Features the First-Ever Use of the By-Right PILOT Program with Market-Rate Equity in Montgomery County, Maryland
December 19, 2024 News Release
Donaldson Impact Investments partnered with Affordable Homes & Communities (AHC), a leading regional non-profit affordable housing developer, to acquire Country Place Apartments in Burtonsville, Maryland, along the Route 29 Corridor, just 20 minutes from downtown Silver Spring. According to the Montgomery County Department of Housing and Community Affairs (DHCA), this is the only deal ever executed with the By-Right Payment in Lieu of Taxes (PILOT) program and market rate equity which was provided by New York Life and Declaration Partners, a private investment firm anchored by David M. Rubenstein.
This 312-unit, Class B apartment community marks the newly formed Donaldson Impact Investments’ first acquisition, and the innovative partnership with AHC secures the community’s long-term affordability and introduces new resident services.
“This acquisition is a strategic long-term investment for our company and aligns perfectly with our mission to acquire and preserve mature, naturally occurring affordable housing,” said Kevin H. Smith, Co-founder and Managing Partner of Donaldson Impact Investments. “Our focus is to lower operating costs, enhance the living experience for residents, and deliver value for our investors.”
Donaldson Impact Investments and AHC will commit 172 homes as dedicated affordable, of which 164 will be affordable to households earning up to 60% of the Area Median Income (AMI) and eight will be affordable to households earning up to 50% of AMI. AHC will implement and manage community and resident programs such as financial literacy, social services, and health education and wellness programs with a full-time onsite staff member.
“Our mission-aligned partnership attracts private market equity and leverages public policy incentives,” said Paul Bernard, AHC President & CEO. “This new acquisition adds critically needed committed affordability to Montgomery County’s housing stock. It also funds onsite resident services for all households, establishing a platform for resident success.”
Donaldson Impact Investments leveraged long-time relationships and a shared vision with New York Life and Declaration Partners to provide investment capital to address the critical need for affordable housing in the region.
“Economic opportunity cannot exist without safe and affordable housing,” said Kevin M. Smith, Managing Director, transactions at New York Life Real Estate Investors. “Affordable housing initiatives like this acquisition are a focus of New York Life’s impact investment strategy as they can create positive social outcomes while also delivering market rate investment returns for the company’s policy owners.”
“We are pleased to expand our strategic partnership with Donaldson Impact Investments and are proud to partner with New York Life and AHC in this important project,” said Todd S. Rich, Co-founder and Head of Real Estate for Declaration Partners. “The need for affordable housing is growing by the day and we believe that innovative capital solutions and investors can be part of the solution.”
The Washington, D.C., office of Cushman and Wakefield represented the seller and secured debt for the purchaser through Freddie Mac.
Montgomery County is one of Maryland’s leading jurisdictions in terms of supporting affordable housing development. The county has a history of using tax incentives, including PILOTs, as a tool to incentivize affordable housing development, both by non-profits and in some instances in partnership with private developers. PILOT payment is structured to compensate the local government for municipal services provided to the property, while still ensuring the ownership can fulfill its mission by providing affordable housing or social services.
Founded by real estate industry veterans Kevin H. Smith and Carlton Einsel, of The Donaldson Group, a regional property management and real estate investment company, Donaldson Impact Investments is dedicated to acquiring and revitalizing multifamily properties with a focus on achieving positive financial, environmental, and social returns. The company’s approach emphasizes sustainable property management, resident engagement, and community-based improvements.
“We are facing an escalating housing affordability crisis in the D.C. region,” said Carlton Einsel, Co-founder of Donaldson Impact Investments. “At Donaldson Impact Investments, we’re bringing together the right tools and expertise to implement innovative solutions that prioritize affordability, equity, and inclusion for the communities we serve.”
About Donaldson Impact Investments
Founded in 2024 by Kevin Smith and Carlton Einsel, Donaldson Impact Investments is dedicated to acquiring and revitalizing older multifamily properties with a focus on achieving positive financial, environmental, and social returns. The company’s approach emphasizes sustainable property management, resident engagement, and community-based improvements. The company will leverage Donaldson’s 20+ years of deep experience in the multifamily industry and its proven capabilities in complex central plant decommissioning, water, and energy savings programs.
About Affordable Homes & Communities
Affordable Homes & Communities (AHC) is a nonprofit developer that creates and preserves affordable and mixed-income housing in Maryland, Virginia, and Washington, D.C. Since 1975, AHC has developed more than 8,400 apartments in 54 communities. AHC’s mission is to build opportunity by creating quality homes with holistic resident services. AHC connects residents of all ages with onsite services that help transform lives, provide housing stability, and advance the economic resiliency of entire communities.
About Declaration Partners
Declaration Partners is a private investment firm that seeks to be a value-added capital partner and strategic resource to founders & entrepreneurs, management teams, and asset owners. Anchored by the family office of private equity veteran and philanthropist David M. Rubenstein, Declaration invests on behalf of family offices and like-minded institutional investors. Declaration’s approach emphasizes partnership born from its family office heritage while seeking to achieve favorable long-term outcomes with strong alignment. Declaration has approximately $2.2 billion in assets under management across its private investment strategies, which include real estate, tactical growth equity, GP solutions, and other opportunistic strategies. The firm was founded in 2017 and is headquartered in New York with an office in the Washington, D.C., area.
Media Contacts
Jennifer Smith, jennifer.smith@ahcinc.org
Kristine Warner, Kris@MaierWarnerPR.com