Why this investor involved his community in building a multibillion dollar real estate firm

BY Nii Ntreh June 13, 2024 4:05 PM EDT
Daryl Carter. Photo credit: Avanath Capital Management

Daryl Carter is the founder and CEO of Avanath Capital Management, a real estate investment firm with $4 billion in properties. But unlike many others, Carter’s company practises a community approach to housing and specializes in acquiring multi-family apartment communities across the United States.

Presently, it is the nation’s largest Black-owned affordable housing investment firm.

Carter was motivated to start his business after witnessing the effects of a lack of investment in communities in which he lived. Apart from that, after his family moved from Mississippi to Detroit in search of employment in the auto industry, Carter was introduced to his first lesson in entrepreneurship. Watching his father and uncles work side jobs such as repairs, hanging drywall and painting taught the young Carter that problem-solving was at the core of moneymaking.

But his family also inculcated hard work and education into their values and these attributes set Carter on his personal path to success.

After he earned a bachelor’s in architecture from the University of Michigan, Carter thought he would become an architect and as fate would have it, met one of Boston’s only Black real estate developers. This meeting was an eye-opener on the financial realities of building. But he also gained practical experience through the said relationship and had the chance to work on projects in the historically African-American neighborhood of Roxbury.

Carter followed his mentor’s advice to get advanced degrees, earning both a Master’s in Business Administration and a Master’s in Architecture from MIT.

After his graduate degree, Carter worked at Continental Bank doing workouts on unsold condominiums. His entrepreneurial skills were honed in this job. Later, Carter and a friend established their own real estate investment firm, Carter Primo Chesterton (later Capri Capital) in 1992. The duo received several rejections while looking for funding to start their company. Carter believes their background as African-Americans from a public high school in Detroit precluded them from the chances that are given to others.

But at this point, he was also an MIT educated architect with practical corporate experience. And he persevered with the motivation that he was going to succeed with half a chance.

“We didn’t look like who they typically bankroll. Eventually, on the 57th meeting, a company called Chesterton said yes. What happened with us is with each ‘no’, we got better. Every ‘no’ gives you information. You have to stay true to your vision, but you have to adjust that vision as you learn more about it,” he’d later recall.

They eventually managed to raise funding and built the business. Capri grew to become a diversified real estate investment firm with $8 billion in real estate equity and debt investments under management. The company was sold to Centerline Capital Group in 2005. Carter stayed on as Executive Managing Director for three years.

In 2007, Carter launched Avanath Capital Management which is named after his daughter, Ava, and son, Nathan. The real estate investment firm acknowledges eliminating myths about affordable housing as its key to success.

The company destigmatizes affordable housing through blending subsidized and non-subsidized units to ensure label free communities. It focuses on tenant retention, community building, and creating an affordable lifestyle within using renovation to make impactful changes such as washers and dryers.

“The number one myth [about people who don’t own homes] is these are people that don’t work and don’t have ambition. There are all these stereotypes of people who live in subsidized housing. The reality of it is if you look at who lives in subsidized housing today, everybody works,” Carter said in defence of those struggling to own homes.

In addition, Avanath maintains a strategic community approach to housing. The company provides programs such as vaccine clinics and accessible banking and has partnered with local nonprofits to provide after-school programming. It has also partnered with Amazon to provide Amazon Lockers for secure delivery of residents’ items. Carter has also testified on Capitol Hill multiple times on America’s affordable housing crisis.

Avanath manages rental properties in 15 states, with many of its 14,000 units meeting the Section 8 affordable housing guidelines. Some of its notable purchases include a $101 million high-rise in New York , two properties in California for $132 million, and a $119 million acquisition in Chicago which is one of the largest deals in the city’s history.

Carter is eradicating the stigma associated with subsidized housing. He has managed to turn his unconventional community approach to real estate into a billion dollar enterprise. He also serves as a Managing Partner of McKinley-Avanath, a joint property management entity by Avanath and McKinley in the affordable apartment sector.