Infill Fund
Cre Infill Investments
HWG’s Infill Opportunity Fund (“CRE Investments”). The Fund is a risk-mitigated, high-yield investment vehicle specifically designed to capitalize on the high-demand market dynamics for infill housing development throughout select California markets. The Fund’s investments will focus on strategic acquisition of “covered land play” sites, comprised of under-performing and favorably-priced product with favorable residential redevelopment characteristics. The properties will then be entitled for residential development (both for-sale and rental units, depending on the market demand and city parameters), utilizing maximized density and cutting-edge development design. Upon attainment of the entitlements, the site will be sold to one of our national/public or regional builder. Income from the property (consisting largely of lower-occupancy office and commercial properties) will be used to “carry” the investment and provide risk-mitigating collateral during the entitlement and stabilization period, estimated to be 15-24 months.
Ample Collateralization / Downside Protection
Every project under consideration for the Fund will involve properties that reflect:
- 5% - 10%+ annual net yield for “covered land play” dynamics, allowing the venture to be funded entirely through property cash flow.
- Limited Value at Risk – The sites are acquired under a favorable acquisition basis whereby the collateral would be sufficient to liquidate the asset at or even above the project basis, in the event of an entitlement downside scenario
Strict Locational Criteria
Every project under consideration within the fund involve locations that reflect:
- Cities or jurisdictions that have high levels of required housing unit creation, favorable approval pathways, and adjacency to employment and/or major demand centers.
- Commercial sites will be the focus, with decreased likelihood of interference from organized single-family neighborhood groups.
Risk-averse Deal Structuring
Every project under consideration for the Fund will involve deal parameters that reflect:
- Fast Investment Cycle – Average project timing of 15-24 months.
- No Construction Risk – All construction risk is borne by the builder / purchaser.
- No Exposure to Debt Risk – All-equity hold, no debt shall be used.
- Pre-Sell Efforts – The exit dynamics shall be negotiated in advance of entitlement approvals, for expedited project timing
