Prescient Launches New Investment Vehicle
The BIM design and building platform, which reduces the time and cost of constructing multi-unit housing using a proprietary modular construction system, has created Powered by Prescient. The subsidiary will acquire minority stakes in real estate development projects throughout the country. MHN talked with the company’s management to find out more about this new private equity firm.
By Laura Calugar
Prescient has launched Powered by Prescient, an investment vehicle subsidiary that will operate similarly to a real estate private equity firm. Powered by Prescient will acquire strategic minority stakes in promising real estate development projects throughout the U.S. In turn, the new arm of the company is meant to deliver superior risk adjusted returns for real estate investors by leveraging Prescient’s technology platform that reduces the time and cost of constructing multi-unit housing using a proprietary modular construction system. By partaking in a strategic equity stake at the outset of a project, Powered by Prescient aims to help drive needed efficiencies and productivity from concept to commercialization.
“Powered by Prescient is a means to align the interests of all constituents in a project—from the developer to all AEC participants that contribute to the success of a project. Our model-centric technology platform allows for a better way to plan, design and build. By using our digital thread, we can collectively deliver superior outcomes,” Prescient Executive Chairman Satyen Patel, told Multi-Housing News.
Prescient’s digital thread connects projects from the initial architectural design through the finished building. The platform liberates project stakeholders to plan and execute better. Consequently, a project is no longer a series of isolated steps with familiar breakdowns and gaps, but an orderly progression through a repeatable flow, connecting developers, designers, suppliers and contractors at every step. This results in higher productivity and quality, fewer last-minute conflicts on site, less waste, shorter schedules and a better ROI. Prescient uses precision manufacturing technology including robotics, laser cutting systems and flexible manufacturing systems to deliver buildings with very tight tolerances, comparable to the automotive industry. Prescient’s digital thread integrates planning and design with manufacturing and installation.
The Prescient extension is dedicated to developers, merchant builders and REITs, in conjunction with private equity players. Powered by Prescient’s approach is to take strategic minority stakes of up to 20 percent in projects that are a fit for its technology platform. “It helps align our interests with our customers’ outcomes and to demonstrate that we have the same motivation for better outcomes. We will help drive better project economics, compress schedules, reduce costs and improve coordination amongst all stakeholders involved in the success of a project,” said Patel.
Powered by Prescient’s leadership
Prescient board member Jeff Johnson is a founder of Powered by Prescient and will lead the organization. He will be responsible for identifying investment opportunities and driving future growth. Johnson has also acquired a 10 percent equity stake in the business.
Johnson is the managing partner for Lakeshore Holdings, a real estate private equity firm. Prior to that, he was CEO of Dividend Capital Diversified Property Fund, the largest public NAV REIT in the U.S. He also served as CIO and chairman of the investment committee at Equity Office Properties Trust and its predecessors, the largest publicly traded REIT and owner/manager of U.S. office properties, until Blackstone Group acquired the company for $39 billion.
“Powered by Prescient is a real estate private equity firm that succeeds by using the most disruptive and innovative products available for its building projects. We integrate those building innovations with investment innovations to produce superior risk adjusted real estate returns for our investors,” said Jeff Johnson, in a prepared statement.
Prescient has delivered a compounded annual growth rate of 119 percent during the past five years. From 2013 through 2016, the company focused on building multi-unit housing across Colorado, Florida, Nebraska, Missouri and Texas. In 2017, the company expanded its building footprint into Georgia, Illinois, Kansas, Kentucky, New York, North Carolina, Ohio and Oklahoma. Prescient built three million square feet of multi-unit housing from 2013 to 2016 and is slated to build two million square feet this year alone.
Prescient’s current project development pipeline exceeds 10 million square feet, which equals more than $300 million for delivery in 2018 and 2019. Prescient receives requests for proposals of more than 1.5 million square feet per week. As a result, the company recently doubled the size of its Colorado manufacturing facility and brought a second plant online in North Carolina in July 2017.
Image courtesy of Prescient