Hello,

The commercial real estate market has been notably impacted by the prevailing macroeconomic conditions. As inflationary pressures ease and the tight labor market shows signs of stabilization, the likelihood of an economic soft landing has increased. This scenario is particularly favorable for commercial real estate, as it is expected to enhance multifamily demand fundamentals and potentially lower interest rates. As the market dynamics shift, we are poised to seize emerging opportunities while continuing our capital raising efforts. 

All my best,
Gerardo Gutierrez
CEO DDelta REI

“The U.S. multifamily market continued a strong rebound in demand during the second quarter of 2024, with 170,000 units absorbed, the highest number since the third quarter of 2021. And while 180,000 new units were delivered in the last quarter, this was the smallest supply-demand gap in 11 quarters.” – CoStar.

Quarterly Highlights

• We are committed to creating a positive impact in our communities. Our team, along with our sponsor volunteered for Community First Village, a community that provides affordable and permanent housing to people coming out from chronic homelessness.
• We continue hitting key milestones with properties under construction. Framing is complete at The Everett, Junewood has received electric meters, and owner walks have started at Lookout as we prepare for our first deliveries.
• Rental rates for our properties on the market have consistently surpassed our initial expectations, averaging 6.25% higher during the second quarter of the year.

Company Update

• We have made significant progress in our ESG strategy by completing an ESG Due Diligence questionnaire for both existing and potential development partners and operators.
• We attended the Toigo NYC Gala in May and enjoyed connecting with different leaders supporting initiatives for diverse leadership in finance.
• We look forward to attending the NYC GCM Consortium in November, viewing it as an excellent opportunity to network and build strong relationships with new partners. If you are planning to attend, we would like to connect with you.

Insights – A Short Window of Opportunity

• Current interest rate dynamics and market factors have expanded cap rates by more than 25% in DDelta’s active markets since the Fed started raising rates in 2022, as of Q2-2024.
• With interest rates anticipated to decrease later this year and through 2025, cap rates are expected to compress with some lag, starting in the latter half of next year.
• This may present a significant but brief window to acquire properties at favorable prices before cap rates compress due to improving fundamentals and lower rates.
• DDelta continues to identify opportunities 15%-20% below replacement cost, a margin that may not last based on the expected dynamics, as shown in the graph below.
• Investing within the next 10 months positions investors to leverage the anticipated market shift, potentially achieving meaningful gains as valuations rise due to these dynamics.

Not an offer: This document does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only and on the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, any risks associated therewith and any related legal, tax, accounting, or other material considerations. To the extent that the reader has any questions regarding the applicability of any specific issue discussed above to their specific portfolio or situation, prospective investors are encouraged to contact Gerardo Gutierrez – CEO – or consult with the professional advisor of their choosing.

Past Performance: There is no guarantee that the investment objectives will be achieved. Moreover, the past performance is not a guarantee or indicator of future results. Forward-looking statements: Certain information contained herein constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events, results, or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Nothing contained herein may be relied upon as a guarantee, promise, assurance, or a representation as to the future.

Currentness: Except where otherwise indicated, the information contained in this presentation is based on matters as they exist as of the date of preparation of such material and not as of the date of distribution or any future date. Recipients should not rely on this material in making any future investment decision.

Confidentiality: This presentation is confidential, is intended only for the person to whom it has been directly provided and under no circumstances may a copy be shown, copied, transmitted, or otherwise be given to any person other than the authorized recipient without the prior written consent of Gerardo Gutierrez – CEO.

An investment in the Fund involves risks, including loss of the entire investment. For further risk considerations, see more here. here