Investment Philosophy
PROPERTY SELECTION & VALUE CREATION
Our proprietary approach targets highly productive markets with solid underlying fundamentals and projected future growth.
We then leverage our industry relationships to identify off market assets where we can implement our vertically integrated platform.
Through our in-house general contractor, we take a hands-on approach to an efficient renovation process, while deploying our management / operations team to drive operational efficiencies with the goal of enhancing the tenant experience and marking rents to market.
Why Apartments?
S2 invests in multifamily assets with an attractive discount to replacement cost that allows us to generate healthy returns through the implementation of improved operations and construction programming. Investing in built multifamily assets provides some of the most attractive risk/reward profiles when leveraged appropriately.
We underwrite our investments to generate a projected stabilized return on cost that produces a spread of 125 bps or greater above underwritten exit cap rates while typically producing attractive interim yields.
Our Target Markets
S2 Capital targets markets that routinely outperform national averages amongst population, job, wage, and median home value growth coinciding with considerable renter demand and institutional liquidity.
This includes the active S2 markets of Arizona, Texas, Florida, Georgia, and North Carolina, which have all seen robust growth in the aforementioned economic indicators. With continued growth anticipated, the current environment remains especially conducive to multifamily investing given the ongoing, significant challenges facing new home ownership.
Niche Focus
S2 focuses solely on value-add multifamily investing. We don’t invest or operate in any other asset classes. Our focus is entirely on being experts in all facets of the multifamily investment lifecycle. Thus, all of our internal resources are focused on analyzing and understanding current trends impacting multifamily investment and operations, free from internal conflict over investment strategy and competing investment priorities.
Property Selection
We credit our investment team with taking action to build broker relationships and proactive deal sourcing.
Using our vertical integrated operations and construction platform, we can efficiently collaborate and assess investment opportunities, which allows us to move quickly with more favorable purchase terms, such as hard earnest money, to attract the right buying situations.
Integrated Operations
Multifamily investing starts with proactive management that has full interest alignment with our investors. Each investment has its own business plan, which requires various degrees of operations and construction management.
S2 is able to service each investment using its affiliated teams of asset, construction, and operations managers who typically work together on the same sub portfolio of projects allowing for a more seamless execution approach. Our culture promotes teamwork and collaboration that is hard to find when blending multiple third-party vendors together.
Adding Value
S2 has successfully invested more than $500 million in upgrades and renovations through our construction management affiliate, S2 Construction Company, LLC. Utilizing our design, branding, and construction teams, we implement a capital renovation plan that allows us to reposition the investment to better compete within its competitive set. We typically invest $10,000 to $15,000 per unit in upgrading common areas, apartment interiors and amenities and aim to achieve a 20%+ ROI on these improvements.
