Why I Think More Investors Should Underwrite for More Than Yield

Every deal I look at gets run through the same filter: cap rate, hold period, exit assumptions. That's the job, and at Glencore Associates it's the discipline behind everything from our private fund to our real property holdings. But one relationship in our real estate portfolio never really passed that test on paper alone, and I'd make the same decision again.

Part of what we hold is leased to a community-based organization that helps people rebuild stability after financial hardship — in this case, women who need stable housing before anything else in their lives can stabilize. The lease reflects that: it's priced and structured around what makes the program work, not around maximizing what the unit could get on the open market.

Housing as the starting point, not the whole solution

I'm intentionally not naming the organization here. The people it serves didn't sign up to be a case study in someone's marketing, and their privacy matters more to me than the SEO value of a name-drop. What I can talk about is the model, because I think more property owners and investors should consider it.

My side of the partnership is the real estate: providing the physical space and structuring the lease around the program's economics rather than my own. Their side is everything a landlord has no business doing alone — case management, employment services, paid work experience, and the kind of practical, ongoing support that actually gets someone from crisis to independence. Stable housing without that support tends to be a pause button. Support services without stable housing tend to be theoretical. Neither works especially well by itself.

Why a real estate investor should care about this

I’ve spent my career underwriting risk — starting in healthcare consulting, and now across a private fund, public equities, real property, and a vehicle fleet at Glencore Associates. The instinct behind all of that work is the same one behind this partnership: look for the value nobody else is underwriting properly, whether that’s an asset the market has mispriced or a use of capital that other investors file under "charity" instead of "strategy."

Most investors don't structure a lease like this because the return doesn't show up in a pro forma. But there's a version of return that doesn't show up there either — fewer people cycling through crisis, a household with a foundation stable enough to plan from, a program that can stop worrying about its roof and focus on its actual work. I don't think that makes me unusual for wanting it. I think it's underpriced.

What I'd tell another owner considering this

This isn't a tax play, and I'd be doing everyone a disservice if I framed it as one. It's slower, it comes with more coordination, and the tenant is a mission-driven organization rather than a market-rate renter, which changes how you think about the lease from day one. If you're an owner or investor with a property that's sitting underused, it's worth asking honestly whether a partnership like this is a better use of the asset than another year of chasing the highest bidder.

I don't do this work for recognition, and I've kept the organization's name out of this piece on purpose. But I think the model itself is worth talking about — because the more investors who treat this as a legitimate use of capital rather than a charitable afterthought, the more of these partnerships get built. That's the kind of return I want more of my own portfolio, at Glencore Associates and beyond, to generate.

— David Bellairian