David Asarch is the chief investment officer and a partner at Steele Properties, a Denver-based real estate firm specializing in the acquisition, rehabilitation, and construction of affordable housing. The growing company has completed over $900 million in activity involving more than 65 properties and 6,300 apartment units, including more than 55 tax credit projects.

David Asarch
Kimberly Benfield David Asarch

Here, Asarch shares which markets his firm is eyeing, the trends he’s watching, and his advice for others in the business.

As chief investment officer for your firm, what are you working on this year?
We are hard at work expanding our affordable housing portfolio, primarily by continuing to acquire, preserve, and rehabilitate project-based Sec. 8 properties in need of substantial renovations.

Is your approach to evaluating acquisitions changing?
We are focusing much more on the geographic location of the properties than we did in the past. With some exceptions, we are investing primarily in larger urban markets with growing populations and strong local economies. These properties are particularly vulnerable to conversion to market rate so it is important that we, and companies like ours, preserve these projects for the long term as quality affordable housing.

Steele recently bought its first Ohio property. What other markets are you looking at?
Our acquisition pipeline includes properties in Wisconsin, Virginia, and Alaska, all of which are new states for us.

What housing trends or issues are you watching?
We always keep a close eye on interest rates, tax credit pricing, and construction costs.

What’s your greatest challenge today, and how are you overcoming it?
As we continue to rehabilitate older project-based Section 8 properties, many of which have not been updated in any material way in decades, we are finding that the systems (plumbing, electrical, etc.) are nearing the end of their useful life so a tax credit renovation that even 15 years ago could focus more exclusively on the interior of the units has to be expanded to cover these additional systems, all while construction costs and acquisition prices continue to be very high. We perform the needed investigations on the front end to make sure we know what we are getting into.

What do you do better today than a year ago?
We are much better at planning than we were even a year ago. As part of our acquisition of affordable properties in need of major capital improvements, we typically are managing a rehab, resident relocation, increased security, the lease-up of down or vacant units, the stabilization of finances, tenant certifications, and file cleanup. This is more than a community manager is used to doing all at once, so we have made it a priority to plan well in advance for these transitions while also making sure that the project has the resources on the front end to tackle these many issues simultaneously. We also are very fortunate at Steele and Monroe Group, Steele’s sister company, to have crackerjack development, construction, operations, finance, and compliance teams to manage these complicated tasks.

Best advice you’ve received:
Constancy to purpose is the key to success.

Advice for other developers:
I have found that the most important thing to success in business is determining with whom you will partner. We are extremely thoughtful and discerning about the selection of our financial partners, and we select our lenders and investors from a very small cadre of financial groups. It is much better to forego some pennies on tax credit pricing or some basis points on interest rates and have a financial partner on the other side of the table who you can trust.

Besides the usual work items, what’s in your office?
Pictures of my beautiful wife and kids, photography done by my dad, and a makeshift putting green.

Any hidden talents?
Playing the drums.

Favorite fictional character and why:
Michael Scott from The Office because he’s hilarious without meaning to be.

What’s next for David Asarch?
Hopefully more of the same!