Wolfson Development Company

About Us.

Wolfson Development Company is a cutting-edge, fundamentals-based real estate investor, developer and fund-manager focused on generating asymmetric, outsized risk-adjusted returns for its investors.

Formally launched in 2012 by Adam Wolfson to own his personal real estate investments, WDC has a current full-time focus on solving the now multi-generational challenges caused by persistent undersupply in the housing market, including both rental and for sale markets.

Strategy.

Focus

With broad institutional experience across most real estate asset classes and deep, specific experience in multi-family apartments and Build-for-Rent (“BFR”), WDC’s principals focus on identifying unique, investable opportunities, often with a focus on development. Given its significant experience in multi-family apartments, WDC recognized the early shifting secular trends in housing and became an early pioneer in the BFR space creating one of the first large-scale projects of its kind known as Cantabria, Bradenton. Since that time, WDC has focused nearly exclusively on residential rental projects including additional BFR and multi-family apartments.

Approach

WDC approaches investing with the following guiding principals:

Actionable Deals

WDC focuses on sourcing off-market investable deals with willing sellers and partners with a clear path to execution. WDC typically avoids marketed transactions or those for which execution risk is high.

Bulletproof Underwriting

Given significant experience with institutional partners, WDC understands how the most sophisticated investors underwrite and can match its own underwriting to those same rigorous standards.

Unique Structuring

WDCs principals have spent significant time at the forefront of capital markets structuring in the residential rental space, including BFR. Given this depth of experience, WDC understands market dynamics and has been able to use this this knowledge to create novel capital stacks and structures to reward its investors and protect against downside risk.

Deep and Specific Focus

WDC believes in streamlining its investment activities and creating investments that can be efficiently recycled. Currently, WDC is primarily focused on the BFR space given its deep familiarity in the industry and status as an early pioneer. In doing so, WDC can quickly underwrite opportunities, use existing infrastructure and projects and repeat similar, proven strategies while others are just beginning to understand the industry.

BFR

WDC is primarily focused in the residential rental space and almost exclusively on BFR transactions, generally in Florida and the SE USA. WDC understood early the changing dynamics in rental housing and has since dedicated its time to repeating the same model in other transactions. WDC believes that though the BFR industry will certainly continue to consolidate, there is enough runway for an institutionally capable and experienced developer to grab significant market share and create not just a series of transactions but a business around the space. Among the most significant trends we’ve seen:

  • The “aging-out” of traditional apartments as renters get older, start families and need more space.
  • Traditional apartments built since the late 1990s are primarily made up of studio, 1 and 2 BR units with only 5-7% with more than 2 BRs and are ill-suited to handle the need for more space.
  • Many would-be homebuyers simply cannot afford monthly payments as renting is generally less expensive and those that can afford the monthly payments often do not have the savings required for deposits nor the credit history to be approved for mortgages. In fact, more than 70% of all mortgages are written to those with credit scores over 760.
  • Those would-be homebuyers often turn to Single Family Homes for Rent (“SFR”) but the majority of this project is dated and only 3% of the houses available are professionally managed by institutional landlords. The rest are primarily older homes managed by small landlords and don’t provide the experience renters required.
  • There has been a systemic underbuilding of homes in the US and many studies estimate a deficit of 3-5 million homes versus demand and only 70-150,000 BFR units are projected to be delivered over the next several years.
  • Covid-19 took the already strong tailwinds for housing and increased them with a general urban exodus as people looked for more space to quarantine, work-from-home (“WFH”) and be able to distance and lower contagion risk. WFH will continue in a post-Covid world and should continue to inform housing choices for many, thereby continuing the cycle of demand outpacing supply for the foreseeable future.
  • Given the above, it’s not surprising that, post-pandemic, many institutional SFR landlords are experiencing double digit rent growth.