DJR Cos. creates value out of real estate through a unique technical expertise in site design, entitlement, and repositioning real estate for a more profitable use. The firm integrates this with professional financial modeling and market analyses to determine the use around which development is designed.

This expertise creates significant value by solving site development issues on the raw land, or otherwise underutilized real estate, DJR targets (and others pass over), thus creating opportunity.

Capital is placed in relatively small development sites typically with site development issues, to not compete with large public builders or exceedingly-capitalized master developers who are competing for “easier” sites. It only makes sense to target properties where DJR’s problem-solving capabilities can create the most value.

DJR Cos. pursues real estate development opportunities with total values under $15M (valuations dependent on the market), dove-tailing with our In-Demand Price Points strategy.

First time, move-up, and down-size housing are in high demand, the top of the bell curve, especially given key homebuyer demographic trends; and yet supply of “affordable” new housing stock is quite limited, especially in the markets we operate. As such, these projects move more quickly and entertain a large pool of potential buyers. It’s part of a risk reducing, profit maximizing strategy with built-in backstops.

Targeting the right “top line” affects our bottom line.

Each project is programmed with relatively small to zero debt financing until later in the project timeline, typically until construction begins, to maintain investor equity positioning. This minimizes entitlement risk by ensuring a loan is not coming due (or at least not a sizable one) during the period when time is most difficult to control, processing plans with the City. This also mitigates for recessions or even moderate downturns, allowing the project to move forward or pivot even in those scenarios.

(Of course, product choice and alternative scenarios help account for downsides as well. We’re happy to choose a “stand-up double” scenario over a “home run” if the risk does/doesn’t support it.)

Our vision is to spread investor capital across multiple projects out of a single (or series of) funds, as opposed to one larger development with the same capital raise. Smaller projects face less opposition, thus are much quicker to develop and offer returns, while providing diversification across submarkets with different buyer profiles and properties with different risk profiles.

For now, DJR’s funds are raised on a per-project basis. But, of course, investors may participate in several projects at a time.

Why real estate development? In simple terms, it’s where the particular capabilities of DJR Cos. have the most potential to create value, and hopefully the most profit. We don’t believe one ought to only invest in existing fixed income, “core”, or value-add holdings.

Some may call our investments “opportunistic”, and the outsized targeted returns reflect that risk level. However, DJR Cos. sees its job as reducing that risk profile by means of the company’s unique development expertise. Sure, hold some cash flowing assets possibly in a large fund or REIT. Yet also invest in growth creation.

Does an mfg. company purchase raw materials and just hope it appreciates? Of course not. It creates new product of higher value. That’s how DJR Cos. approaches real estate.

DJR “manufactures” new product out of its raw material, unentitled land or otherwise underutilized real estate. We invest in this value creation process to target risk-mitigated high-yield returns.