Can anyone give some suggestions/experience/comp in mission-driven RE? Also any recommendation of relevant firms? I I have 2-year experience in a small PERE and wanna look at opportunities of acquisition/AM/consulting in affordable housing, public-private partnership, and sustainability sector, so any affordable housing/social impact funds, advisors, or developers would be great.Thank you!
| +52 | Leave brokerage to be GP | 12 | 2d | |
| +49 | New Comp Database - Google Form (Now with Data Validation) | 24 | 2d | |
| +24 | Seeking Career Guidance in Real Estate Development Post-Graduation | 3 | 3d | |
| +23 | Going out on your own | 4 | 2d | |
| +23 | Spreads over SOFR/UST | 8 | 1h | |
| +22 | Real Estate = complicated + underpaid | 15 | 2d | |
| +22 | REPE/Development GPA | 15 | 5d | |
| +20 | High achiever that doesn’t want to work weekends | 12 | 13h | |
| +17 | Fisher Brothers | 6 | 2d | |
| +15 | Can you exit from Fund to Asset management or Investment in Real Estate ? | 22 | 20h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
The best examples of this are going to be local Developers who had a successful career (and made money) and then pivoted somewhere along the way to focus on local opportunities to revitalize certain areas, provide affordable housing, preserve historical monuments through adaptive re-use, and so forth.
The firms that are in, for example, affordable housing development are not mission driven so much as they've learned how to navigate a very bureaucratic system to their own benefit, generally through absurd fees. That's just the reality of the industry.
Agreed. The only way I see affordable developers actually making a positive impact is when they construct new housing in/for the low-income community. However, too many affordable developers just focus on generating fees by “fixing” up older housing stock and pushing up rents on low income tenants.
But that isn't affordable housing. That is regular multifamily housing. Affordable housing is a "thing," otherwise anything is affordable housing. Or I guess they call it "workforce housing" now. Actual affordable housing generally involves regulatory agreements which set rents, there is no "pushing up rents on low income tenants."
Agree with the above comments that there are no noble developers out there doing things out of the goodness of their heart. The only exceptions I am aware of are going to be non-profit entities but these are going to necessarily be hyper-local in focus and small in scope.
This is an interesting point. I'm in affordable housing development, and you're 100% correct that we have a profit motive. However, we make less than we might because we're committed to serving our residents well, providing them safe and healthy places to live, listening to their complaints, accommodating the requests of local elected officials, etc. This often hurts the bottom line. We do it because having a reputation for being good landlords and partners helps us win additional business - acting like slumlords would mean the end of working with all of our stakeholders, which means the end of the company. So sure, we're not "altruistic" in the sense that we do the right thing because doing the right thing is good for us. But at some point, doesn't that cease to matter? No one does anything for purely altruistic motives, but there comes a time when as long as you're doing well by people, does it matter what your motive is? Hell, the non-profits you mention are staffed by people who draw a paycheck: self-interested!
Heh, I should have disclosed that I am an executive at a non-profit, mission-based lender that counts a number of affordable housing developers as our clients. They (and we) are and should be managed based on financial results. No money, no mission.
I agree that those for-profit developers/owners are not driven by a kind heart. However, I prefer to stay in for-profit sector at the early stage getting better understanding of profit, then see if I would like to transfer to non-profit/public sector for the next step.
So affordable housing developers/owners would still be a good place to go as I am able to get exposure to social impact strategies even though most of strategies are for marketing. I know this reality but at least they are trying to make commitment to be convenient to do business with public
Affordable Housing Finance is an affordable-housing focused blog/publication (duh!) that puts out an annual Top 50 list for owners, developers, etc. Taking a look at that list will give you a good idea of the top players in the industry, at least the big national ones. Other than that, I'd consider perusing bond issuances from your state's housing authority, which might lead you to the active players for in-state markets, or if your state does RFQs you could check the pre-qualified lists of developers, contractors, etc to see who is active.
Presumably you could do the same thing with sustainability focused grants. New York is obviously big on this, so maybe this doesn't exist elsewhere, but you can probably find in the public record who wins NYSERDA grants and then follow the trail home. Or go look at the firms that attend large national conferences in whatever space you're interested in - usually the organizers will post past attendees as a way of drumming up excitement and interest for future events.
Beyond that, I hate to say that it really comes down to keeping your ears open and talking to lots of people. Sometimes the guys doing the most interesting stuff are pretty niche and stay under the radar.
As most here have already said, affordable housing is generally not actually a mission-driven business endeavour. Public-private partnership stuff and preservation of historic properties can be though and can still be profitable.
P3 stuff is usually just a specific team within a large multinational developer that has excellent reputation who a city wants to work with on their projects. The historic preservation-type projects are almost always local developers who are more artists than businesspeople but find creative ways to make their deals work. You need ot identify who does that type of work in your market and aggressively network with them.
From an affordable housing perspective, the only shops doing true, goodwill-driven affordable housing are either non-profits (e.g. Habitat for Humanity), or pension funds/institutions that have strict ESG targets they need to meet. The former pays poorly, and the latter can be mind numbingly boring because you're just LP money paying off your operating partners to build a couple affordable projects.
There are mission driven funds
Turner Impact Fund and a few others that are similar, they like buy apartments, then build schools then sell the apartments at a lower cap rate to the next guy bc the area is nicer without raising rents.
Idk the details obviously, but that is what I understood from it all
There are a few more layers to Turner Impact than value-add via gentrification created by adding charter schools but the premise is about right with the overall idea being to reduce tenant turnover and related operating expenses for improved NOI.
They target underserved areas that would benefit from a charter school and offer discounted or free rent to teachers that will in turn provide free tutoring during fixed hours each week. They offer the same to nurses that will provide nursing services (write prescriptions) during evening hours so tenants do not have to take time off work to get medical assistance. They do the same for police officers that will park their squad cars on site and lead neighborhood watch programs.
This approach doesn’t rely on subsidies and seems more altruistic than most approaches which are more centered on navigating the labyrinth of rules and regulations necessary to obtain subsidized capital and lucrative fees for providing rent regulated housing for low income tenants. There’s a lot of politics involved, working with municipal, state and federal programs to qualify and obtain capital for low income housing.
If you like grass roots politics, can navigate the regulatory landscape and like multifamily in underserved markets, then the affordable niche is a fit. Most MSAs have local players that are deeply involved community development programs and local events in support of affordable housing solutions. You might want to check out some of these events to see who the most visible players are and get a feel for the business.
Caveat: I’m not an affordable housing expert but have been around the block…
Sint et est repudiandae unde nisi rerum aut. Repellendus corrupti doloremque aut qui est nihil. Temporibus quaerat rem et quo. Et sint voluptatem consequuntur perferendis odio architecto quo.
Fuga debitis suscipit possimus doloribus amet. Ut nisi et autem odit culpa rerum.
Reprehenderit a iste aspernatur accusamus aut qui quasi eligendi. Quam deleniti commodi fugiat inventore ut ut. Nobis distinctio reprehenderit aut et autem omnis. Quia qui aut molestias ipsa saepe.
Hic nulla enim molestiae suscipit omnis aspernatur. Quo sapiente occaecati doloribus porro hic ipsa sint. Neque error dolore et neque.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...