Colony Hills Capital

Colony Hills Capital is a privately held real estate investment firm formed in 2008 and focused on the acquisition, ownership and management of value-add multifamily apartment properties in secondary markets. We offer specialized focus on one market segment; mismanaged, underperforming and undervalued workforce housing multifamily assets in strong submarkets. Our extensive and worldwide network of relationships uncovers significant opportunities, allowing us to respectfully achieve a “win-win” on the purchase. Each business plan is property specific; targeted capital improvements and strong hands-on management throughout the hold period maximize asset value and investor returns. The Colony Hills team is always looking to expand our network of investors and we have several different investment vehicles to offer. If you are interested in learning more about our proven track record of resilient multifamily investment opportunities, please visit our website to join our investor team: www.colonyhillscapital.com #colonyhillscapital #multifamilyinvesting #multifamilyinvestors

Real Estate Waterfalls: An Overview A waterfall is a key piece of any real estate investment as its “flow” determines how returns will be paid out. The waterfall dictates the hierarchy of how returns are distributed to investors and the transaction’s sponsors.  We’ll explain the roles in a private equity real estate deal, when a waterfall is used for returns, and how a waterfall works. What Are The Roles in a Real Estate Deal? There are two primary roles in a real estate deal: General Partner: The General Partner (GP) is responsible for day-to-day management decisions, property management, and overall investment strategy. Unlike LPs, GPs have more liability and therefore take on more risk in a deal. Limited Partner: A Limited Partner (LP) is an investor who provides capital to the partnership but does not actively manage the investment or the day-to-day operations of the real estate project. They are inactive except for major decisions such as the sale of the property, refinancing, or a change in property management. What share of returns does each role get? The General Partner and Limited Partner typically receive their share of sale proceeds based on a waterfall structure. This waterfall structure introduces a variable percentage split based on IRR (internal rate of return) hurdles for a real estate deal. As the IRR increases, the GP will receive a larger share of the sale proceeds and the LP will receive a smaller share. How is The Equity in a Real Estate Deal Structured? There are two common forms of equity that Colony Hills Capital has offered in our multifamily real estate deals: Preferred Equity  Pro Rata JV Equity What is Preferred Equity? In a deal with preferred equity, the preferred equity provider (the LP) usually provides 25-50% of the equity and they have a priority return of 6-8%, meaning any available cash flow the property produces goes towards paying the preferred equity provider 6-8% on their investment. Upon sale they get their initial contribution back, get caught up on any missing priority return, and an additional accrued interest of another 4-6% (for a total of 10-14%).  The benefit of preferred equity is that these investors are paid first. However, if the deal outperforms, investors with preferred equity do not get the benefit of any upside and are capped at a 10%-14% return. What is JV Pro-Rata Equity? Pro Rata is a Latin phrase meaning “in proportion” and deals structured this way will follow a waterfall structure where the GP and LP will receive a proportionate share of the returns based on their initial respective equity contributions. Book A Call: bit.ly/CREFIIIZoom ColonyHillsCapital.com #colonyhillscapital #multifamilyinvesting #multifamilyinvestors

Exciting news! Balfour Beatty’s first Northeast #acquisition, Mount Laurel Crossing, a 296-unit property, in partnership with Heitman and Colony Hills Capital, marks a significant expansion of our #residentialportfolio. This strategic move highlights our commitment to growth in our local market.

Why Invest in Workforce Housing There is no shortage of options when it comes to investing in multifamily real estate, which can present a difficult decision for new investors. Should you invest in triple-deckers? Luxury condos? Or gated communities? For real estate investors seeking a strategic opportunity, workforce housing is an excellent option. Workforce housing caters to middle and lower-middle income earners and it can be a stable investment through turbulent economic times. At Colony Hills Capital, we specialize in investing in this sector of real estate through our individual property deals and funds. What is Workforce Housing? Sometimes referred to as “Class B” and value-add, workforce housing represents a critical segment in the real estate market, designed to accommodate the housing needs of middle-income workers and their families. This demographic often includes essential workers such as teachers, firefighters, nurses, and law enforcement officers. The primary goal of workforce housing is to provide quality, accessible living spaces in proximity to employment centers. Unlike the terms “affordable” or “low-income housing,” workforce housing caters to a broader income range, typically targeting households earning between 60% to 120% of the area’s median income. Benefits of Investing in Workforce Housing Workforce housing presents a unique opportunity for real estate investors for three key reasons: There is stable demand for it It can generate attractive returns while making a social impact Value-add investments can increase the chances of a profit Stable Demand and Lower Vacancy Rates Workforce housing caters to a substantial and often underserved segment of the market. This consistent demand translates to lower vacancy rates for workforce housing properties. While no investment is “recession-proof”, this slice of real estate tends to be less susceptible to economic downturns as the demand for workforce housing remains constant. This helps to ensure a more stable occupancy rate compared to luxury or high-end real estate options. Attractive Returns with Social Impact Investing in workforce housing offers the dual benefit of financial returns and positive social impact. Properties in this segment often yield attractive returns due to their lower vacancy rates and stable rental income. By providing quality housing for middle-income families, investors contribute to the community’s well-being. Opportunity for Value-Add Investments Value-add properties benefit from upgrades or renovations that enhance the living experience without drastically increasing rental costs. By strategically investing in these properties, we can create a win-win scenario where both investors and tenants benefit from the enhancements made to the property. Book A Call: bit.ly/CREFIIIZoom ColonyHillsCapital.com #colonyhillscapital #multifamilyinvesting #multifamilyinvestors

