Real Estate News and Market Moves Week 61

So Much Opportunity in Today’s Messy Market!

Since we launched and funded our first fund less than two and half years ago, Auben Capital Partners has spent a tremendous amount of time studying the market response to our conservative, value-seeking strategies, refining our systems, improving our data and operational execution, and recruiting the best available team members to help us perform at a higher level.

Based on this work and preparation, we can act more effectively and efficiently than ever in a market ripe with opportunities for seasoned SFR investors.

The biggest current opportunity we see is the volatility and messiness of the SFR market has caused many players (large and small) to be stuck on the sidelines. while so many micro-market opportunities still exist–driven by very basic supply and demand constraints.

As institutional players continue to move to BFR and stay stuck on the sidelines (cost of capital and infrastructure), Auben can continue to be nimble and operate in a niche that is sub-institutional but above the capabilities of our local and regional competition. As the market continues to normalize, it presents tremendous opportunities for the seasoned investor to deploy capital into excellent asset classes, while still, most importantly, maintaining optionality of exit strategies.

Our focus on workforce housing (B and C class) allows us the benefit of multiple exits: of hold and lease, sell (to owner occupants or investors), or refinance. As an example of this optionality of exit, our original strategy in our first fund, Columbia Growth Fund I, launched two and a half years ago was to increase rents, optimize the assets and sell the repositioned homes to investors.

However, based on historic interest rate increases, which overnight killed leveraged investor purchases, we pivoted to holding onto more of the assets in our fund and selling most of the homes to owner occupants. Based on extreme market conditions, we pivoted sharply from our original intent and have still significantly exceeded our targeted returns and initial timeline—delivering more than a 28% return in two years.

In preparation for the launch of Auben Residential Growth Fund, our asset management team has been working diligently, analyzing over 40,000 doors in all markets where we operate while also securing significant debt and equity that is ready and available to deploy.

We are currently launching our Auben Residential Growth fund, our first evergreen fund to give more flexibility to our investors. In addition to better returns, our new fund will also have annual redemption and contribution options (with restrictions). Investors will have greater flexibility to increase their contributions, including rolling dividends into additional shares in a tax deferred manner and accessing their capital when needed.

We appreciate that this is a journey we are taking together to grow and are excited to be able to offer improved investment opportunities. Thanks as always for your continued support, trust, and investment.

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