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This Housing Developer Is Still Sourcing Deals

Urban Pacific - Blog Format (13)

Featured in GlobeSt

Urban Pacific Group of Cos. has a unique business model building multigenerational housing at a moderate price point. The asset class is well positioned to weather the economic storm, as the company’s founder Scott Choppin, told us last week. Unlike many companies, it isn’t playing the wait-and-see game. Instead, Urban Pacific is actively sourcing new opportunities for development.

“We are seeing a lot of opportunity. Our assessment is that middle- and long-term value of moderate-income, multigenerational housing will continue to have general demand that exceeds supply, then the story for new projects will continue to be positive,” Choppin tells “We do have to be careful about how we underwrite future projects. We have never been aggressive in rent trending, and we always underwrite new deals based on today’s assessment of the marketplace. We will continue to underwrite in that way and based on the market, as we have always done.”

It isn’t only that the asset class should perform well in a constrained market. Construction and land costs are also likely to decrease as well. “I expect labor to become less expensive,” says Choppin. “There is also a story around land values pausing or decreasing. The broken supply chain has not seemed to have an impact on material supply availability, but the interesting thing for us is that we converted to domestic suppliers anyway. Granite countertops, for example, used to be cheaper from China, but we have found that it was more effective for our labor to source those materials locally. So, right now, we won’t see constraints on that.”

In fact, Choppin was actually slowing down before the pandemic because land pricing had hit record levels. “We have kept very disciplined in building our pipeline, but for the last six to eight months, we had paused because land availability had become constrained,” says Choppin. “We weren’t finding the price of land that we were comfortable with, except in very narrow sectors.”

Going forward, Choppin is also partnering with opportunity zone capital, which will also give him some flexibility to work through this market. “We are increasing our hunt for deals because we have opportunity zone capital sources where these present economic conditions could actually benefit the deal if we can buy land and construction much more cost effectively,” he says. “Since we are focused on a long-term, 10-year investment window, these immediate concerns don’t affect us as much. That is why we went to a long-term hold in the first place.”

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