DF Capital Fund Raises $138M for Single-Family Housing

DF Capital Management exceeded its first close target for its real estate investment vehicle, DF Residential II, LP with $138 million of commitments.

DF Capital Management expects to keep Fund II open for a final close within six months. Fund II is working with Jacksonville, Fla.,-based Dream Finders Homes, which completed its initial public offering in January 2021. DFCM says it can scale its land platform with Dream Finders Homes and other builders.

Fund II is making investments to provide finished lots to homebuilders for the construction of entry-level homes. DFCM invests in fully entitled and shovel-ready land while ensuring all builder contracts and deposits are in place before land purchase.

“Housing is in short supply. When you consider the demographics and shift in living preferences as a result of COVID-19, it is unlikely that supply catches up with demand anytime soon,” said Chris Butler, Managing Partner of DFCM, in a prepared statement. 

By focusing on entry-level housing, DF Capital Management appears to be zeroing in on a sweet spot. As the single-family housing market has taken off during the pandemic, homes are increasingly becoming unaffordable.

The latest S&P CoreLogic Case-Shiller US National Home Price NSA Index reported that in January, the home price index was the highest recorded since February 2006, just one month shy of 15 years ago.

“The strong price gains that we observed in the last half of 2020 continued into the first month of the new year. In January 2021, the National Composite Index rose by 11.2% compared to its year-ago levels,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI.