Center Creek Capital Group, which is based in Washington DC and invests in properties across the Southeast, is a mission-oriented, for-profit housing investor and developer. Center Creek pursues three housing investment strategies across more than 1,000 homes and counting: rehabilitated single-family rentals, single-family houses for safe from affordable to luxury price points, and built-to-rent homes.
The market-rale and luxury homes in Center Creek’s portfolio help subsidize the price of the affordable for-sale properties.
“Our heart is in the affordable houses,” said Dan Magder, Center Creek’s founder and managing partner. “We have a responsibility to the people living in the homes and the neighborhood. That belief really informs how we have built up the company and how we go about what we do.”
Center Creek’s average single-family rental home measures 1,504 square feet and typically includes three or four bedrooms, off-street parking, and a yard.
“The average US home size peaked in the 2000s at around 2,700 square feet,” said Magder. “If you want to build more affordably, it requires smaller homes, lower building costs, and more efficient land use. We acquire a distressed house and build two or five new homes in place of it, which spreads the land cost across more homes. Then you can make the sale price or rent lower more naturally.”
Magder said the company pays attention to what best fits the needs and resources of each community. Some homes need garages for example, but in more walkable neighborhoods, parking is less important. In Center Creek’s BTR communities, central clubhouse buildings offer residents gathering spaces for classes, meetings, and student tutoring.
“We want people to stay longer because they see it as a home,” said Magder. “We can get relatively lower-income people into relatively higher-income neighborhoods. They can rent where they couldn’t afford to buy. lt’s more stable for parents, who can be part of their community. Kids stay in the school district longer. These are important things that we can provide in offering these houses as rentals. Why shouldn’t renters have that?
To more efficiently manage its properties and provide tenants with amenities, Center Creek is expanding its model to include more BTR. Unlike scattered-site houses, Magder noted that the BTR model allows for on-site maintenance staff who can attend to issues more quickly.
“If we treat our residents well, they stay in the house longer, and they’re likely to take better care of it,” said Magder. ”My repair bill will be lower, turnover will be lower, and I’ll have lower associated costs. That’s almost all I need to do to convince any investor, and we have a whole lot of impact investors who more fundamentally like what we’re doing.”
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