Impact Investments in Housing
www.arrivatollc.com – There has always been the perception that family offices are impact investors strictly for the social impact regardless of the risk and return.
Sure, this has happened in the past in some degree.
However, the landscape is changing.
There are more family offices investing into investments that has social, economic, and environment impact. The difference is that many of these investments are now yielding returns that match some of their more traditional investment strategies.
We are realizing that social, economic, and environmental change can be realized without the expense of compelling enough returns.
We can actually invest in change, but create profit at the same time….amazing, wouldn’t you agree?
From our internal experience working with government entities across the globe, we see the substantial need for more private Ultra-High Net Worth families to take market-based leadership.
One of the current areas we are making a difference through partnerships has been within Affordable Housing, also known as Workforce Housing. Most developers are focused on developing Class A assets (one of our strategies in the Southeast) and acquiring Class A assets in major cities. With the exception of some of current development markets, there is more of a supply and demand challenge towards Multi-Family Workforce Housing. In other markets, assets current under the LIHTC (Low Income Housing Tax Credit) Program have been acquired by investors who are allowing these credits to burn off over the next few years and convert to Market-Rate units as part of their value-add strategy.
In most markets, we need more quality housing solutions for school teachers, police officers, and others who serve their communities. There are additional benefits to the community to bringing these public citizens into a transitioning neighborhood.
This is where a private capital solution comes into play.
Along the East Coast, we have been reviewing multi-family value-add units that can be utilized for workforce housing or existing buildings that can be converted or re-positioned into workforce housing (i.e. an outdated office building). As an example, in the City of Philadelphia, we have been evaluating infill opportunities with a minimum of 200 units to acquire or convert into a workforce housing solution.
#forevercompete; #winthisday; #innerelite