Sunstone acquires properties with value-add potential in major US markets.
1. Homeownership Decline.
After peaking at 69% in 2006, homeownership rates have declined to 64% which has contributed to continued momentum in the multifamily sector.
Real wages have been stagnant and even declined for adults ages 25-34.
People are delaying marriage and childbearing which delays homeownership.
Student loan debt has increased 48% to $140 trillion over the past 5 years hindering household ability to save for a down payment.
Qualifying for a mortgage has become increasingly difficult.
2. Highest-Performing Asset Class
The public multifamily sector has outperformed every other major public property sector over the past 10 and 20 years
Revenue risk is spread over many tenants and is not dependent on the performance of a few major tenants
Provides a basic human need that is essential in every economic cycle
Why Multifamily Class B/C?
CASE STUDY: DALLAS & HOUSTON
1. Less Vacancy Risk
Since 2006, Class B apartments have averaged 92% occupancy
compared to 87% for Class A.
2. Supply Constraints
From 2006 to 2016 in Sunstone's target markets, Class A apartment
supply has averaged 10.9% annual growth while Class B supply has
averaged 1.0% annual growth.
3. Rent Growth
Since December 2014, rent growth for Class B apartments is more
than 3x the rent growth for Class A apartments in Sunstone's target
markets of Houston and Dallas.