Compound
Manhattan Cityfund

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Summary

The Compound Manhattan Cityfund acquires and manages a diversified portfolio of residential properties in Manhattan and operates them as rentals (generally through traditional 12-month leases but also short-term rentals and coliving, when appropriate.)

Location
Only the Borough of Manhattan
Asset Class

A diversified mix of residential real estate which may include:

  • Urban SFR: Condominiums units acquired individually or in bulk to be operated as traditional rentals
  • Small/Mid-Size Multifamily Buildings: elevator and walk-up buildings
  • Single-family homes: townhouses or brownstones
Diversification by
  • Submarket
  • Size (primarily studio, 1, 2, 3 bedrooms)

Targeted Portfolio Composition

Compound takes a unique approach to portfolio composition in that we aim to invest across the city’s submarkets in such a way that our Cityfund portfolios act as a representative “slice” of that metro area and provide a return that is highly correlated to the return of that market, rather than overweighting certain submarkets and asset types. Our portfolio composition matrix shows the distribution of asset types by submarket in Manhattan which provides an indication of our long term targeted portfolio composition strategy.

Why Manhattan Residential?

Historical performance

Manhattan residential real estate has historically outperformed other comparable asset classes like the S&P 500 and even gold. In the past 20 years, the median price of a Manhattan condominium has appreciated 323%.

Buying opportunity

There is significant new supply coming online. The market has been weak and sellers are highly negotiable. We believe this makes it a great time to make a long-term real estate investment.

Growth and income strategy

The bulk of the return will come from price appreciation, with a smaller component from rental income. Compound will seek to maximize returns by buying units in bulk and at a discount and by using short-term rental strategies when appropriate.

Manhattan condominiums have outperformed both stocks and bonds

Over the past 20 years, the median price of a Manhattan condominium has increased by more than 300% :

Manhattan Condominium Median Sale Price
S&P 500
Bloomberg Barclays US Aggregate Bond Index
2000200220042006200820102012201420162018100200300400500323%107%156%
Source: Douglas Elliman Q4 2018 Market ReportSource: Yahoo FinanceSource: Bloomberg* 20 year period of 1999-2019 selected for illustrative purposes; additional years and data are available upon request.

The Manhattan residential market is currently soft

The Manhattan condo market is experiencing the longest lasting and deepest decline to have occurred in over 20 years.

Median Sales Price

The perfectly uncorrelated asset to diversify your portfolio

Manhattan condominium prices have historically been uncorrelated to both the equities market and the bond market.

Correlation between Manhattan Condos & Stocks:   -1.7%

Correlation between Manhattan Condos & Bonds:   2.6%

Manhattan Condominium Median Sale Price
S&P 500
Bloomberg Barclays US Aggregate Bond Index
-50%-40%-30%-20%-10%0%10%20%30%40%50%19992018
Source: Douglas Elliman Q4 2018 Market ReportSource: Yahoo FinanceSource: Bloomberg* 20 year period of 1999-2019 selected for illustrative purposes; additional years and data are available upon request.

Investment Team

Investment decisions are made collectively by the investment team which has a track record of investing in and managing multifamily and condominium projects in New York City and nationwide. Property management services will be performed by an experienced local affiliate which has managed more than 1,000 apartments in New York City. Collectively, the investment team has managed over $5 billion in real estate transactions.

Janine Yorio

Janine Yorio

Janine has over two decades of real estate investment experience. She was previously head of real estate development for Andre Balazs’ Standard Hotels, and before that was a Portfolio Manager at real estate private equity firm NorthStar Capital where she worked on hundreds of investments from origination to exit, five of which culminated in IPOs, including 4 publicly-listed REITs. Over the course of her career, she has managed over $2 billion in structured real estate investments ranging from CDOs and mezzanine loans to coliving and short-term rental strategies. She graduated from Yale University.

Jesse Stein

Jesse Stein

Jesse oversees real estate investment, operations, and new products for Compound. Previously, Jesse was a founding member and Chief Operating Officer of ETRE Financial, a real estate information technology company where he developed a trading platform specifically designed for real estate securities and partnered with Nasdaq on a series of REIT Indexes. He has a background in real estate investment banking and equities trading. Jesse is a graduate of Cornell University and also holds a Masters Degree in real estate investment from New York University.

Manish Shah

Manish Shah

Manish leads all asset and property management at Compound. He is principal/co-founder of Two Kings Real Estate where he has managed portfolios of real estate assets including controlling equity, preferred equity, mezzanine and senior debt investments acquired via private equity and corporate funds. His prior experience includes executing a turnaround of a publicly traded company with significant real estate assets, and managing over $1 billion in equity and debt transactions at Bear Stearns and Morgan Stanley. Manish graduated with honors from Harvard Law School and graduated with honors and distinction in two majors from Yale University. He serves on the Board of Advisors for Yale’s Institute for Global Affairs.

Christopher Wang

Christopher Wang

Chris is a principal and co-founder of Two Kings Real Estate and has has overseen every stage of the investment lifecycle for more than $500 million of assets including apartments, hotels, office and retail properties. He has led the operation and renovation of more than 1,500 hotel rooms for major hotel brands and has overseen the management of more than 1,200 apartments in New York City. Christopher attended the Lawrenceville School and earned BBA and MBA degrees from Emory University's Goizueta Business School.