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Catalyst Real Estate Fund

 The American Workforce is an Underserved Rental Class, comprised of people employed in vital service occupations, typically hourly employees, outnumbering those with college degrees. Nearly three quarters of renters make under $50,000 annually*, pricing them out of Primary Class A rental markets and home ownership.


Housing costs have been a growing strain* on workforce renters, which affordable housing developments nonprofit Enterprise Community Partners defines as between 60-120% of an area’s median income.

More than a quarter of renters nationwide in this segment – out of 13 million total – are moderately cost burdened, meaning they spend over 30% of their income on rent. And 3.5% are severely cost-burdened, spending over half their income on rent, an Enterprise Community study found.

DEMAND

A report done by the Joint Center for housing Studies of Harvard University stated: “With rents for Class C units about a third lower than the market average, tightness in this segment indicates both ongoing demand for modestly priced rentals as well as a persistent shortfall in supply.”

According to a different 2017 State of the Nation’s Housing study by Harvard Research, the demand for workforce housing is also described as coming from a lack of supply. As the study found, while construction of high-end Class A properties has increased in recent years, it has fallen for the Class B and C properties.

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Percentage of American Population that falls into workforce housing bucket

  • 50% of American population makes up middle-class according to a report from Pew Research Center

  • Available units: 138.45 million* Housing units in U.S., 28.9 million units are multifamily (non-single family, or detached units) only 11.3 million* units (39.1%) appropriate for middle-class income or lower


Investors can earn

18% - 24% Annualized Projected Rates of Return

By partnering with Colony Hills Capital in the acquisition & repositioning of workforce housing properties.


 

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SUPPLY

How can the demand for workforce housing be met?

Development is not the answer. The cost of development along with market pricing in many cities make it nearly impossible to build new housing that the middle class can afford.

Older and aging properties can be acquired for significantly less that replacement cost and help feed the demand for workforce housing. Colony Hills Capital purchases Class B and C multifamily properties (1980's to early 2000's vintage) mostly in secondary markets, upgrades and manages them effectively, and ultimately delivers what we call “affordable luxury” to this market segment.

 Our Investment Process

  • Source: Our off-market deal sourcing network includes existing owners, brokers, independent acquisition and other industry related professionals, such as appraisers, property managers, and bankers, which leads to consistent deal flow. Our exhaustive investment due diligence process results in superior risk adjusted returns.

  • Renovate: We target undermanaged, undercapitalized properties in need of renovation. Our tailor made business plans allow us to optimize asset appreciation.

  • Manage: We are vertically integrated; our team has over 30 years of successful property management. Strong hands-on management throughout ownership insures execution of our business plan.

How does workforce housing compare to other real estate asset types?

Multifamily real estate withstands economic storms and downturns better than any other commercial asset type, as seen in Figure 4.

People will need a place to live regardless of how the single-family housing market is doing, or retail, or office, etc. Workforce housing is especially resilient because of its inherent affordability. Even families or individuals who have upper class income rely on affordable housing to save money for the future or for near term investment.  

 
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 CHC Track Record and Success

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