This interview with Ashcroft Capital dives into the outlook of the rental housing industry and the firm's plans for this year.

Units Magazine recently had the opportunity to sit down with Frank Roessler, founder and CEO of Ashcroft Capital, a fully integrated multifamily investment firm that currently owns and operates 14,000 apartment homes across Georgia, Florida, North Carolina and Texas. This interview discusses Ashcroft’s activity in 2024, its goals and plans for 2025 and Roessler’s outlook on what the new year has in store for the apartment industry.

1) Before we look ahead, let’s look back at 2024. What has led us to this point in time in the industry?

Frank Roessler: The apartment industry has, without question, had to navigate some challenges in recent years after enjoying a blistering hot market in the immediate aftermath of the pandemic.

As everyone surely knows, a surge in the delivery of new apartments has dampened rent growth in many markets and also caused vacancy to rise. Operators have had to focus on resident retention and making sure they’re providing excellent customer service to maintain resident satisfaction.

At the same time, the interest rate environment has slowed investment sales to a virtual crawl. Owners don’t want to sell when property values are down, and equity hasn’t been eager to deploy capital without a clearer view of the investment horizon.

2) What do you foresee for the apartment industry as a whole in the new year? Are there any particular challenges ahead?

FR: I’m cautiously optimistic about 2025. For starters, oncoming multifamily has slowed and the supply is being absorbed, albeit more slowly than anticipated. Yet the American economy remains more resilient than most thought. This may serve as a catalyst for rent growth.

Correspondingly, transactional volume may pick up this year. To some degree, sellers are capitulating to a new market and adjusting their expectations, while buyers and equity partners are becoming more practical in the opportunities they’re targeting.

Ultimately, I don’t think 2025 will be a historic year when it comes to investment sales, but it might be a return to normality. And normal is good.

As for particular challenges, the treasury markets continue to present headwinds for our industry.

3) What was last year like for Ashcroft and what are the firm’s plans for 2025?

FR: Last year, we really focused on strengthening our platform of vertical integration and on making our onsite operations stronger. We’ve focused on staffing improvements and training while striving for best-in-class operations.

We also completed two acquisitions in late 2024. We recapitalized The Avery, a 2004 community in Lewisville, Texas. This recapitalization was achieved when the previous owner—a joint venture between us and a private equity limited partner—sold the property to a joint venture between us and Virtus Real Estate Capital. Looking ahead, we’re very excited about expanding our partnership with Virtus. In addition, we purchased the Halston Waterleigh, a 354-unit, luxury garden-style community in Winter Garden, Fla., in metro Orlando.

Additionally, before the year ended, we went under contract to acquire three communities in the first quarter of this year, and we are selling two assets as well. So, it will be a very active Q1.

Over the course of 2025, we will remain conservative in our acquisitions but with a goal of acquiring five to eight apartment communities.

4) Ashcroft has both an in-house property management firm and a centralized procurement process. Give us an overview of the advantages these provide the company.

FR: Birchstone Residential is our in-house property management and construction management arm. Because Birchstone only manages our own assets, we have a perfect alignment of interest, and we are able to work together with real efficiency to provide outstanding resident experiences, which supports the investment performance of our communities.

We are also proud of our in-house procurement department, which we perceive as a true competitive advantage. We strive to improve all assets that we acquire through both operations and tasteful renovations. By renovating the homes in these communities, we’re able to provide higher-quality finishes for renters and deliver strong risk-adjusted returns to our investors.

To quickly summarize, our procurement process allows us to purchase our renovation materials directly from overseas manufacturers at a steep discount. By extension, we can renovate our communities at a reduced cost and provide targeted returns to our investors as well as a higher quality of life for our residents.

5) Do you foresee Ashcroft moving into new markets in 2025 or at another point in the future?

FR: In 2025, I think we will remain active in our existing Sun Belt markets. However, we are looking at other parts of the Sun Belt—Las Vegas, Phoenix and Scottsdale, Ariz., for example—and we could expand into one or more of those metros after this year.