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Posted Apr 17, 2023

An Interview with Antonio Marquez, Managing Partner at Comunidad Partners

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In this episode of The Distribution by Juniper Square, Managing Director Brandon Sedloff sat down with Antonio Marquez, Managing Partner at Comunidad Partners, to discuss the importance of building a multifamily community that holistically supports its residents, why Comunidad focuses exclusively on workforce and affordable housing, and the legislative actions underway to combat the current housing crisis.

Here is a portion of that interview edited for clarity. Watch an on-demand recording of the entire back-and-forth here or listen to this episode on Spotify, Apple Podcasts, or wherever you get your podcasts.

Brandon Sedloff: Your bio says you founded Comunidad to honor your family's immigrant heritage. For those that don't know, what does comunidad mean?

Antonio Marquez: Comunidad means community. It's a very simple word, right? But it can mean a lot of different things. And for me, it meant how can we engender this sense of community in multifamily apartments. A lot of times we think of real estate as sticks and bricks and the built environment. We get caught up in financial engineering and all the different aspects of the capital markets. But I think as an industry, we lose sight of what we are really doing. What is our real purpose and value add—it's the customer we're serving and the community we're building.

If you're attuned to the wants, needs, and culture of your tenants, that's when you're able to drive value. That's why we started Comunidad. It means we focus on people and the community in a way that drives value for all stakeholders.

We're a vertically integrated investment management firm. We've done about $2 billion in AUM, 15,000 units across 22 different markets—all workforce and affordable housing. Housing affordability, ESG, diversity, equity, inclusion, and PropTech are all also big components of our strategy.

Brandon Sedloff: What is workforce housing? And how is that different from affordable housing?

Antonio Marquez: The definition of workforce housing is housing that is affordable to households earning 60 to 120 percent of the area’s median income. But at the end of the day, that's just the technical definition. Our qualitative definition is if folks have too high of an income to qualify for government subsidies but not enough to afford Class A multifamily or buy a home—they're the middle that is stuck and doesn't have any support.

We saw a huge need for an owner-operator firm to provide for those families and those populations. Something that is on both ends of the spectrum, from a Class A to affordable—which is truly subsidized through project-based section eight, for instance.

We focus on providing a differentiated living experience for our residents because many other groups aren’t doing anything outside of the cookie-cutter approach to housing. That's our definition of the space.

Brandon Sedloff: Where do you invest, and what does your community look like? It sounds like more than just an apartment building where people come to put their heads down at night.

Antonio Marquez: We're invested in Sunbelt markets, but when you drill into even those markets and MSAs from a submarket perspective, there are concentric circles where you've got this urban core—white-collar workers, those with the highest income levels and high socioeconomic status. We’re looking for assets outside of that, the gray-collar and blue-collar suburbs and exurbs. These are the folks servicing the office buildings, working in retail, and making our cities and economies hum.

Our strategy revolves around knowing your resident and understanding what makes them tick. Some of that is having the cultural aptitude to understand them, and having shared lived experiences. I look at real estate as a conduit for providing services and support. We always want an excuse to have some sort of event or party. But even beyond that, we think about our residents from a health, education, and an economic advancement perspective. These are the things that families really need to rise.

We've rolled out a virtual healthcare program—many of our residents are uninsured or underinsured. Offering a virtual healthcare option that provided 24/7 access to nurses and nurse practitioners, doctors, prescriptions, and diagnostics was a game changer because our residents realized that we care for them. That created a lot of loyalty and built a sticky experience within our communities. And it made a lot of business sense because if our residents are healthier, they don't have to take as many days off of work, right? They can be there for their kids, they can support their families, they're more productive, they're earning more, they're healthier, they're happier—all those things where you get a symbiotic relationship with your tenants.

If you're investing in the right social impact investments that drive value for your residents, that also drives value for the property. The ROI is significant because of retention and word-of-mouth resident referrals. When families are getting taken care of, they're getting support, and they feel like they matter, they will refer all their friends and family. That's when it becomes this virtual cycle.

Brandon Sedloff: Let's talk a little bit about the affordable housing crisis. There's bipartisan support right now that provides some tailwinds for the sector. Can you talk about kind of what's happening from your perspective?

Antonio Marquez: Coming out of COVID, we had this massive runup in rent, which was problematic. It put a lot of pressure on renters throughout the country. The other challenge is that we don't have enough supply and must create more. Fortunately, many municipalities, localities, jurisdictions, city council members, and planning departments get it.

I'm very encouraged by the work that's being done right now at a federal, state, and local level. You've got Senator Wyden, a senator out of Oregon, that has introduced federal legislation to support the creation of new housing. There’s MIHTC, which is the middle-income housing tax credit that's being proposed to support the creation of product for residents of different income levels. You can also have a mixed-income housing product which I think is hugely beneficial. And then, at a local level, many more cities are coming in with subsidies, grants, density bonuses, and relief for parking regulations. You have accessory dwelling units, which is a really interesting new space.

The short game will be a challenge, as it always is when you've got to make a transformative shift. But from a long-term perspective, I'm pretty optimistic.

Want to get the full conversation? Watch it on-demand now.