Real Estate Sponsor Promote: What Investors Need to Know When investing in alternative investments like multifamily real estate, you’ll come across the term “promote.” Also called “carried interest,” this term is a bit of jargon that boils down to the sponsor’s disproportionate share of the profits. What Is the Promote? The promote is a financial incentive given to the sponsor or manager of a real estate investment deal. It is an additional share of the profits that the sponsor receives beyond their initial equity investment in the project. In real estate, the promote is a way for deal sponsors to earn a larger share of the profits if they successfully manage the investment and achieve the targeted returns. This incentive structure encourages sponsors to work diligently and make decisions that maximize returns for all parties involved. Why Does the Deal Sponsor Get a Promote? There are a few reasons that the sponsor earns the promote as the investment hits new milestones: The promote aligns interest: The promote ensures that the sponsor’s financial interests are aligned with those of the investors, encouraging them to make decisions that benefit all parties. Compensation for expertise: Sponsors often have specialized knowledge and experience in real estate investing, and the promote compensates them for their skills and efforts in managing the investment. Incentive for performance: The tiered structure of the promote incentivizes sponsors to work hard and maximize returns, as they can earn a larger share of the profits if the deal is successful. It shares the risk: By investing their own capital in the deal, sponsors share some of the risk with investors. The promote rewards them for taking on this risk and successfully managing the investment. So the promote isn’t just a bonus for the sponsor, it compensates them for their due diligence and effort while aligning their interest with yours. Book A Call: bit.ly/CREFIIIZoom ColonyHillsCapital.com #colonyhillscapital #multifamilyinvesting #multifamilyinvestors

What is a Multifamily Fund?  How to Invest in a Diversified Portfolio. A multifamily fund is an investment that pools capital from multiple investors to acquire and manage multifamily real estate properties, such as apartment complexes. These properties can be anywhere in the country, though most firms specialize in certain markets. Multifamily funds are typically structured as private equity funds managed by experienced real estate investment firms. These funds generate a return for the sponsor and investors through a combination of rental income and the appreciation and sale of the property. Multifamily funds allow individual investors to gain exposure to the multifamily real estate market without having to purchase and manage properties themselves. Book A Call: bit.ly/CREFIIIZoom www.colonyhillscapital.com #colonyhillscapital #multifamilyinvesting #multifamilyinvestors

Why Now is the Best Time to Invest in Multifamily Colony Hills Capital is in a great position to take advantage of the opportunities we are beginning to see as the next up cycle in real estate takes hold. Our steadfast commitment to building our Team has put us in solid position to buy, manage, and profitably harvest future deals. As we continue to adapt to evolving market conditions, we remain focused on delivering value and seizing opportunities for our investors. Book A Call: bit.ly/CREFIIIZoom www.colonyhillscapital.com #colonyhillscapital #multifamilyinvesting #multifamilyinvestors

How to Invest When Interest Rates Are High In mid-2022 the Federal Reserve began raising the Federal Funds Rate in response to persistent inflation and held these rates at their highest levels in over 20 years. The effort to curb spending and lower inflation can present the risk of slower economic growth for investors. This raises an important question: how should you invest when interest rates are high? Book A Call: bit.ly/CREFIIIZoom www.colonyhillscapital.com #colonyhillscapital #multifamilyinvesting #multifamilyinvestors

Colony Hills Capital offers an opportunity to invest along side family offices, fund of funds, and high net worth individuals in the tech and medical industries. Fund Details: 2-2.5x Equity Multiple 5 Year Term 4-7 Targeted Properties / Markets Book A Call: bit.ly/CREFIIIZoom www.colonyhillscapital.com #colonyhillscapital #multifamilyinvesting #multifamilyinvestors

Colony Hills Capital is a privately held real estate investment firm formed in 2008 and focused on the acquisition, ownership and management of value-add multifamily apartment properties in secondary markets. We offer specialized focus on one market segment; mismanaged, underperforming and undervalued workforce housing multifamily assets in strong submarkets. Our extensive and worldwide network of relationships uncovers significant opportunities, allowing us to respectfully achieve a “win-win” on the purchase. Each business plan is property specific; targeted capital improvements and strong hands-on management throughout the hold period maximize asset value and investor returns. The Colony Hills team is always looking to expand our network of investors and we have several different investment vehicles to offer. If you are interested in learning more about our proven track record of resilient multifamily investment opportunities, please visit our website to join our investor team: www.colonyhillscapital.com #colonyhillscapital #multifamilyinvesting #multifamilyinvestors