Catalyst Real Estate Fund I
The Catalyst Real Estate Fund I LP was launched in June of 2020. The novel strategy of the fund places Investor dollars alongside Colony Hills Principals’ investment into the GP position on a deal-by-deal basis. In this way, the Fund invests only 5-8% of the equity into each acquisition, which offers reduced risk and maximum diversification. At the same time, the Fund’s position within the GP in each acquisition enables it to receive its pro rata share of the carried interest (or promote) born out of each JV waterfall. This combination enables an uncommon occurrence in the investment world: lower risk and higher reward.
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 than 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.
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.