Milestone Partners was once again profiled in the latest Crittenden Multifamily Report (Vol 28, No. 14), citing the firm’s caution around multifamily assets given forward expectations for rising interest rates over the next 5 years, as follows:
Milestone Partners, a joint venture of The Bascom Group and Milestone Real Estate Partners, provides GP equity for opportunistic joint ventures. The company hopes to save sponsors time and streamline the process by taking the place of syndicated GP equity on the capital stack. Equity checks range from $100K to $10M. Milestone Partners prefers a 16%-plus IRR and a three- to five-year hold. The firm will provide 60% to 90% of GP equity, but the capital stack must have a third-party lender and a third-party LP equity provider. The company invests in all asset types, but didn’t do a multifamily deal in 2018 due to forward concerns about the possibility of rising interest rates and the generally high cost basis of multifamily. The firm will still be on the hunt for strong multifamily deals in 2019.
Milestone CEO William Wells noted, “While Milestone is concerned about forward interest rates and the current cost basis of many multifamily acquisitions and developments relative to reversion dollar per unit expectations, we still believe the endogenous factors governing multifamily are strong. It’s simply a matter of containing the market risk.”
