Alpha Capital Partners  - AKA Alpha Residential Trust
URL:
Location:
Pittsburgh, Pennsylvania
Niche:
Multi-Family
Prior::
CrowdStreet

Overall:

Communication/Reporting:

Track Record/Performance:

Sponsor Fees:

Alpha Capital Partners Reviews & Ratings

Alpha Capital Partners was organized to acquire, develop, and manage institutional quality multifamily apartment properties in US growth markets with strong demographic and employment trends with constrained supply.  ART is focused on delivering strong risk-adjusted returns.

ACP is currently focused on strategic markets in certain growth US MSAs (see list below) where we believe we can continue to deliver very attractive risk-adjusted return to investors.  ART’s near term strategy is to acquire, develop, and manage Class A & B garden style and mid-rise multifamily properties within a 50-mile radius of these anchor MSA.

ACP’s strategy revolves around acquiring Class A & B (“small” 40 to 200-unit garden style and mid-rise) multifamily properties with strong CAP rates and sustainable cash flow growth. ART is focused on building a strong portfolio of well-located garden styles and mid-rise multifamily asset within demand growth, job growth, and supply constrained secondary/tertiary markets to generate very attractive risk adjusted returns. Continued FFO growth from these properties will be realized through rent growth and operating efficiency.

ACP is pioneering a very robust strategy around “small multi-family properties (40-200 units).” ART is a market leader in small balance real estate (SBRE)deploying technology and analytics efficiently to drive operational efficiencies and growth. We believe there is considerable value in this fragmented multifamily space.  Managed properly and scaled efficiently with technology we see this unique opportunity generating very attractive returns.  Our investment strategy is to execute a disciplined acquisition strategy over the next five years, behind very strong momentum in the multifamily REIT space. The macroeconomic outlook for renters of apartments is a favorable environment.  ART’s growth strategy is to expand into the strategic markets listed below, build a strong portfolio of garden style and mid-rise multifamily units, with the potential exit through a sale or public market listing during this strong growth period.

Due Diligence & Discussions

Share your experience. Rate and comment!

R G

Jul 15, 2021

DO NOT INVEST!

DO NOT INVEST!

DO NOT INVEST!

Being in their College Station investment for four years now, they brag about 100% occupancy, yet, they still cannot make distributions.  They run 45% operating margin with a 95% occupied property.  If they can't make distributions with a fully occupied property, I don't know when they will.  The property is paying 4.5% in interest, which is outrageous in today's market.  They don't even care about doing a refinance with a such high occupancy.  I understand.  Why all the trouble while they can just sit there and collect fees.  They rob the equity investors by collecting fees.  The loan is 10 years, as long as they can service the debt, they don't need to refinance, just collect fees for 10 years.  Good business model.

Incompetent, Incapable, and DON'T CARE attitude. Period.

S G

Apr 28, 2021

In the GP Fund. Distributions have been suspended since last year. The Q4 report was released only in April. Performance is subpar. I wouldn't invest with them ever again.

John Nachtigall

Nov 04, 2020

This is a very poor sponsor.   I am in the Lakeland Living Student Housing deal.    

This was a very simple deal.   The appartment building is the only one in the small town wih the college and counts are "on-campus" for the athletes.  The school had a requirement that the athletes stay on-campus so it was a built it demand.  The existing owner was retireing and the property was stable.   The theory was to expand the leases from 9 months to 12 months (extra revenue) and master lease the property to the college as an exit.   

It has been a total disaster.   They could not raise rents, the property flooded with no flood insurance, they were not able to expand the lease terms, and the college became mad at them and gave waivers to the athletes so they didnt have to use the property.   Occupancy is 75% during the year and 30% during the summer.

They have changed management at least 4 times.   They let the flooded units sit for 6+ months before repair.   And they dont seem to have any clue how to re-stabilze this investment.   Now with the complication of COVID there is even less of a chance the investment will be successful.  

In the end they have had TERRIBLE execution.   Even issues as simple as fixing the flooded units and putting them back in service was not done with any urgency or compotence. 

Stay Away

Jason Feldman

Oct 15, 2020

I would also stay away from this sponsor. They are not transparent at all. 

The numbers they send don't make sense, and lack the detail that is needed. I think they are also not very competent. 

