Strategy

We underwrite to a numberwe will defend in writing.

Clay Capital Properties is a principal investor in value-add workforce multifamily across the Twin Cities’ Northwest Hennepin first-ring suburbs. We don’t have a track record to sell yet — what we have is a discipline. This is it.

The buy box

What we buy.

A narrow box, on purpose. We know this asset class and this submarket, and we say no quickly to everything outside it. If a building fits these lines, we can move fast and close clean.

  • Geography

    Twin Cities · Northwest Hennepin

    Brooklyn Park, Brooklyn Center, Fridley, Crystal, New Hope

  • Asset class

    Workforce multifamily · Class B/C

    Secondary: small-bay industrial / flex

  • Property size

    5+ units

    Garden-style, walk-up, low-rise

  • Acquisition price

    Up to $10M

    Single buildings to small portfolios

  • Hold period

    5 – 7 years

    Value-add stabilize then refi or sell

  • Going-in cap

    7.0 – 8.0%

    Stabilized target 8.0 – 9.5% post-renovation

The thesis

Northwest Hennepin is supply-constrained and out of the rent-control zone.

01

Constrained supply

Direct vacancy in the submarket sits near 1.4%. No workforce-priced new construction is coming online at these rents — replacement cost is too high. Existing stock stays full.

02

Clean value-add math

These first-ring suburbs sit outside Minneapolis rent stabilization. Renovate a unit, re-tenant at market, and the rent bump is yours to underwrite — no cap on the path to a stabilized number.

03

Durable demand

Working-family and immigrant households, 25 minutes to the central business district, priced out of new construction. Workforce housing demand here is structural, not cyclical.

How we underwrite

Conservative inputs. No hope in the model.

Vacancy

Underwritten above actual

We model economic vacancy above the submarket’s real number. If the building only works at full occupancy, it doesn’t work.

Rent growth

Below consensus

Year-one rents are set to today’s verifiable comps, not a broker pro forma. Forward growth is modeled below market consensus.

Expenses

Trailing actuals, verified

We underwrite to trailing twelve-month actuals plus a reserve, not a seller’s normalized line items. Taxes are re-assessed at the new basis.

Exit

Cap-rate expansion baked in

We underwrite an exit cap wider than our going-in cap. If a deal only pencils on cap compression, we pass.

Every acquisition is underwritten to a base case the principal is willing to put in writing before a letter of intent goes out. Targets and assumptions are not promises — see Disclosures.

The playbook

Buy right, stabilize, refinance or sell.

  1. 1

    Acquire below replacement

    Buy at a basis the new-construction market cannot touch.

  2. 2

    Renovate on turnover

    Unit-by-unit interior value-add as leases roll. No mass displacement.

  3. 3

    Re-tenant at market

    Bring renovated units to verifiable market rents and tighten operations.

  4. 4

    Refi or sell, year 5–7

    Return partner capital through a refinance or a sale into the stabilized number.

Sellers & brokers

Have a building that fits the box?

We close clean, we honor co-broke, and we keep it discreet. Bring us the deal.

How we buy →

Capital partners

One permanent partner per deal.

Senior debt and preferred equity from a single partner, structure agreed before any LOI. The framework, not an offer.

The partner framework →