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Building a New Real Estate Investment Model
An experiment in real estate investing is underway in Philadelphia, where Steinbridge Group CEO Tawan Davis (MBA 2006) has made a long-term commitment to less-affluent renters in the city’s most rapidly gentrifying communities. “You want to see positive economic changes in a community, but you don’t want people who have been committed to and living in the community for generations to be displaced,” Davis says. “We can prevent that by creating rental opportunities for people who want to stay in their community.”
Philadelphia—like so many other major cities—has experienced a dramatic increase in housing values. The 19146 ZIP code, about a mile and a half from City Hall, experienced a 404 percent increase in population between 2000 and 2016, second only to downtown Los Angeles. That’s one of four such communities in the city where Steinbridge is buying and renovating single family homes that will rent for $900 to $1,400 a month. The goal is to ultimately manage 500 properties in Philly—a foothold for 500 families who might otherwise be displaced by rising prices, Davis says.
This is just the start of an approach that Davis says is both a good investment and a public good. Over the next three to five years, Steinbridge plans to invest $425 million in the acquisition and renovation of single-family rental properties in East Coast cities. “We believe this is an expandable, repeatable model,” Davis says.
(Published February 2019)
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