March 29, 2022
SDS Capital Group’s Impact Fund to Finance RMG Housing Construction of 75 Units for Individuals Experiencing Homelessness; Expanding Reach Beyond Los Angeles Region
Concord, CA – March 29, 2022 – The $150 million SDS Supportive Housing Fund (SHF or Fund)— a first-of-its-kind private-equity impact fund that finances new, financially-sustainable permanent supportive housing (PSH) for individuals experiencing homelessness – has closed $10 million in funding to develop modular housing in Concord, California. Currently occupied by a commercial glass business and a vacant single-family home, the project site at 1325-1335 Galindo St., Concord will soon to be transformed into 72 one-bedroom and three two-bedroom units. The Galindo complex is the Fund’s first Bay Area project and second project to utilize modular units as a key component of the building’s construction plan. SHF previously provided a $1.6 million land loan to RMG Housing to acquire the site in July 2021. This current close provides an additional $8.7 million to finance construction.
Managed by Los Angeles-based SDS Capital Group, the Fund is usually the sole source of capital for PSH projects developed by RMG Housing – providing as much as 97% of the total acquisition and construction capital. The Fund’s “one-stop” model significantly reduces underwriting and closing time for typical PSH projects from an average of 5-7 years to approximately 24 months from initial underwriting to tenant move-in.
Among the more notable attributes of the Fund’s financial structure is its ability to provide a streamlined and quick funding turnaround that allows a project to break ground much sooner than what is typical within the industry. PSH developments usually need a multitude of funding sources which can take developers years to aggregate. Another key SHF point of distinction is a focus on investing exclusively in projects that are expected to be financially sustainable over the long term. This requires that the SHF Fund’s individual cost per PSH unit in the Bay Area to cost no more than $300,000 – as compared to the $500,000 average in the current California market. According to bayareaeconomy.org, financing issues and per-unit costs are often cited as the foremost obstacles to developing much-needed housing for the Bay Area’s homeless population, which currently exceeds 35,000.
To further reduce development costs, the Galindo development will utilize a modular construction design. This design model will significantly reduce the length of time to build the project.
“This is SHF’s first investment in the Bay Area,” said Deborah La Franchi, Founder & CEO of Los Angeles-based SDS Capital Group. “We’re committed to be expanding the Fund’s geographic focus across California to support local communities struggling with increasing homelessness. It’s imperative we find solutions to help these members of our community find a home.”
The SDS Supportive Housing Fund is on track to finance a total of 1,800 units of permanent supportive housing, mostly in the Los Angeles area. With the Galindo development, the Fund has now financed a total of seven PSH projects (six in Los Angeles and one in the Bay Area) for a combined total of 385 newly constructed units of PSH.
“The Galindo project is the result of an innovative partnership between SDS and RMG,” said Tim Roth, CEO, RMG Housing. “Once the project is operational, tenants will receive on-site social services and resources that will be important tools to help them rebuild their lives in the safety of their new home.”
Located within Contra Costa County, the Galindo project is just 0.84 miles east of the State Highway 242 and within walking distance of the Concord Bay Area Rapid Transit (BART) station.
Construction is scheduled to begin in third quarter 2022. Building amenities will include office space for caseworkers, a rooftop terrace, a barbeque area, dining and lounge space, hydroponic tower gardens and a bike storage room.
Los Angeles-based SDS Capital Group serves as manager of the SDS Supportive Housing Fund. Founded in 2001 by Deborah La Franchi, SDS Capital Group manages a platform of impact investment funds – each with a distinct geography and investment strategy. SDS has been recognized for the past four years by ‘ImpactAssets 50’ as one of the top impact managers globally. With six funds and finance products on its platform, SDS currently manages over $1 billion in impact assets. The SDS Supportive Housing Fund is the company’s newest fund. It focuses solely on financing permanent supportive housing (PSH) developments in California that are financially sustainable and provide case management support services. Investors in the Fund include: Kaiser Permanente, Ally Bank, Synchrony Bank, Pacific Premiere Bank, East West Bank, Charles Schwab Bank, CIT Bank, the Weingart Foundation, First Republic Bank, Western Alliance Bank, Hudson Pacific Properties, California Community Foundation, and the Annenberg Foundation.
RMG Housing, based in Los Angeles, is a developer of permanent supportive housing (PSH) for individuals and families experiencing homelessness. Each property RMG develops offers on-site intensive case management services for residents. RMG’s core mission is to develop high-quality PSH units that are both cost-effective and financially sustainable. For more information, visit www.rmghousing.com
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Contact Sybil MacDonald,
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Tel: 323.376.8961
For more information on the SDS Supportive Housing Fund, click here.
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