Q2 was a dynamic quarter at PPR, marked by strong performance, strategic asset acquisitions, and noteworthy progress across all verticals. We’ve reached significant milestones in our assets under management, and this success is an attestation of the trust and confidence our investors have in us. Here’s an in-depth look at the highlights and key takeaways from Q2.
Firm Growth and Assets Under Management
PPR’s growth trajectory remains solid, with $988 million in assets under management (AUM) and $389 million in equity under management (EUM) at the end of Q2 2024. The firm is on track to surpass $1 billion AUM by Q3 2024. The breakdown of our current AUM is as follows:
- Non-Performing Loans (NPLs) and Re-Performing Loans (RPLs): These core components continue to be a major focus, accounting for the bulk of our portfolio at 69% of total AUM.
- Multifamily and Commercial Real Estate: 27% of AUM is diversified into this vertical, a key area of growth and opportunity for PPR.
- Opportunity Fund: 2% of AUM is allocated in our recently launched Opportunity Fund. This includes our exciting venture with Olympus Pines, investing in the Tommy’s Express Car Wash platform in strategic locations across the US.
Our growth is a testament to our client’s trust in PPR and our ability to adapt and diversify while remaining committed to our core strengths.
Loan Portfolio and Acquisitions
Q2 2024 saw the acquisition of over $110 million in gross loans, across more than 15 trades. Two significant trades accounted for $70 million, one involving a large insurance company and another from a residential transition loan (RTL) originator. These larger deals were complemented by smaller, opportunistic trades that continue to provide valuable opportunities in the market.
We expect that Q3 will mirror this success, with projected acquisitions exceeding $100 million. In addition, the disposition side, while stable, is poised for a major shift. In Q3, we anticipate the sale of roughly half our RPL book to a large bank, totaling 400 loans and approximately $100 million in assets.
Multifamily and Commercial Real Estate (CRE) Update
In 2021, we expanded into multifamily and commercial real estate. We now have several significant acquisitions and projects underway:
- Carson, GA: This 284-unit property has a strong on-site management team dedicated to bringing the property back to stabilization and finding proper-credit tenants. We expect stabilization and growth in net operating income (NOI) by Q3.
- Brentwood, GA: Brentwood continues to show consistent rent growth and strong occupancy rates quarter over quarter. In May, PPR purchased a loan rate cap to coincide with loan maturation in 2025.
- Athens, GA: Occupancy and rent growth are making strides thanks to the leasing efforts of the on-site team with the property management group that took over in April. We expect to have a number of positive updates on this property come the end of Q3.
- Austin, TX (Affordable Housing Project): We’re on track for a January 2025 delivery of Frontier Valley. The project is progressing smoothly, with about 60% of construction complete. We’re transitioning our partnership from one nonprofit to another to achieve 100% tax abatement, which will bolster NOI and returns upon our exit.
- Overland Park, KS (Multifamily Project): The Louis is performing close to budget, with premiums on renovated units. The Overland Park sub-market continues to be one of the top markets in the country in terms of rent growth, low vacancy and interest.
- Nashville, TN: Our most recent acquisition in Nashville will see significant exterior and building upgrades, as well as a light value-add program for all 205 units.
Operational Highlights and New Developments
Aside from our investments, PPR had a strong quarter for infrastructure and operational growth. We moved our HQ to a new, Class-A workspace to accommodate our growing team, we raised $21.5 million in new capital, and we introduced a new and improved investor portal, designed to offer a seamless, self-directed investing experience with more comprehensive information than ever before. A mobile version is also in the works.
PPR has also received several accolades this quarter, further reinforcing our standing in the market:
- Best Places to Work: For the second year in a row, we’ve been recognized by the Philadelphia Business Journal.
- Inc. 5000 List: PPR has been included among the fastest-growing private companies in America, a testament to our expanding business and operational success.
Corporate Social Responsibility
Throughout Q2, PPR continued its commitment to giving back. This quarter, we partnered with Angels in Motion, a Philadelphia-based outreach program helping individuals with substance use disorders. Our team assembled over 500 “blessing bags” containing snacks, drinks, and encouraging notes, raising nearly $3,000 in donations.
Looking Ahead: Evolving and Diversifying for Future Growth
Our strategic focus for the rest of 2024 remains on evolving and diversifying our offerings, ensuring continued growth and stability for our investors.
Our Investment Evolution & Current Offerings
Opportunity Fund
Earlier this year, we launched PPR’s first Opportunity Fund.One of the exciting new ventures under the Opportunity Fund is our investment in Tommy’s Express Car Washes, a venture in partnership with Olympus Pines. This initiative offers projected returns of 18-24% over a five-year term, including a substantial preferred return. The Opportunity Fund, with a target raise of $20 million and limited to 100 investors, represents a shift towards PPR’s diversified capital deployment.
New Growth Fund
We’re also working on a new Growth Fund, offering a mix of real estate investments with a lower preferred return rate but potential for upside. This will complement our existing funds, providing additional options for risk-tolerant investors seeking growth.
Income/Freedom Fund
Our Income/Freedom Fund is our flagship fund offering 12% preferred returns, or 14.38% with compounding (though subject to change going forward depending on the Feds’ recent and upcoming decisions). With a $50,000 minimum, it continues to be an attractive opportunity for those seeking steady, high returns.
As always, if you have any questions or would like to learn more about our offerings, the investor portal, or any other topic, please reach out to our Investor Relations team. The entire team at PPR thanks you for your continued trust and partnership. We look forward to sharing even more exciting updates in Q3.
