, but generally they are high net worth individuals, ultra high net worth individuals, a lot of family business owners who have aligned values with HLC Equity.

And we also serve some wealth management groups and we work with some joint ventures in private equity groups as well.

What is HLC Equity’s Process in Evaluating Investment Opportunities?

HLC Equity evaluates investment opportunities through a structured process. Our Director of Acquisitions assesses the potential deals based on predefined criteria. If a deal aligns with the requirements, we convene as a committee to thoroughly discuss its merits, capital structure, and operational potential. If the committee reaches a consensus and deems the investment viable, we proceed to make an offer at what they consider a fair price for acquisition.

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So in order to evaluate our investment opportunities today, we have a director of acquisitions who receives the vast majority of our potential pipeline and our deal flow.

He does the initial analysis once he’s analyzed and says that these does this hit certain boxes, which we have certain boxes that our investments have to hit. Once it’s hit those boxes, we sit down as a committee together and we discuss the pros and the cons, the capital structure that we want for this investment. And if this is an investment that everybody feels comfortable and onboard, that we can own, operate, and deliver the best results on.

And then once that comes about, we go ahead and we make an offer and we see if we can get it at the price that we feel is the fair price for us to pay and what makes it worth our while to own this asset.

What Asset Classes Does HLC Equity Invest In?

HLC Equity predominantly invests in the multifamily real estate sector, specializing in markets with high demand and limited supply, addressing the escalating need for housing in areas with rising living costs. While they have experience managing retail and net lease assets with major credit tenants, their primary focus and expertise lie in multifamily investments, aligning with their strategy since 2013, driven by the substantial increase in demand for this asset class.

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So the majority of HLC equities portfolio and focus today is in the multifamily space, but that was not always the case.

Still today we own and also manage asset, manage retail assets, some triple net or net lease assets with large credit tenants.And that’s something that we’ve done and that has been very good for us. But our main focus today is on the multifamily space primarily because that’s an area that we specialize in also the markets where we are particularly interesting in terms of the demand and the lack of supply. And so we’re able to provide more supply to this demand for housing in areas where the cost of living is only rising.

And that’s something that we really have just focused on as the increasing demand from 2013, when we first started kind of getting more involved in multifamily, we’ve just seen the increases in demand and it’s pretty significant. So that’s where we choose to focus our real estate investment capital and time.

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