Granite typically focuses on Class "B" and high "C" properties for its multifamily acquisitions, preferably in suburban locations with good access to employment centers, population growth, and strong demographics. Individual transaction size is $5 - $25 million, with asset sizes of 50-500 units. Geographically, the company prefers the West Coast, Dallas, Austin, Phoenix and Albuquerque as its primary markets but will consider other markets.
For the first ten years after its inception in 1995, Granite's core business was acquiring undervalued multi-family properties in the Western United States and adding value through repositioning, restructuring and improving management results. In the late 90's and early 2000's, Granite was able to acquire a number of undervalued multi-family properties in growth markets, resulting in high returns for its investors. In the early-to-mid 2000's, Granite made the decision to liquidate the majority of its multifamily portfolio due to the strong increase in values and returned capital with significant profits to its investors.
Since that period, Granite primarily focused its acquisition efforts on senior housing and distressed loan assets. However, as the market constantly shifts, Granite will focus on additional opportunities in multifamily in multiple markets with solid demographics. While the global financial crisis and the severe deterioration in the residential housing market resulted in significant uncertainty in the multifamily market, specific markets have recently seen a strengthening in occupancy levels and rental rates.
The 2010 US Census data suggests that the 25-29 age group, which has the highest propensity to rent, experienced steady growth between 2000 and 2010. As economic pressures and employment levels continue to depress incomes, moderately priced rental housing (B and C class products) in growth markets is expected to provide attractive investment opportunities over the next several years. In addition, the shift of homeowners to renter households is anticipated to have a positive impact on the economics of multifamily ownership in coming years as well.