New Real Estate Securities Firm Comes to the Fore

Five X Securities Inc. has just come on the real estate securities scene with industry hotshot Daniel Young at the helm. Young, former president & CEO of NFP Securities of Austin, Texas, will operate the new start-up from Oakton, Va., home base to its first client, multi-family real estate investment and operating company Mission Residential L.L.C. Five X will join forces with leading real estate sponsors like Mission Residential to unearth prospects, predominantly in the apartment sector, for starters. “We’re going to have several different vehicles, private and public,” Young (pictured), who carries the title of Five X principal & CEO, told CPN today. Given the confidentiality that is frequently attached to private placements, Young declined to expound on monetary aspects of the newly formed broker-dealer concern. However, what is clear is the reasoning behind the decision to initially target the multi-family sector. “There are a number of different things going on in the apartment market,” he said. “You have the demographic of echo boomers coming into the workforce–they’re as big as the baby boomers–and they’re going to come into the apartment market, and there are a lot of people getting out of houses, for one reason or another, and returning to apartments.” Indeed, the U.S. apartment market continues to hold steady. The average vacancy rate stood at 5.8 percent at the close of the second quarter, up just a hair from second quarter 2007’s 5.8 percent, according to real estate research firm REIS Inc. Additionally, rents are forecast to increase 4 percent this year, the National Association of Realtors reports. “The apartment market is a good hedge against inflation,” Young added. “You can spread around asset allocation because it’s not as closely tied to the stock market.” For the most part, the entire country will be fair game for Five X. “We’re looking at growing markets, nothing is off limits,” he said. “We want high quality properties in good locations close to where people want to work.” Four-year-old Mission Residential presently owns and manages apartment communities in Georgia, North Carolina, Tennessee and TexasWhile the apartment currently Five X’s first priority, opportunities in other commercial real estate sectors will be pursued down the road, including office and industrial. “We’re looking for deals with low fees and a good alignment of interests with the sponsors.”