SDS Capital Group closed on a $10 million deal through one of its funds for a 75-unit housing project in the Bay Area aimed at housing the homeless.
The Los Angeles-based private equity firm said RMG Housing will develop the building in Concord, a city in Contra Costa County, as part of its supportive housing fund. The housing project, at 1325-1335 Galindo St., will consist of 72 one-bedroom apartments and three two-bedroom units.
The building will be the first in the Bay Area under the $150 million fund. It will also be the second modular housing project, meaning key components of the building will be fabricated offsite.
“We’re committed to expanding the Fund’s geographic focus across California to support local communities struggling with increasing homelessness,” said Deborah La Franchi, Founder & CEO of Los Angeles-based SDS Capital Group, in a statement.
Construction is expected to start in the third quarter of 2022. Among the building’s amenities are office space for caseworkers, a rooftop terrace, a barbeque area, dining and lounge space, hydroponic tower gardens and a bike storage room.
Through its supportive housing fund, SDS plans to finance more than 30 projects that will total 1,800 permanent supportive housing units for those experiencing homelessness. La Franchi had said that their model, in which the companies handle virtually all of the land acquisition and construction components, allows them to stay nimble and efficient while not relying on government funding for land and construction.
SDS had said their strategy will result in units costing about $200,000 to build — $300,000 in the case of the Concord building — significantly lower than the state average for permanent supportive housing of $500,000 to $700,000.
The company also said that the process from closing financing to finishing construction will take an average of two years, as opposed to the typical five to seven years for permanent supportive housing.
Kaiser Permanente led the round of funding at $50 million. Other backers include Ally Bank, Synchrony Bank, Hudson Pacific Properties and the California Community Foundation.
The Bay Area had a homeless population of 28,200, third behind New York City and Los Angeles, according to a 2019 report from the Bay Area Council Economic Institute. Cities across the region recently conducted their homeless census for the first time in three years, which will give a more accurate picture of the Bay Area’s current homeless crisis since the pandemic began.
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