BJ Turner

Two Transactions Highlight Dunleer’s Leading Property Investment Ethos

In his two decades of real estate experience, BJ Turner has built, trained, and led real estate teams in North America and Southeast Asia, working with major brands in their property sales. Featured in Globe Street’s 2020 Multifamily Influencers List, BJ Turner is the founder and CEO of Dunleer.

Dunleer was founded in 2014 based on a localized real estate investment model in infill markets with high barriers to entry. The model emphasizes acquiring properties that are undervalued and undertaking renovations to realize attractive risk adjusted returns.. The firm has bought and closed numerous properties, transforming older, functionally obsolete assets into modern and upgraded properties that are safer, more energy efficient and well positioned to house more tenants for years and decades to come. Two of the firm’s example investments have been the West LA Collection Apartments and the El Centro Apartments.

With West LA Collection, Dunleer acquired a two-building property in early 2018 on one of the most sought after locations in Los Angeles, near the Silicon Beach employment district. It initiated value-added projects on the property, and within 20 months sold the property, generating a 29 percent net to investor internal rate of return.

For the El Centro Apartments, Dunleer discovered a promising property in an Opportunity Zone within walking distance from an entertainment industry hub. It acquired the property in November 2018, and in less than one year sold it to an Opportunity Zone buyer without incurring construction risk. The sale rewarded investors with a 20 percent net return.

Dunleer Records Seven Sales Since Start of 2020

Since its inception five years ago, Dunleer has proven itself as a real estate firm entirely focused on the Southern California market. The firm prefers to seek out acquisition opportunities in neighborhoods it knows well. Often, they already own on same street or will know of the exact building when presented with an opportunity to purchase. It is this kind of hyper-focus and market awareness that has allowed Dunleer to cultivate key in-market relationships that often lead to off-market opportunities. Dunleer pays particular attention to specific neighborhoods it believes have supply constraints vis-a-vis growing demand. Whereas many institutional investors seek out properties with 75-plus units, Dunleer focuses on those with 20 to 60 units, carving out a niche for itself as a significant player in that segment of the market.

The strategy has so far proven successful for the firm, which has owned almost 40 properties in the last five years, all in Southern California. However, rather than acquiring assets like it has in years past, 2020 has been different: Dunleer has sold seven properties to various buyers. This was the culmination of strategic discussions in 2019, when Dunleer principals witnessed the markets awash with capital for both equity and debt. Given the level of capital available in the market, Dunleer founder BJ Turner turned to the investment sales market to dispose of seven assets, all of which were purchased by various Southern California investors.

Investing in Low Cap Rate Markets

BJ Turner has been active in real estate development and property management for over 15 years. In 2014, BJ Turner founded Dunleer, an investment company that oversees capital raising, financing, asset management, and property acquisitions in a variety of markets.

A low cap rate market can be an opportunity, under the right circumstances and for an experienced investor. Cap rates are usually a reflection of market sentiment, risk and interest rates. Low cap rates typically mean investments in that market have relatively little risk and produce steady, if small, returns. Both of these can be highly beneficial with the right investment strategy.

Low cap rate markets often have a relatively high degree of liquidity, which is an important consideration for an investor. Knowing that as long as you accurately price your asset you will have ready, willing and able buyers is vital to exiting your property. Furthermore, finding incremental value add improvements in a low cap rate environment can lead to large gains upon sale.

Highly Differentiated Real Estate Remains in High Demand

BJ Turner serves as founding principal of Dunleer, a real estate investment and advisory firm in Los Angeles. BJ Turner created the firm in 2014, and has since developed a portfolio of multi-family and industrial assets throughout Southern California. Within the local Los Angeles market, demand for highly differentiated real estate remain high.

While the coronavirus pandemic has caused some contract turmoil and price discovery challenges in the real estate market, highly differentiated properties that have consistently high collection rates tend to be in demand and hold their pricing. There are still many 1031 buyers who sold real estate in the first quarter of 2020 and will look to place their capital into safer assets. Many of these buyers continue to look for turnkey properties in good locations, and will pay for features such as unobstructed views, newly renovated floor plans, and private outdoor spaces. In Los Angeles, tenants continue to want to live in neighborhoods with high walk scores and great local amenities.

Real Estate Risk Adjusted Returns

Real estate investment professional real estate developer BJ Turner is a Cornell graduate with more than a decade of experience in the real estate industry. BJ Turner is the founder of Dunleer, a Los Angeles real estate investment firm.

When you consider a real estate investment, you should focus on balancing risk and return, also known as a risk adjusted return. While a return is often measured quantitatively and many prospective investors can showcase an appealing Internal Rate of Return (IRR), it’s the qualitative aspect of risk that makes it more difficult to evaluate.

The reason it is difficult to evaluate risk is due to the number of forms risk can be expressed, and how those risks interact with each other. For example, geography can be a risk, local regulatory challenges can present risk, so can debt levels, environmental concerns, asset class and complexity of the opportunity. The ability to mitigate risk and present a real estate opportunity with healthy risk-adjusted returns is key to a sustainable investment platform.