Mitch Paskover, Managing Partner
Trion Properties

Trion Properties, a prominent player in the US West Coast market, is aiming to make its portfolio recession proof...

Did Trion Properties have a successful 2015?

Trion Properties had an extremely successful 2015—it was Trion’s highest volume acquisition year. Newly delivered renovated projects far exceeded our expectations, and we entered two new markets that we are very excited about—Portland and the East Bay (Bay Area). Additionally, we’ve spent the last couple of years solidifying our strategy.

There is a huge rental affordability crisis currently going on in the urban centers of the US. Not only has supply not been able to keep up with the demand from the millennial generation, but also with high levels of construction costs, the new supply is solely focused on catering to the top tier of renters.

Trion sees a huge opportunity here. Our strategy is to acquire underperforming boutique assets in gentrifying submarkets and renovate them to a high quality that is usually not exhibited in non-institutional assets. The effect is that residents at our properties typically pay a higher rent than other ‘mom and pop’ properties but at a huge discount to newer construction.

For example, The Eleanor, a 41-unit 1920’s building located in Westlake/Macarthur Park, a neighborhood that sits between Koreatown and Downtown Los Angeles, is getting the highest rents per square foot for an asset of its vintage in the submarket. However, even more importantly, the tenants who live in the community love their homes. The property has a five-star review rating on both Yelp and

We look forward to delivering excellent communities to our residents and in turn, generating continued stellar returns to our investors in 2016.

What is Trion Properties target market when purchasing properties?

Our target markets for acquisitions are gentrifying neighbourhoods throughout the West Coast, primarily Los Angeles, San Diego, the Bay Area, and Portland.

We target assets that have potential immediately, but are located in areas that we believe will continue to grow into better neighborhoods. In 2015, most of what we acquired was located in neighbourhoods that historically have been lower income but have shown signs of rejuvenation. Whether it is the addition of public transportation or major employers, popular restaurants, nightlife, or coffee shops moving into the neighborhood, we are always looking for the next neighborhood to demonstrate signs of growth.

What markets have you already conquered? And what markets do you plan to enter in the future?

As previously mentioned, we own in West Coast markets, our home base of Los Angeles, San Diego, the Bay Area and Portland, Oregon. During the recession, we purchased assets in Sacramento that have done well for us, but we are exiting those assets this year.

We do not have plans to expand into other markets at this time. We have specifically chosen these markets that we believe are best prepared if there were another recession. Our current target markets are areas where job growth has far exceeded new supply, areas that have access to many high paying jobs and well-educated young renters.

What factors are driving tenants to the surrounding submarkets of the Bay Area?

The Bay Area has seen record job growth and an influx of renters—and not enough supply to keep up with unprecedented demand. However, the growth is not only in San Francisco or Silicon Valley anymore. Residents and companies alike have moved to the East Bay in search of affordability, access to public transportation and its central location. Companies such as Uber and Tesla are bringing high paying jobs to areas such as Oakland and Fremont, while the Apple and Googles of the world are snatching up the high-end office space of the Silicon Valley.

Why are the Hayward and San Leandro regions so popular or attractive for acquisitions?

Hayward is often referred to as the ‘Heart of the Bay’ because of the city’s central location in Alameda County—15 miles south of Oakland, 16 miles west of San Mateo, 25 miles southeast of San Francisco and 26 miles north of San Jose. The property’s central location makes it a short commute to many employment opportunities in the bustling Bay Area at a fraction of the rent of neighboring cities. Hayward has great access to the interstate 880, State Route 238, and State Route 92, which continues west as the San Mateo-Hayward Bridge. The city of Hayward just invested over $100 Million into the ‘Hayward Loop’ to cut down commute times and beautify Hayward’s Downtown.

San Leandro offers immediate access to BART stations, the Oakland International Airport, and the San Leandro Technology Campus, a 500,000 square-foot campus of connected office space adjacent to the BART station. The San Leandro Technology Campus, known as the ‘future of business and industry’, will bring an estimated 1,800 high quality jobs to San Leandro, thereby driving exponential economic growth in the next few years.

With strong competition in the US, what makes Trion Properties more attractive than its competitors?

Our vertically integrated property management/project management platform has allowed us to fine tune our repositioning skills, creating a better end product for our residents. We are always thoughtful on how to best cater to our residents, whether it be providing technological improvements such as smart locks, nest thermostats, or Uber concessions or arcade games in the common areas.

Additionally, we have good relationships with the brokerage community. Brokers that source us a deal will always get the deal back on the back end. We protect brokers on acquisition opportunities that they bring to us and will pay a fee when necessary. We understand the value that brokers bring to our business and we do everything to convey that, helping us to continue to build our pipeline.

Do you have any other acquisitions in the pipeline for 2016?

As of now, Trion Properties, along with an experienced development partner, has a ground up development deal under contract. The asset will be in the Culver City/Lower Westside location. This deal has an amazing location in close proximity to the growing ‘Silicon Beach’ startup culture, where hundreds of startups are beginning to headquarter their businesses. We are also continually looking to add to our portfolio.

The latest interviews from Real Estate Investment Times
The latest features from Real Estate Investment Times
Michael Davis of JLL speaks to Theo Andrew on the emergence of the flexible office space and making the most of today’s gig economy
As infrastructure evolves, private equity is turning to the sector in search for higher yields. Theo Andrew investigates the opportunities it represents for investors
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
A report by CBRE and DLA Piper into the African real estate market highlighted challenges and opportunity in equal measure. Theo Andrew investigates
Regulatory changes mean industry-wide education is essential for the future of the business, heard attendees of the Non-Traded REIT and Retail Alternative Investment Symposium in New York. Theo Andrew was there
Changes in the market and increasing foreign capital mean conditions are ripe for joint ventures. Theo Andrew speaks to experts who highlight the points to consider before entering into a partnership
Uncertainty rules in the UK as a hung parliament affects investor confidence
The industry may be changing, but there is still room for the traditional commercial real estate broker. Experts explain where and how they fit in
Ecommerce and changing demographics can be daunting for traditional retail, but there are opportunities for those willing to twist it up a little
Country profiles
The latest country profiles from Real Estate Investment Times
UBS Asset Management Global Real Estate has launched a new business initiative in Brazil, in partnership with Brazilian consultancy Real Estate Capital. Senior adviser Miose Politi explains
A member of the EU since 2007, Romania boasts a property market that has been on the up ever since. Liviu Tudor of the Romanian Association of Building Owners explains
Asset Servicing Times

Visit our sister site
for all the latest asset servicing news and analysis
Alternative allocations are becoming mainstream for institutional investors, and Canadian companies are leading the pack, says Claire Johnson of CIBC Mellon
Amid cross-border restrictions and tightened belts, Luxembourg’s kingdom of real estate investment won’t be crumbling any time soon