Their communication is mostly really solid but the performance and execution has not met expectations, with commitments of monthly distribution schedules being altered to quarterly, as well as full pauses of distributions across all of my deals. This is a mid-cycle review as none of the 3 deals (various hold periods, ranging from 5-10 year) I invested in have come full cycle. My (LP) assessment is that they built the business on Multi-Family and did really well in their first handful of value-add MFH deals, which went full cycle in shorter then expected timeframes and generated strong 20%+ IRRs...but this was mostly between 2013 to 2021. They then expanded out to other property types like Car Wash, Hospitality and Self-Storage, as well as targeting newer-build MFH communities and a number of things have not gone right since.
I first invested in PIC in 2021 (Self-Storage portfolio deal). Rates were extremely low and the PPM covered the financials and lending scenario clearly. As part of the financing, an interest rate cap would be purchased to hedge against high interest rates. Great! Most loans were I/O for an initial window (multiple years). I invested in Self-Storage via PIC because of the experience and track record of the 2 Self-Storage Managing Partners.
Then the Fed aggressively raised rates in a short time and the interest rate caps worked, until they expired, and new caps purchases were significantly more expensive, in addition to the new (much higher) monthly I/O payments. That's the major impact to 2 of my 3 deals (2nd deal was a Car Wash portfolio, which has been impacted by lending as well as some other operational learning curves).
My 3rd deal with PIC, which I entered into in late 2022 (because they would accept my 1031 exchange into a sidecar), has not been impacted by the interest rate changes as the loan terms were very conservative (which I liked) including a fixed rate for multiple years. Unfortunately, this Self-Storage portfolio deal has also failed to perform, despite favorable lending. After a year of expected distributions (albeit a shift from monthly to quarterly after 6 months), distributions stopped for 18 months, despite a growing NOI over this dark period. When distributions did resume in mid-2025, payouts were significantly below the pro forma. I've been told it's mostly due to competition in the area.
The 2 Managing Partners for Self-Storage are no longer with the company, a fact which was not proactively communicated to me...I only learned this after asking. So I'm not sure if it's bad property/market selection or internal mismanagement. I have been in continued contact with the IR team and they are responsive, providing explanations for the various underperforming deals. Various factors have impacted the 3 deals but at this point we're 0 for 3, so I've lost faith and do not plan to re-invest. I also referred a family member to them for a multi-family deal in 2022, and it seems to have been a bust from the start, so that hurts. It was a brand new MFH property in a great market but they just can't get any distributions going and have since asked for a bail-out via add'l capital via Promissory Note for other investors. I can only assume it is due to interest rates. Just hoping we can work together to make the best of the situation and I can eventually make some real money beyond low single-digit annualized distributions.
In hindsight, I shouldn't have invested in the Car Wash deals because this was new to PIC...I should have used Passive Pockets or a site like this to find experienced Car Wash operators with a track record of know-how and proven results.
