By Austin DeNoce, Benzinga
For most, the words “housing crisis” invoke feelings of uncertainty and concern, but it is a very real and long-standing challenge in the U.S. The Government Accountability Office reports that high interest rates and low inventory are contributing to this issue, and it can be particularly challenging for low-income Americans to find affordable housing.
Yet, where there is a problem, innovative solutions arise. Enter DLP Capital, a potential game-changer in the housing market. The company is working on the dual objectives of providing affordable housing while offering potentially attractive opportunities for both communities and investors.
DLP Capital's Dual Focus: Housing Affordability And Investment
DLP Capital, established in 2006, has a history of active involvement in the real estate sector. With founder and CEO Don Wenner leading the company, DLP Capital has executed over 30,000 real estate transactions, translating to a total value of more than $10 billion. The company reports it has more than 25,000 homes and apartment units in its portfolio and $5 billion in assets under management and that it has positively impacted the lives of over 838,000 individuals.
Empowering Communities Through Housing Solutions
DLP Capital's initiatives aim to address societal challenges. One of their goals is to impact the lives of millions positively while striving to become the largest investor in rental housing. The company also operates according to specific core values including servant leadership, humble confidence, innovation and stewardship, and it believes in transforming lives through community building with safe, attainable housing as a primary mission.
The DLP Housing Fund is an open-ended, private real estate fund focusing on making an impact on America’s affordable housing crisis. The goal of this fund is to offer tenants <30% rent-to-income ratios, and the strategy is to preserve attainable rental housing through investments in existing value-add communities. The primary focus is on secondary and tertiary markets in the Sun Belt. For investors, this fund offers monthly preferred returns with 10 to 12% targeted annual net returns and tax sheltering benefits.
Other Investment Opportunities And Their Focus
The DLP Building Communities Fund is another initiative by DLP Capital that seeks to address the workforce housing crisis in America. The fund’s objectives involve investing in the development and construction of new rental communities, thereby providing attainable housing for those making incomes near the AMI. From an investment standpoint, the fund focuses on debt and equity in Sun Belt markets with strong demand, aiming to provide limited volatility and targeted annual net returns between 11% and 13%.
Meanwhile, the DLP Lending Fund serves professional real estate operators by furnishing the capital required for the development of affordable workforce housing. The fund’s data suggests offers of monthly distributions, liquidity and targeted annual net returns ranging from 9% to 10%.
DLP Capital's Initiatives – Brief Case Studies
DLP Capital's commitment to both community development and investor value becomes evident through specific case studies.
DLP Wexford Village
DLP Capital acquired the DLP Wexford Village in 2020 for $43 million. Comprising 340 units in 14 buildings, this vast residential complex offers housing ranging from one-bedroom to three-bedroom apartments. Under DLP’s ownership, the Wexford Village community experienced an evolution in resident engagement and support. The company says the staff's proactive approach during the COVID-19 pandemic was particularly noteworthy – they utilized daily video communications to stay connected with residents, expressing gratitude to healthcare workers with treats and helping residents navigate financial assistance programs to maintain housing security.
The Boyd Theatre Project
Situated in Bethlehem, Pennsylvania, the Boyd Theatre stands as a testament to the rich cultural heritage of the Lehigh Valley. Recognizing its potential and its historical significance, DLP Capital, in collaboration with local developer Rocco Ayvazov, embarked on an ambitious project to rejuvenate this landmark. Their plans involve converting the former movie theater into a multifaceted six-story apartment building. This redevelopment aims to encompass commercial retail space, an underground parking facility and recreational areas such as a pool, fitness center and an exclusive outdoor theater for residents. Overseen by the architectural firm SITIO, the project's completion is anticipated by Q3 of 2024, potentially adding a significant boost to local development.
Both case studies underscore DLP Capital's ability to synergize investment objectives with a tangible positive impact on communities, reflecting their overarching strategy in the housing landscape.
Balancing Community Impact With Investment Goals
As urban landscapes continue to evolve and economic dynamics shift, the challenges surrounding affordable housing will likely persist. Ultimately, housing is about more than structures; it's about building communities, fostering connections and ensuring that individuals have a secure place to call home. And in this intricate dance of community building and real estate development, DLP Capital is a proactive participant.
As the housing challenges of our time continue to unfold, entities like DLP Capital could play a crucial role in bridging the gap between housing needs and investment aspirations, seeking to craft a future where both coexist in harmony.
For more on DLP and how investors could get involved, click here.
This post contains sponsored content. This content is for informational purposes only and not intended to be investing advice.