Q&A: IEC Celebrates 40 Years of Multifamily Investment 

Interstate Equities Corporation, Los Altos, Seattle, Orange County, Los Angeles, San Diego, Mission Valley, Yorba Linda

By Catherine Sweeney 

Since 1981, Interstate Equities Corporation, a Los Altos, Calif.-based investment company, has been investing in multifamily markets across California and the Pacific Northwest. After celebrating its 40th anniversary, the company is hoping to continue its growth. In 2021, the company expanded its team by 19 percent. Recently, The Registry had the chance to discuss this growth with Julia Boyd Corso, co-president and COO of IEC, and learn more about how the investment company’s strategies will implement further growth in the future. 

Q: Generally speaking, can you tell me a little bit about IEC?

A: Interstate Equities Corporation (IEC) was founded in 1981 and is an institutional fund manager that invests in and transforms apartment communities on behalf of endowments, foundations, family offices, and pension funds. We’ve invested in more than 120 apartment communities with our current thesis of implementing repositioning strategies via our integrated property management platform, which helps us secure and generate value for our partners.

Q: What specific sectors does the company specialize in? What locations is the company currently in? 

A: Our niche is finding dated multifamily apartment properties and transforming them into modernized, boutique-style assets at attractive price points. We currently specialize in renovating and repositioning value-add assets in durable infill markets throughout California and Washington – specifically the Bay Area, Orange County, greater Los Angeles, San Diego, and Seattle – where there is a tremendous opportunity for value creation and a lack of housing.

We are uniquely positioned in our markets, in many cases cultivating neighborhood-level expertise and economies of scale from transacting and executing our strategy repeatedly in the same growth submarkets.

Q: What has IEC learned from the past 40 years, and how will those lessons influence the future of the company?

A: We’ve learned the importance of improving apartment communities, while keeping rents affordable for residents in the communities we serve, at the center of everything we do. Cost conscious improvements yield more affordable living for our residents which is a win-win.

A well-designed investment process is instrumental to good decision making and execution. By keeping abreast of not only ever-changing data, but also community specific dynamics, we deepen our commitment to our residents and ultimately create value for investors.

Q: How has the company grown and/or changed over the years? 

A: Our evolution as a company has been unique. We started as a family-owned business, which has evolved over the last several years into an institutional private equity firm with diverse leadership.

Navigating multiple investment cycles, we went from syndicating deals in the first 19 years of our existence, to later investing high net worth discretionary capital and forming institutional separate accounts. For the past 7 years, we’ve invested on behalf of commingled institutional discretionary funds.

While we are able to operate at an institutional level, our cultural values endure, allowing us to be entrepreneurial and dynamic. Running a proprietary property management company keeps us humble and close to the real estate..

Q: How does the company set itself apart from other regional investment companies? What strategies does IEC employ to reach its goals? 

A: We take a multipronged approach to our investment strategy that allows us to capture both ends of the value-add multifamily market. We target smaller properties in infill locations that typically have been family owned for several years and lack hands-on management and necessary improvements. We also target larger-scale institutional quality assets that require a more strategic renovation. 

As a firm, we forge strong, long-term relationships and take an academic, data-driven approach to investment and property management. These components are at the core of the consistent results we deliver to our investors. 

Additionally, as part of our ongoing commitment to corporate social responsibility and diversity initiatives, we appointed a Director of ESG in 2020. This role enables us to operationalize our ESG goals.

Q: With the company growing its team by 19 percent over the past year, how will these new additions aid in the advancement of the company? 

A: The strategic growth of our team in 2021 includes additions ranging from an investor relations associate, an acquisitions associate, an asset manager, and a property accounting manager as well as several property management roles.

Bolstering both the corporate and property-level teams will expand our acquisition activity, provide consistent, quality management across our portfolio, and strengthen our company culture.

Q: Are there any specific investments over the past year you would like to highlight? 

A: In January 2022 we acquired a 146-unit community in Mission Valley, Calif. from families that owned the asset for decades. We also acquired The Bryant, a 400 unit community in Yorba Linda, Calif. Both properties reflect value-add opportunity in markets with strong fundamentals. Sales have been a focus as well which takes effort to do successfully.

Q: Looking ahead, what investment goals does IEC have for the future? How does the firm plan to continue its growth and development? 

A: We aim to continue to expand both our portfolio across California and Washington, as well as continue to hire great team members to support this growth. Our markets are large and deep so there is plenty to do and learn, leveraging our existing platform.

Additionally, we continue to drive new sustainability initiatives across our $1 billion portfolio and expand our recruitment and vendor pool to ensure diversity and inclusion at all levels. Excellent returns result from these values. We say “there is no mission without margin”.

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