Dear Investors & Friends of OpenPath –
2017 is off to an excellent start. Here’s a quick update and what’s ahead.
Just Finalized Our Largest Raise
We just wrapped up OpenPath’s largest capital raise of $22.6 million for our latest acquisition, The Eleven Hundred in Sacramento. In the process we welcomed over 20 new investors into the OpenPath family. Performance at The 1100 is already outpacing our initial financial model. In just the 3 months we have been working on this opportunity, revenues have already climbed to our 12-month target. At the same time, our loan was locked in at 4.36%, which is lower than we had modeled for. So we’re in great shape on this property right from the start.
Making an Impact on People’s Lives
As most of you know, one of the cornerstones of OpenPath is our commitment to improving the lives of our residents via our Urban Village community building programs. We made a big impact last year. Now we’re looking to do even more. Inspired by Thomas Friedman’s new book “Thank You for Being Late”, our UV team has been exploring new opportunities for social impact in Health, Security and Education. We’ll have more exciting news on this later.
Building on our Success
The purchase of The 1100 brings OpenPath’s total number of acquisitions to 26 since inception. Over the last 10+ years, we have sold 8 of these properties. (For these 8: Average hold was 2.7 years, 33% IRR, 2X Return on Equity vs. our target IRR of 15%). The 17 properties we currently operate are all performing at or above expectations. Annualized distributions to investors in Q1 averaged over 10%.
We see plenty of opportunity ahead. OpenPath’s model is based on long-term trends, strong fundamentals, and basic supply and demand. We don’t rely on an ideal short-term environment. The bigger reality is that in many growing U.S. cities demand for workforce housing is outstripping supply. OpenPath’s success is built on three core principles: 1. disciplined acquisition in these inventory constrained markets (we don’t overpay), 2. add-value via physical improvements and community building, and 3. strong operations/property management. OpenPath continues to build our expertise in all of these areas.
We just signed a contract on our next OpenPath investment opportunity, in Davis, CA. I will be sharing details next week!
Lastly, on a personal level, I am currently:
- Awaiting summer and a big family trip to Korea & Japan
- Reading “The Undoing Project” (good), “The Wright Brothers” (great)
- Heading to New York & Boston in May
- Writing (short posts): “What Most Investors Miss”
Looking forward to catching up with you soon. Don’t hesitate to reach out if you have questions or want to discuss.
David at OpenPathInvestments dot com | People. Planet. Profits.
Note: OpenPath investment opportunities are for accredited investors. Like all investments, OpenPath’s investments bear risks which are detailed in each investor brief. Please read before investing. I am not a CPA or professional financial/ tax advisor. All views are my own.