With rising construction costs, supply chain disruptions, labor shortages and a rising cost of debt for construction loans all expected to pose strong headwinds to new construction for the rest of 2022 and into 2023, a value-add strategy of buying older multifamily properties and renovating them is proving to be a lower-risk path to solid returns.

DB Capital Management, a Playa Vista, CA-based company with more than $500M in AUM, specializes in acquiring and operating multifamily properties in submarkets it has strategically targeted after closely analyzing market conditions.

In November, DB Capital put its bullseye over San Antonio, where it had projected steadily increasing demand—including a surge of in-migration—and limited supply of quality multifamily rental homes, which turned out to be an accurate description of the market in H1 2022.