Security Properties

Overview

Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For over 50 years, the company has provided quality housing to its residents and excellent financial performance for its investors and partners. Since its formation in 1969, Security Properties, with its partners, has acquired and developed over 107,000 residential units at a cost of $11.6 billion over 652 assets. Today, the Security Properties portfolio reflects interests in 112 assets encompassing over 23,000 multifamily housing units – including properties under construction. In 2021, SP was named the 43rd largest apartment owner in the United States by NMHC. Security Properties maintains a focused multifamily strategy, acquiring and developing properties in select target markets. The multifamily strategy is supported by a vertically integrated corporate structure with expert acquisition, development, construction, investment management, tax credit housing, and property management teams in place. The company believes in candid and proactive communications with partners, lenders, employees, and other constituents, and invests heavily in the training of its people to ensure the longevity of business relationships. In March 2023, Security Properties completed its final capital call for Security Properties Multifamily Fund VI, a $200 million moderately leveraged, geographically diversified private equity real estate fund that invested primarily in institutional joint ventures as the General Partner. The structure of these investments afforded Fund VI members an opportunity to participate in shared potential promoted interests in various joint ventures with institutional partners. Fund VI invested in existing apartment communities in 11 MSAs, from the Nashville and Austin Metros to the West Coast. In total, Fund VI made 28 multifamily investments. Twenty-six of these (80% of Fund VI's committed equity) are co-GP investments, where Fund VI Members participate as LP's of the General Partner, an affiliate of Security Properties, and have an opportunity to participate in the General Partner's share of any promoted returns. Two other Fund VI investments (20% of Fund VI's committed equity) are directly owned by Fund VI, without an institutional partner. In total, Fund VI combined its $200 million of committed equity (10%, or $20M, of which, was co-investment from the firm and its employees) into joint ventures with 13 different institutional partners. These institutional partners contributed an aggregate of $780 million of equity, and, together, Fund VI and these institutional partners collectively acquired $2.1B of multifamily real estate, comprised of 6,400+ units. Total leverage on the fund was approximately 60% loan to cost. Security Properties initially targeted a $150 million raise for Fund VI, expandable to a maximum of $200M. Fundraising commenced in Summer of 2021. Although the fundraise was initially projected to take over two years, Fund VI raised the maximum of $200 million in six months. Ed McGovern, Managing Director of Capital Markets, added "Security Properties has had a long history of working with private individuals to invest in multifamily real estate going back to its founding in 1969. We strive to be communicative, responsive and transparent. We structure our investments so that interests are aligned for all participants and offer the ability for our investors to participate in a large portfolio of institutional apartment real estate."

Investment Focus

• Institutional joint ventures
• Geographically diversified private equity real estate investments
• Opportunities for promoted interests in joint ventures with institutional partners