We recently launched the PPR Keystone Housing Growth Fund, built entirely around direct ownership of one real estate niche we have strong conviction in: build-to-rent (BTR) housing.
We’re drawn to BTR because it sits at a powerful intersection of demand; millennials reaching prime home-formation age, and older generations seeking the ease of renting without giving up the space and privacy of a single-family home. Both groups are converging on the same solution, at the same time, against the backdrop of another intersection: a multimillion-unit housing shortage and continued affordability challenges for the majority of the U.S. The Fund acquires BTR communities at or near completion, entering after development and construction risk has already been absorbed. This de-risked entry point into one of the fastest-growing categories in residential real estate is designed specifically to manage downside risk on behalf of investors.
To share more on why we believe in this opportunity, PPR recently hosted a webinar walking through the fund’s thesis, how BTR compares to traditional multifamily and what makes this moment right for PPR to launch a dedicated strategy in the space. If you missed the live session, or want to revisit any part of the discussion, the full recording is available below, along with the questions submitted by attendees.
Access the full webinar recording and more information about the investment thesis driving this fund:
We also wanted to answer questions we received that we didn’t get to during the call:
Capital Deployment & Preferred Return Timing
Q: If making an investment, how quickly will the capital be deployed and when will preferred return start?
A: Check out the recording to see that we have 3 opportunities ready to close in the near term and a robust pipeline of additional opportunities. Preferred return begins accruing the earlier of 60 days from investment or the next closing.
Q: When does the preferred return start and what does accruing preferred mean vs a normal preferred return.
A: Accruing builds up and is paid at closing of the fund rather than on a set schedule like current-pay. Consider it an investment hurdle, in this case, being paid prior to any upside split.
Distributions
Q: Please detail the expected distributions during the hold time.
A: The purpose of this fund is long-term value creation. The assets within the fund are expected to begin cash flowing during the term but investors should only expect meaningful distributions as assets being to disposition.
Tax Benefits
Q: Will you utilize cost segregation for accelerated depreciation?
A: Yes — paired with 100% bonus depreciation (OBBBA, placed-in-service after 1/19/25).
Q: If making an investment this calendar year, what is the rough estimated depreciation amount say per $100,000 investment in this calendar year?
A: A significant amount, in excess of 50%, is expected. However, as you know, the actual number varies based on timing of capital raised and deal closings, so it’s difficult to be more precise during the investment period.
Acquisition Criteria & Deal Sourcing
Q: What is the motivation for a developer to sell a set of properties during lease-up, below construction costs? It just seems like your acquisition criteria limits the potential projects you can bid on.
A: We are seeing a lot of opportunity in this phase, partially due to stubborn capital markets while the regulations were being debated and finalized.
Regulatory Impact
Q: How do you see the new housing bill affecting institutional investors?
A: Net tailwind for BTR — purpose-built BTR is exempted from restrictions aimed at firms with 350+ existing-home portfolios. One live tension: NoDa/Eastland’s individual platting vs. Vinewood’s single-plat structure is a real open question for future “true BTR” guidance.
Account Eligibility
Q: Can I invest in the Keystone Housing Growth Fund from a self directed IRA?
A: Yes.
Fund Structure
Q: Is the Keystone Housing Growth fund evergreen or closed?
A: It is a closed-end, $100M fund with a 5-year term from Initial Closing with a 1-year investment period.
