Kenco's Third Generation On Expansion Spree
After 50 years, long-time Atlanta apartment family Kenco is ceding control to a new generation. (It's kinda like that show Dallas except it's in Atlanta and it's not crazy.) It's taking on debt for a shopping spree that could spread through the Southeast.
We sat down this morning with Kenco's Doug Linneman, Clay Edwards, and Clayton Edwards (Clay's son). Kenco is on a shopping spree after more than 30 years of holding on to a small Atlanta portfolio of '60s-gen apartment complexes and little else. (Like most middle-aged companies, you realize you've worked hard for long enough, so go buy a Porsche.)
Kenco has come out of the box swinging in the last year when Clayton, 29, rejoined his father's company after a stint at UGA business school. The firm purchased Waldan Pond, a 124-unit apartment complex in Woodstock (here, no relation to Thoreau's, but you don't have to be in Massachusetts to be self-reliant) and Marietta SomerPoint, a 144-unit complex in Marietta from RADCO. That was after selling a slew of legacy properties, including in Tucker, Buford and North Shallowford, the (latter of which sold to Cocke-Finkelstein) to free up some investment cash. Clay says it was hard to part with those properties when “you kind of get married to something.” We enjoyed the father/son banter this provoked: Clayton: “Debt's a good thing!” Clay: “That's been hard to accept.” Clayton: “I'm comfortable taking on more risk because of my age though.”
Even with debt, buying multifamily in today's market with conservative underwriting is a lot easier said than done. Last year, Kenco underwrote 50 properties. It only bought one (Sommerpointe, here). Clayton says they're seeking '70s/'80s vintage apartments (somethin' groovy, man) that have seen significant renovation, and where they can add value by stricter management and raising rents. That M.O. means--unlike many of its competitors--Kenco is looking in suburbia. Nonetheless, “you have a lot of competition,” Clayton says. The firm is targeting some 400 units to buy this year, and hopes to own more than 1,000 by next year, when it will start looking for buys in Athens, Nashville, Charlotte, and beyond.
We took a moment with Clay, who showed off an impressive display case of WWII mementos and artifacts gathered by his father, Kenco founder Ken Edwards, who served in the Marines at Saipan and Tinian. Clay has another love--one his son's not forcing him to sell either: He's an avid gearhead, and owns a collection of vintage cars, including a 1969 Oldsmobile 442, 1970 Buick GSX, 1971 Formula Firebird, and a 1972 Chevrolet Chevelle SS.