Jason Feldman

Mar 10, 2020

Peter DeLuca

Jul 10, 2019

I will not invest with Alpha again. In the GP Fund I, they are not following the written, legal documented requirements of the Operating Agreement with respect to distributions of proceeds from sale of properties. Jide claims the OA does not require to distribute the proceeds at a sale, but it does. He decided to invest part of the proceeds in 2 existing Alpha investments that were long-ago filled. This not only retains our capital longer (in volation of the OA), but also dilutes the other Alpha equity investors in the other 2 Alpha properties. 

Paul Chung

Mar 08, 2019

They're getting worse and worse.

Vitae - Initially master-leased but Alpha claims the university elected to not renew. Given the sponsor was unable to make preferred return distributions and is severely underperforming cash-on-cash pro-forma, they likely had to change strategies in an effort to make up for their poor underwriting. They also missed deferred maintenance issues in underwriting and are looking to use refi proceeds to pay for the deferred maintenance rather than catch up on missed distributions/paying down investor capital. Negligent? Not sure. Incompetent? Absolutely.

Also invested in their 266 Loft project which was supposed to be a master-lease deal. They were unable to execute. They're close to 100% occupied and are still missing preferred return distributions during the I/O period of their loan. Investors are screwed once loan starts amortizing. Again, incompetent, awful underwriting.

Sheng Li

Nov 29, 2018

I would not touch this sponsor with a ten foot pole. I invested in the Vitae student housing deal.

 

The deal was closed in late March 2017. In Q2 2018, it started to skip quarterly distributions. The sponsor blamed the over-budget utility cost (due to cold winter in Texas) and capex among the reasons. In the financial reports, the utility cost has been consistently 20-50% over-budget each quarter, I don't see anything seasonal, and the actual capex was much lower than budgeted.

 

Then comes the 2018Q3 report. Voila, out of nowhere, for the first time we see the actual loan terms of this deal, which is blatantly different than the terms advertised before closing and can explain a big part of the underperformance.

The terms listed on CrowdStreet website and in the email before closing was 10 years, 4.5% interest rate. The proforma was based on 4.5% ir.

The actual term is 3 years, 4.75% ir. And the sponsor is trying to refi into 5%+ !

 

I only invested in one deal from this sponsor. But there is a track record listed on CrowdStreet (on the page for this sponsor's Growth Fund IV deal), each CS deal from this sponsor with enough history is underperforming.

R G

Oct 11, 2018

Potential investors be aware, stay away!

https://globenewswire.com/news-release/2018/10/30/1638790/0/en/Alpha-Capital-Partners-to-Launch-Qualified-Opportunity-Zone-Fund-October-29-2018.html

"By continuing to follow our investment strategy of strict upfront screening, disciplined underwriting, and precise execution of property level operating plans, I anticipate strong results.”

This is laughable!!!  ALL the elements are non-existent.

I invested in two student housing deals with Jide, and they drove the occupancy all the way south from 95% down to around 80%.  I only speak based on real numbers.

They have a couple properties in College Station, TX which are all under stress due to oversupply issues there.  I'm fine with the oversupply, that's kind of my fault without in-depth DD.  However, they had issues with one property where they had to dispute with the lender on how much tax escrow they need to pay.  That's OK with me too, who doesn't have some hiccups?  However, I lost all my patience after full 3 months, they still don't have an answer.  Every time I call, the reply was their accountant is working diligently on it with the lender, will have an answer next week, but to no avail.  As of the time of this review, the distribution is suspended due to low occupancy at 82%.  The asset management was “confident” they can improve the performance by putting in professionals instead of students, but within entire Q3, they can’t move even one more unit in leasing.

Another property is student housing project in Mattoon IL, south of UIUC.  The distribution has been suspended for 6 months.  This property is on the front page of their Residential Fund IV fund raising material, where they bragged about how they converted a 10-month lease into 12-month.  What they didn’t tell the investors is that the occupancy dropped to below 80%, as apparently not everyone likes it.  And of course, they blame it on lower school enrollment.  And did I mention they suffered flash flood TWICE in last 6 months?  The first time they didn’t even have insurance.  Now I am waiting to see how much insurance they will pay next year and how it will affect the expense.

In general, this is a sponsor you should avoid at all cost.  They grew very rapidly over the last 2-3 years to scale up, but lack of experience and knowledge of local market is a serious concern.  Managing various properties across regions appear to be very difficult.

Paul Chung

Aug 02, 2018

Update:

I would stay away from this sponsor for now. I question their competence at this point. They're beginning to miss distributions on a core plus, master leased property. 

