Prana Investments specializes in acquiring underperforming multi-family properties in New York City, Los Angeles, and San Francisco. Prana’s extensive experience in this niche segment of the multi-family market and its consistently successful asset management strategies have made Prana a leading investor in multi-family properties. Prana has acquired over 600 properties in the three markets and has maintained the same strict and focused acquisition strategy since its inception.
The company began property acquisitions in 1982. In 1988, Prana began managing private-equity funds to capitalize its acquisition activities, acting as general partner in 26 completed funds that have produced high risk-adjusted net returns for investors. All of the investors in Prana’s funds are accredited.
Because it has been investing in the same regions for over 30 years, Prana has deep local market knowledge of specific communities within the metropolitan areas of New York City, Los Angeles, and San Francisco. The company has offices in each of these cities.
Prana Investments believes that multi-family residential real estate located in inner-city neighborhoods has greater pricing inefficiencies than more conventional real estate investments. Greater inefficiencies offer an opportunity for better risk-adjusted returns than comparable non-regulated real estate assets. Some of the factors that contribute to the pricing inefficiency in the areas targeted by Prana include:
- Significant government regulation
- Large variance in rents for similar units
- Differences in the condition of relatively similar buildings
- Lack of significant investment activity by institutional equity investors
- An absence of widely disseminated market information
- Little opportunity for significant new supply
The company seeks inefficiently-priced properties where tenant demand remains high and significant barriers to development exist. Prana produces investor returns through significant capital appreciation by addressing challenges at each property, stabilizing the asset, and taking advantage of normal tenant turnover.
Prana does not speculate on the direction of interest rates or the changing market conditions to earn a return, nor does it engage in development, re-development or large-scale renovations. Instead, its strategy is to earn a return for investors by stabilizing and revitalizing existing properties through professional management and prudent, cost-effective improvements, but without fundamentally changing the character of the structures. By acquiring buildings that are occupied and that require no significant redevelopment or changes in the character and tenancy, investment risk is minimized.