This content is brought to you by Swan Wealth Management
Authored by Steven Nathan and Dave Murray
Click here to read part 1.
Part 2:
- The case for US multifamily real estate
Multifamily real estate—apartment developments and rental communities—offers strong fundamental demand drivers, making it an attractive long-term investment. The investment thesis for US multifamily housing is built on three pillars:
- Low real interest rates and deep capital markets
The US benefits from structurally low long-term interest rates as the world’s reserve currency, making debt financing more favourable for real estate investments.
The country’s deep and liquid capital markets ensure steady access to funding, creating opportunities for well-structured real estate deals.
2. Robust demand driven by economic growth and migration
The US remains the world’s largest wealth-generating economy, consistently delivering real GDP and income growth.
Strong job creation and net migration trends—both domestic and international—are fuelling demand for housing, especially in high-growth urban centres.
3. Structural housing supply shortages and affordability constraints
The US faces a housing shortage of approximately 3 million homes, exacerbated by stringent development regulations and a fragmented development industry, dominated by local or regional players.
Homeownership affordability is at record lows, with rising interest rates making mortgage costs prohibitive. More people rent instead of buying, increasing demand for well-located, high-quality multifamily developments.
- SWAN’s investment strategy: A focus on high-growth cities
SWAN’s US Private Real Estate Opportunity applies a structured investment strategy to capture these positive investment dynamics. Our approach is based on three key principles:
- Target high-demand markets
SWAN focuses on high-demand locations such as Orlando, Florida, and Brooklyn, NY—regions benefiting from economic expansion, infrastructure development (such as the Brightline high-speed rail in Orlando), and ongoing urban regeneration. These markets are experiencing strong population growth, job creation, and housing demand.
2. Partner with proven local developers
Given the fragmented nature of US housing development (State and municipal area-specific rules and regulations), local expertise is critical to real estate investing. SWAN partners with established local development firms that are financially aligned, have deep experience across market cycles, and have exhibited efficient execution, budget efficiencies, and the highest quality standards.
3. Invest directly for optimal value capture
Unlike many real estate funds that pool investments across multiple strategies into broad portfolios, SWAN directly invests in carefully selected projects that align with a value-driven and direct investment strategy.
The investment approach includes ground-up developments and redeveloped buildings with 3-4-year investment horizons.
This “invest at cost, sell at market” model ensures that investors gain exposure to the full value opportunity rather than incurring additional fees for pre-assembled portfolios.
- Investment returns and structure
SWAN’s US Private Real Estate Opportunity targets net investor returns of 10% to 15% per annum in US dollars over 3-4 years. This offers a compelling alternative to public equity markets, where demanding valuations suggest moderated future returns.
- Tax and Cost Efficiency: The Actively Managed Certificate (AMC) structure offers tax and cost-efficient access to real estate investments without direct US estate tax exposure.
- Regulated Investment Vehicle: The Guernsey-domiciled AMC is issued through a Swiss-listed ISIN, ensuring transparency and compliance with international investment standards.
- Simplified Access: The AMC structure allows investors to gain exposure to Private US Real Estate without the complexities of direct property ownership.
- Key risk considerations
Whilst US Multi-family Real Estate presents a compelling investment case, investors should recognise potential risks:
Illiquidity Risk: Private real estate investments do not offer daily liquidity like publicly traded securities
Market Risks: Economic downturns, rising interest rates, and regulatory changes could impact investment performance
Investment Horizon: Investors should have a medium-to-long-term perspective, as real estate projects typically require 3-4 years to mature.
Regulatory considerations: As the AMC is not classified as a CIS, investors should review the investment structure in consultation with their financial/tax advisors.
Conclusion: A balanced approach in a changing investment landscape
As global equity returns moderate, private assets—specifically US multifamily real estate—present a structured, risk-adjusted alternative for investors seeking diversification. SWAN’s investment approach—targeting higher-growth geographic markets, a direct asset ownership model, and partnership with proven developers—offers a well-considered opportunity for those looking to allocate capital beyond traditional public markets.
For investors looking to diversify into real assets, SWAN’s US Private Real Estate Opportunity provides a structured, cost- and tax-effective vehicle to access select institutional-quality projects.
For more information, click here.
Ground-up development – Orlando, Florida
SWAN Wealth Management is a registered Financial Services Provider (FSP 53253). However, this investment opportunity is not classified as a Collective Investment Scheme (CIS) under CISCA, and investors should seek independent financial and tax advice before making any investment decisions. This article is for informational purposes only and does not constitute financial advice or an investment offer. Past performance does not indicate future results, and investments in private real estate carry risks, including potential loss of capital.
