Experienced investors understand that driving profitability is crucial for protecting principal and achieving growth. However, there is a growing number of investors who also consider how they can use their resources to make the world a better place. Increasing focus on impact investing and ESG principles has created a dynamic tension between being profit-driven and being purpose-driven. Some investors worry about wasting opportunities to create positive impact, while others fear that focusing on impact will diffuse positive returns.
Many smart investors think they have to sacrifice yield for impact, and that investments can’t be driven by both profit and purpose. Over the years, we have demonstrated a strategic investment process that has produced an investment yield that is above market while still making a positive impact on people and the planet.
Since we started doing real estate investments with friends and family in the early 90s, we have done more than $3 billion dollars in total real estate transactions. Nearly $2 billion of this has been in multifamily residential housing, where we have acquired more than 15,000 apartment homes over the years.
We are proud of how we improve and operate these communities in a way that lifts the level of human flourishing for thousands of our residents and improves the environment, and not at the expense of good investment returns. We have found that doing right by people and the planet can actually increase investment returns in the long run. With all our value-add multifamily investment funds that have gone full cycle over the last 31 years, we have produced an average IRR of net of fees to investors of over 23%.
Our core business is buying multifamily apartment communities, creating value in the properties for our residents and our investors, and managing these properties well for long-term sustainable success. The result we seek is to improve the economic performance and therefore the value of each property and to do this in a way that improves the lives of residents and also helps the environment.
For us, this purpose-driven approach to real estate investing is not some gimmick to make it look like we are joining the impact investing or ESG bandwagon. Our purpose-filled approach to profitable investments flows from our passion and our values, which were in place long before impact investing and ESG were popularized terms.
Our leadership team wrestled with further clarifying a simple statement to define the passion behind why we do the hard work we do every day in business. Yes, we want to make money for our investors and team members. Yes, we want to provide great places to live for our residents. Yes, we all want to succeed. But when we narrowed it down to the fundamentals of what drives us to do all of this, it became very clear. Our passion is improving lives while creating a legacy of success together. What motivates us to get out of bed and do what we do every day is improving the lives of our investors, team members, residents, and everyone we interact with. What drives us is creating success and making continual progress on worthwhile dreams and goals we’ve established. This is not just for the here and now, but for the legacy we all want to create for future generations.
One of our company’s Core Values is “Building Beyond Business.” We believe that our business exists for purposes beyond financial interests. Our decisions and actions are based on motives and goals that will ultimately make a positive difference in lives and in communities. What we do today must always be measured against what will matter most beyond this life.
Based on this philosophical underpinning, we have pursued real estate investments with a purposeful, values-driven approach for over three decades. In upcoming articles, we will provide more insight into how this purpose-driven approach plays out in our management of properties. Our hope is that this inspires you to expand your expectations for your investments.
Our Investment Philosophy
You can and should expect rigorous business management disciplines that produce the best possible chance of creating profit and strong returns on your investment. In addition to financial success, you can expect your investments to be managed in a way that positively impacts people and the planet. When profit is inspired by purpose, we are able to create sustainable financial outcomes while making a positive impact in the world.