“We offer alternative investments in-house,” said Adam Norvell, managing director of real estate at Manhattan West. “We offer direct investment in private equity deals, private debt and real estate.”
The 50-person company, which was founded in 2016, specializes in managing wealth for high-net-worth individuals. And Norvell said real estate generally outperforms other sources of public equity, making it desirable to the firm’s investors.
Manhattan West owns, operates and manages all of its assets, which Norvell said allowed the company to be “closer to the real estate” and more proactive.
The company is focused on multifamily and industrial properties.
“That’s very intentional,” Norvell said. “There’s huge capital markets demands. There’s a market to sell the assets. There’s huge investor demand … because of the tailwinds we’re seeing in rent growth. With industrial, it’s very obvious to see what’s happening. The pandemic has accelerated the pace of online ordering.”
Retailers want to have warehouses closer to their clients to ensure faster delivery times, which has furthered demand for industrial space and contributed to rent growth.
In February 2020, the company purchased a 14,400-square-foot industrial property at 1070-1086 251st St. in Harbor City for $1.8 million. The property had four 3,600-square-foot suites across two buildings.
“What we liked about the asset is what other investors didn’t like — it required a lot of work,” Norvell said. “I looked at the asset and was not deterred in any way by the significant amount of capital we had to put into it.”
Manhattan West spent six months updating the property, which included a new roof, renovated offices and secured fencing. Norvell said leasing was a little slow in late 2020, but by spring of 2021 “it was like a light switch went off,” and they had multiple offers. It was able to secure rents almost 25% higher than the firm’s projections. It then sold the property for $4 million.
“We decided, given how attractive these deals are for investors, to bring it to market,” Norvell said.
For multifamily properties, Norvell said, the company is focused on Southern California assets.
“In general, multifamily and industrial trade at the lowest cap rate and are the least risky of commercial real estate income producing assets,” he said. “We truly believe in the economy here in Southern California. We’re big believers in the content production economy and the jobs that come with that.”
Norvell added that it is difficult to build new product in Southern California, which, coupled with the job growth, means existing product will continue to perform well.
“We remain very bullish on L.A. in the long term,” he said. “We feel like in Southern California we are going to be the beneficiaries of some of this work-from-home trend.”
And the company is continuing to look for additional multifamily and industrial deals. On the industrial side, Norvell said, it is often difficult to find opportunities, even though the company is still interested.
For multifamily properties, it is focusing on assets with more than 50 units that were built after 1978.
But the company is even more interested, he said, in ground-up multifamily development opportunities.
Manhattan West generally holds on to its real estate investments for three to five years for typical value-add investment deals. For development deals, the company generally holds on to properties for four to seven years.
