Strategy We focus on high-performing multifamily properties, senior housing and student housing in carefully selected emerging markets, primarily in Texas and the Southeast United States. Multifamily Properties Multifamily housing has been the strongest performer in the commercial real estate sector for more than three decades— generating an average annual return of 9.75 percent. The sector has continued to generate healthy returns for investors despite pandemic-related setbacks in 2020, and market volume in 2021 is forecast to increase further. Multifamily complexes of 5+ units tend to qualify for different types of financing and typically offer higher returns due to the economy of scale that comes from consolidating property management and maintenance expenses for properties with multiple units under a single roof or common area, versus managing and maintaining multiple individual properties in various locations. Additionally, larger properties pose less risk from vacancy losses, because a vacancy in a single unit in a multi-unit property does not have the same negative effect on income that occurs when a single-family property or duplex suffers a vacancy. Benefits to InvestorsMonthly cash flowPassive incomeDiminished riskHigher forced-appreciation potentialScalabilityTax benefitsSimplicity of operations Senior Residential Facilities Senior housing is generally considered to be a sound asset for investors because of ongoing, growing demand by an aging population that in 2021 included an estimated 23 million Americans over 75 and 8.9 million over 83. The oldest baby boomer will not turn 83 until 2029, at which point a potential floodgate will open as the largest generation in U.S. history reaches the age at which seniors typically move into some sort of senior housing. With the American population living longer than ever, there will be a growing need for senior housing options that meet the changing standards of care and lifestyle of this group. Seniors housing investment generated an 11.6% annualized investment return over the past 10 years, as calculated by the National Council of Real Estate Investment Fiduciaries (NCREIF). Returns for both income and appreciation were higher for seniors housing than the overall property index as well as for multifamily. Due to its needs-based characteristics and the rising population of American seniors, the senior housing asset class is likely to continue to grow in popularity and yield reliable, rising returns until at least 2050, at which time demand may level off as the population requiring this type of asset class begins to decline. Major Types of Senior HousingAging in placeVillage conceptIndependent livingResidential careContinuing care retirement communityAssisted livingNursing home/skilled nursing facility Student Housing Student housing has historically been notable for its dependable cash flows and recession resistance since so many view a college education as a necessity regardless of the external economy. Unlike most property types, student housing maintains steady demand through recessions, as enrollment rises when the job market weakens, NMHC Research Foundation says. The sector’s performance in 2020 showed it to be a pandemic-resilient asset class as well. Throughout the first half of 2020, cap rates averaged 5.7 percent, in line with historical lows observed in 2019, according to a report from commercial real estate advisory firm Newmark Knight Frank. And cap rates were expected to remain near all-time lows as 2020 moved into a new year. Given that the average dorm complex on college campuses is more than 50 years old, more and more students are looking for off-campus options and as a result, student housing has been and is likely to remain a strong performer in a real estate portfolio. Investors like the fact that one or both parents are likely to sign on the lease along with a student who does not work full-time or has short or no credit history. This provides additional reassurance that rents will be paid on time and in full. Benefits of Investing in Student HousingEasy marketability (college towns already have vibrant attractions and amenities)Large pool of rentersConsistent cash flowHigh occupancy rates Target Markets Our main focus for investment properties in the multifamily, senior and student housing sectors currently is Texas and other select areas of the Southeastern United States, but we may also consider other geographic areas that meet our investing criteria. We employ extensive research and due diligence to identify “emerging markets” with the potential of high growth in jobs and population. Additionally, we look at such things as climate, local taxation and regulatory trends and other factors. As an example, Texas has long offered outstanding real estate investing opportunities, as it has been one of the fastest growing states in terms of population, has no state income tax, and is considered landlord-friendly. The state is home to many large Fortune 500 companies in a variety of areas including tech, health care, higher education, manufacturing and oil and gas, among others. All of this creates a high demand for rental properties, filled by tenants with stable employment, lessening investor risk. Many municipalities throughout the Southeastern U.S. display similar characteristics. Plus, the region is ripe for investing in student housing due to its growing populations and large universities.