They were also misleading on one of their PPMs about their plans. They were pursuing a master lease with a local healthcare provider but abandoned that plan upon acquiring. Allegedly it was in the best interest of the investors but until I see results in the form of increased distributions, extremely disappointing. 

--end update

They communicate well and answer questions in a relatively timely fashion.

I'm invested in Vitae and 266 Lofts. My gripe with them is that they distribute only the preferred amount and nothing more. Their standard PPMs state they can distribute anything above the preferred return at their discretion, which is atypical language. 

Otherwise, I believe they are able to source excellent deals on a risk-adjusted basis.

David hutson

May 08, 2018

I am in the GP fund and Front Street Properties since I like Memphis.  I visited the Memphis properties last year and looked around.  Everything was looking good at the time.

I understand they are newer but I really like them.  They communicate very well and I have been receiving consistent payments, on time.  They just sent out an email stating we would accrue an upcoming payment but the explained it and let me know in advance, which I liked.

tom Thompson

Oct 11, 2017

I am in there GP fund and Healthcare NNN Fund great communication, CEO is very accessible,  distributions come on time...so no issues. For all the negatives i hear with Alpha(all coming from ppl who are not LP's)  they sure find great deals and get them funded. If you had an issue with Alpha and addressed it with them and the issue was resolved then it ceases to be a issue. All sponsors are good... until their not!

Alpha is a good sponsor. 

Richard A

Jun 03, 2017

I am in several of Alpha deals, but not their GP deal that some have commented on.  All properties have been paying their preferred distributions in a timely manner, and I have always been able to communicate with their leaders.  I will continue to invest with them as they bring more opportunities either to Crowdstreet or directly.

Bill Scott

Feb 06, 2017

This is interesting. I came to same conclusion. Found out they were rejected by another platform, first fund, unsure of them running a GP fund, returns made no sense given the plan.

James Mc Ree

Jan 30, 2017

I agree with Mark and had the same experience.

My decision to withdraw from the same deal was further influenced by the sponsor being declined by another platform because the sponsor called themselves a reit, which they weren't; then a trust (still called a trust) and they are not a trust.  Seems like a basic business knowledge issue to me.

Sponsor may be OK and just needs some experience.  My review of the fund track record makes me think it will be hard for them to reach their advertised target returns.

Mark Robertson

Jan 28, 2017

Invested with them very briefly. They reduced sponsor equity in my deal by 75% and was able to get a refund once this was disclosed.  Not a seasoned sponosr, but they did uncover a deal that had a good risk ajusted projected return.  Not a fan of last minute changes in the capital stack and doubt if I will invest with AR in the future.

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Alpha Capital Partners - AKA Alpha Residential Trust Alpha Capital Partners  - AKA Alpha Residential Trust
Rated 2.0/5 based on 26 customer reviews

Alpha Capital Partners Reviews & Ratings

Alpha Capital Partners was organized to acquire, develop, and manage institutional quality multifamily apartment properties in US growth markets with strong demographic and employment trends with constrained supply.  ART is focused on delivering strong risk-adjusted returns.

ACP is currently focused on strategic markets in certain growth US MSAs (see list below) where we believe we can continue to deliver very attractive risk-adjusted return to investors.  ART’s near term strategy is to acquire, develop, and manage Class A & B garden style and mid-rise multifamily properties within a 50-mile radius of these anchor MSA.

ACP’s strategy revolves around acquiring Class A & B (“small” 40 to 200-unit garden style and mid-rise) multifamily properties with strong CAP rates and sustainable cash flow growth. ART is focused on building a strong portfolio of well-located garden styles and mid-rise multifamily asset within demand growth, job growth, and supply constrained secondary/tertiary markets to generate very attractive risk adjusted returns. Continued FFO growth from these properties will be realized through rent growth and operating efficiency.

ACP is pioneering a very robust strategy around “small multi-family properties (40-200 units).” ART is a market leader in small balance real estate (SBRE)deploying technology and analytics efficiently to drive operational efficiencies and growth. We believe there is considerable value in this fragmented multifamily space.  Managed properly and scaled efficiently with technology we see this unique opportunity generating very attractive returns.  Our investment strategy is to execute a disciplined acquisition strategy over the next five years, behind very strong momentum in the multifamily REIT space. The macroeconomic outlook for renters of apartments is a favorable environment.  ART’s growth strategy is to expand into the strategic markets listed below, build a strong portfolio of garden style and mid-rise multifamily units, with the potential exit through a sale or public market listing during this strong growth period.