As a Juniper Square Top Fundraiser, we wanted to sit down with Craig Descalzi, CEO and Founder, and Jake Moore, Director of Capital Markets at Morrison Avenue Capital Partners, to learn how they successfully navigated last year’s tricky fundraising environment and their predictions for 2024.
Q: Tell us a little bit about your background.
A: Craig Descalzi: I was working at Raymond James Financial, covering the Southeast. I did 330+ deals—about a deal a week—and it was more of an institutional play; we targeted larger banks and insurance companies to come into multi-hundred-million-dollar funds, predominantly investing equity into multifamily projects.
I saw an opportunity to do the opposite—focus on four to six deals a year and have them all be grand slams. It was also a chance to service a different side of the investor spectrum, the high-net-worth family office. That's what we've been working on since I founded Morrison Avenue Capital Partners in 2012.
Q: What is Morrison Avenue Capital Partners’ investing philosophy?
A: Descalzi: Our philosophy is to only do great deals with superior risk-adjusted returns. We are hyper-picky—we’ll review about $1-$1.5 billion in opportunities per quarter and choose one deal. The only real guardrail we stick to is multifamily in the Southeast, mostly tertiary markets. We intentionally go to Winston-Salem, North Carolina; Asheville, North Carolina; Columbia, South Carolina; and Greenville, South Carolina. The last deal we closed was a large deal in Orlando, but it was pretty far out in the suburbs. We're finding markets that are too small for our institutional friends to cover but big enough that they have a highly diversified and varied economic base and always a good story.
We only buy off-market. That phrase gets bantered about a bit, but we really utilize our network. We wait for brokers to tap us on the shoulder. We wait for owners to come to us directly. We have repeat sellers quite frequently. A lot of the magic for us is getting in on a very low entry basis.
Q: You have 300 investors globally, some at the institutional level, some at the friends and family level. What does it take to manage the expectations and needs of those different investors?
A: Descalzi: It starts with terrific reporting and underwriting, and new deal materials. You're giving them a framework—this is how it is going to go, this is what it looks like, this is what you can expect. When things happen as planned, there's not much managing to do. If you fully disclose what's going on, what you're attempting to do, and what the risks are but how you're mitigating them, I think you're setting yourself up not to be challenge-free but certainly much less daunted by grenades coming in left and right.
Jake Moore: We do a really good job of being conservative in our underwriting and how we present opportunities to people. You have to manage expectations for people. If you don't have the best news to tell people but are honest and transparent, they respect it.
Q: How do Juniper Square’s tools help you in the fundraising process?
A: Descalzi: Before Juniper Square, it was Outlook, Excel, and expensive attorneys. We would syndicate a deal with 30 investors, and I'd manually send them individual PDFs. On occasion, we’d get faxes, if you can believe that. The implementation of Juniper Square was a big difference for us. Being able to click a button to send 50 sets of documents out and not hear anything until they come back signed is a game changer.
Moore: Juniper Square’s fundraising solution is great for getting everyone from point A to point B, especially during the subscription process. We can get everyone signed up and keep everything organized. We can track documents, progress statuses, banking information, and everything that is very nuanced in the process. It's been a huge help.
Q: What do you expect for 2024?*
A: Descalzi: 2023 was bizarre, and we consider ourselves very fortunate to have been presented with the buying opportunities that allowed us to go and raise the equity we did. Because we currently have no loans due in the next two years, we have no false sense of urgency, so we'll just sit here and enjoy the cash flow.
I'm optimistic for the second half of ‘24, and I'm very optimistic about 2025. Many multifamily fundamentals continue to impress us GPs–rental rates, delinquency, and occupancy. It's market-by-market for sure, but we see a lot of good news in our markets. If the development pipeline dries up and the fundamentals continue, we anticipate there will be an organic rent boom in ’25. A rental or interest rate reduction will likely be gas on the fire. And so, we really are excited about the next 18 months.
Morrison Avenue Capital Partners was featured as one of Juniper Square's 2023 Top Fundraisers, based on our analysis of the capital raised by our clients using digital subscriptions. Digital subscriptions is one of Juniper Square's digital fundraising tools, helping GPs deliver a better investor experience and raise more capital.
*An offeror may communicate regularly released “factual information” pertaining to an issuer’s business, products or services (as well as ordinary advertisements for such products or services that do not constitute an offer) and financial condition. Additionally, the SEC has extended the safe harbor for regularly released “forward-looking” information that merely provides guidance regarding an issuer’s revenue, income, earnings and dividends. The SEC has defined “regularly released” information to include information “released or disseminated [in a manner] consistent in material respects with similar past releases or disseminations.”
Nonetheless, neither offerors nor their agents may communicate predictions, projections, forecasts or opinions concerning an offering or information that could serve to “condition the public mind or arouse public interest in a securities offering.”