Frequently Asked Questions
What is Odessa?
Odessa Realty Investments is a hands-on owner-operator of both directly managed and joint venture real estate. We service the real estate needs of private clients and institutions worldwide. Since its inception in 2013, Odessa has become recognized as a strategic real estate owner-operator specializing in value creation through a mix of development, redevelopment, lease-up and intensive professional management of each individual investment.
Why the name Odessa?
The Company is named after a historic town located in the State of Delaware. The Town of Odessa, and its historic Corbit-Sharp museum, are located about 30 minutes south of Wilmington. Dan Pryor serves on the museum’s Board of Directors.
How is Odessa unique?
In what type of real estate does Odessa invest?
Odessa focuses on value-add multifamily residential investment properties typically ranging in size from 150 to 750 units, valued at $15 million to $150 million. The firm is also opportunistic and may pursue multifamily development and other asset classes.
What is Odessa’s investment approach?
Odessa’s investment philosophy demands a focus on capital preservation with the goal of delivering above-benchmark returns to our investors while aligning compensation closely to performance. To achieve this goal, Odessa: (1) actively seeks out real estate investment opportunities where risks can be clearly identified and addressed through an appropriate risk/reward structure; and (2) for each investment, strictly adheres to a business plan that clearly identifies the key action items necessary to create value, which remains flexible enough to adapt to changing circumstances.
How does Odessa preserve capital?
Odessa typically targets off-market properties allowing for the purchase price to be significantly below market value. Value is also created by the manager’s experience in repositioning and operating the asset. A stress test is performed on the specific geographic market, including reference periods like the 2008/2009 Financial Crisis to assess the safety of an investment. Even in the unlikely scenario of a repeat of the crisis, investors are expected to preserve their principal based on pro forma expectations.
What are examples of Odessa’s Track Record?
The Odessa team recently acquired nearly 2,200 apartments with the financial backing of institutional investment partners. Odessa acquired Eagle Creek (346 apartments) at $83,000 / unit $28M and sold it three years later at $120,000 / unit; the project level IRR upon sale of 27% with only 66% leverage. The Company acquired The Woods of Filmore (200 apartments) for $8.3 million, invested $1M, and sold this asset for $21 million after 12 months.
Why multifamily real estate?
Real estate has defensive investment characteristics even during periods of economic recession. Our target markets show occupancy rates remain resilient while property values decline only modestly. The asset class also does not correlate with broader markets, which is appealing for investors looking for diversification and absolute return. Odessa’s projects typically produce a reasonable distribution each year, which yield investors appreciate.
How does Odessa invest in real estate?
Odessa’s investments are conducted through either Club Deals or Joint Ventures that utilize an entrepreneurial value creation strategy to substantially improve a given property’s value within the projected holding period, ensuring a future buyer’s willingness to pay a premium for stable long-term cash flows and returns. Odessa invests alongside both high net worth individuals and families and institutional funds.
What is a Club Deal?
A Club Deal is a special purpose investment vehicle formed for a limited group of investors to share a single asset or investment strategy. The investment objectives and holding period are pre-established.
What is Odessa’s investment strategy?
Odessa’s primary focus is to produce superior risk-adjusted returns for its investors. This is achieved through the identification and acquisition of underperforming multifamily residential assets with compelling locations. Odessa then utilizes a combination of both cost-efficient capitalization in executing the acquisition and implementing the capital improvement plan, as well as focused asset and property-level management strategies. This results in strong growth in net operating income and value creation.
Odessa acquires value-add real estate assets in outstanding locations and implements a business plan and operating strategy that creates significant shareholder value. We seek properties that have identifiable and correctable flaws such as vacancy issues, minor physical attributes, under-management, seller financial distress and market position. Our objective is to acquire such assets at valuations that reflect the existing weaknesses and subsequently reposition and/or physically enhance the properties to realize substantial upside valuation upon sale. In short, we seek “diamonds-in-the-rough” that are fairly priced.
All of our acquisitions focus on where the asset is situated, seeking leading locations in markets that have compelling and sustainable demographics, employment drivers and limited opportunities for new construction. Our target markets are typically in proximity to urban centers that have a wealthy and diversified, growing economy. Location requirements include being near major transportation modes, consumer amenities such as restaurants, grocery stores, retail and parking. Other factors determining an optimal location include security, vehicular traffic, and local governments that are pro-business.
What is Odessa’s exit strategy?
Odessa targets institutional markets with significant buyer interest from other real estate private equity funds, pensions as well as family investors. Assets in these markets typically receive indications of interest from 20-30 parties. Odessa can also allow for equity investors to exit by refinancing with a lender or introducing equity capital from a third party with established relationships.
When was Odessa (the company) formed?
In 2013 the Company began targeting multifamily acquisitions that provide significant potential for valuation appreciation based on executing an achievable business plan. Eagle Creek Apartments was the first acquisition (July 2014) and the Odessa team received financial backing from a leading blue-chip institutional firm with over $20 billion in Assets Under Management (AUM). Eagle Creek was sold after three years and achieved a project level IRR upon sale of 27% with only 66% leverage.