PASSIONATE, DRIVEN, INTELLIGENT INVESTING
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Investors and Friends,
We are pleased to provide this monthly newsletter to share a real time update on what we are seeing in our markets, current projects and our future pipeline. With the heightened level of volatility we are seeing across markets, now more than ever it is important for the DB team to keep you informed as to what opportunities and threats we are facing at both a macro and micro level. Overall, we see tremendous opportunity on the horizon as a byproduct of the heightened volatility and we hope to leverage our collective resources to capitalize on adjusting market fundamentals.
As always we thank you for your continued support and please do not hesitate to reach out with any questions, inquiries, or interest in investment opportunities.
Devin Antin & Brennen Degner
Co-Founders | DB Capital Management
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From what we are seeing with impacts from interest rate increases to where we are seeing values in today’s market, check out DB Capital’s latest “In the News” section for an overview of our take on major trends we are seeing across our markets.
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Multifamily Rents Inch Up in March
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Multifamily rents increased slightly in March despite the nation’s economic challenges. According to the latest Yardi Matrix Multifamily Report, U.S. asking rents saw a $3 increase last month to $1,706, while year-over-year growth decelerated to 4% nationally, 90 basis points less than February and the lowest level since rents began their unprecedented climb in April 2021.
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CRE Supply and Demand Fundamentals Will Even Out in Long Run
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Outlook for apartments, retail, industrial, and most niche property types remain promising, especially on a long-term basis. As long as new demand outpaces new supply, vacancy rates go down and rents go up and all is good.
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Economic Insights for Uncertain Market Conditions
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How is regional bank turmoil, inflation and forecasts of continue interest rate hikes impacting the Multifamily sector? Host Alison Johnson is joined by Dr. Brad Case, Chief Economist and Director of Research for Middleburg Communities for a multifamily focused analysis that puts current market conditions in context.
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PROJECT SPOTLIGHT/ Ascent at Fitzsimons
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- 149 unit asset located in Aurora, directly adjacent to the multibillion dollar Fitzsimons medical campus
- Originally purchased in June of 2022
- After an extensive re-tenanting program over the last 6 months, including a timeframe where we had two full time armed security guards, we have successfully transitioned the profile of the property. The asset now reflects a desirable living environment for the average income renter and helps to fill the housing affordability void currently seen in the Denver market.
- We have now renovated over 35% of the asset and achieved an average increase of 20% or $200+ on the renovations. This is directly in-line with the original underwriting. We have approximately 20 more units slated for renovation over the next 60 days. This project continually maintains the highest amount of weekly traffic of any asset in our portfolio, we expect to see continued success and additional growth as we deliver more and more renovated units.
- There have been significant exterior/common area renovations completed that include; addressing major safety issues, delivering the new leasing office, exterior paint, fence and security gates and curing severe deferred maintenance inherited at takeover.
- Overall, this has been one of our heaviest repositioning projects in our track record. Between the physical issues, crime and delinquency we have addressed, the property represents a completely new living environment today when compared to takeover. We are happy to report that through that hard work the asset has now positioned itself as a Project Spotlight.
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OPEN INVESTMENT OPPORTUNITIES
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ASCENT AT UNION SQUARE
- Recapitalization of existing project
- 21% LIRR, 2.38x EM and 7.54% avg cash on cash over a 5yr hold
- Low leverage fixed rate loan with Fannie Mae
- 1990 built with some value-add still left. Most of the heavy work was done during our first round of ownership
- Limited space available on first come first serve basis
- Approximately $12,000,000 total equity raise
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If you are interested in investing or have any questions please contact
Brennen Degner
* Space is limited and will be offered on a first come first serve basis. Accredited Investors only.
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Where Are The Opportunities?
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With such a shallow deal pipeline to start off the first quarter of 2023 it has provided a unique opportunity for us to slow down and assess the landscape for where we see potential opportunities in the next 12 to 24 months. I have to admit, the current set of lenses is the blurriest we have looked through in a while
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CASE STUDY/ Summit at Hyde Park
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This month’s featured case study is Summit at Hyde Park, a 192 unit project we recapitalized in late 2022 following the implementation of our business plan over a two year period.
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- Well positioned core-plus asset with rental upside through minor renovations aimed at modernizing an otherwise well-kept asset
- Rebranded the asset to Summit at Hyde Park to play off the strengths of the named sub-market as well as gain marketing efficiencies generated through DB Capital’s portfolio branding strategy
- Implemented managed internet program to drive ancillary income and provide significantly more bandwidth & internet speeds for our residents
- Added covered parking to further drive ancillary income & provide additional amenities to our residents
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12045 E. Waterfront Dr, Suite 400
Playa Vista, CA 90094
(310) 205-2446
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