DB Capital July 2023 Newsletter

July 27, 2023

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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
    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.
    DB Capital recapitalizes Provo, Utah apartment community with Institutional Capital Partner
    DB Capital Management (DB Capital) has closed on the recapitalization of Ascent at Union Square in Provo, Utah, a 139-unit garden style community acquired by the Denver-based multifamily investment firm in December 2020.
    Apartment Market Continues to Loosen, Transactions Pull Back Further Due to Rising Cost of Capital
    Apartment market conditions continued to weaken in the National Multifamily Housing Council’s (NMHC’s) Quarterly Survey of Apartment Market Conditions for July 2023, as the Market Tightness (26), Sales Volume (40), Equity Financing (22) and Debt Financing (18) indexes all came in well below the breakeven level (50).
    Multifamily Demand Remains Steady as Rent Growth Slows
    Down 70 basis points from May, year-over-year growth for multifamily asking rents fell to 1.8% in June, while the average asking rent increased $7 from the month prior to $1,727, according to the Yardi Matrix National Multifamily Report.
    PROJECT SPOTLIGHT/ Summit at Salado Creek
    • 352 unit asset located in San Antonio, TX
    • Originally purchased in November of 2021
    • Have increased rents over 26% for an average increase of $268/unit on the renovated units
    • Completed all exterior, common area and amenity improvements in early 2023. With these improvements Summit at Salado Creek is now positioned with the highest quality amenities in the asset’s competitive set.
    DB Multifamily Value Fund I, LP
    • $200,000,000 total raise 
    • Fund Target Returns 16% IRR and 1.85x EM net to investors 
    • Value-Add and Core-Plus Multifamily Investments in our Target Markets
    • Capitalize on distressed opportunities and motivated sellers
    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.
    Leasing, Are We Back?
    With the exception of winter 2021/2022, all of the markets we are in historically have some level of seasonality. For various reasons across multiple markets (most common reason seems to be supply deliveries) we saw a very slow and prolonged winter leasing season this year.
    CASE STUDY/ Ascent at Union Square
    This month’s featured case study is Ascent at Union Square, a 139 unit project we recently recapitalized in June of 2023 following the implementation of our business plan over a two and a half year period.
    • Increased in-place rental rates by more than 47%
    • Increased ancillary income by more than 147%
    • Key driver of ancillary income was knowledge of the market ancillary income and professional management which led to increased utility income, renters insurance income, parking income and internet income
    • Renovated all exterior, amenity and unit interiors including adding a fitness center to the property
    • Recapitalization at a strike price that produced a project level 43% LIRR and 2.23x EM
    12045 E. Waterfront Dr, Suite 400
    Playa Vista, CA 90094
    (310) 205-2446