Ginkgo REIT is a tax-efficient, income-focused real estate investment providing exposure to rental housing communities in high-growth markets across North & South Carolina.
The Ginkgo Residential management team, the REIT’s Advisor, has a 40-year track record of investing across multiple economic cycles. Their investment strategy emphasizes discipline and long-term value creation, aiming to enhance asset performance throughout each phase of ownership.
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Share Price: $136/share
Dividend: $0.63 per share, monthly [5.56% annualized]
Dividend Reinvestment: Optional, but mandatory for capital accounts less than $100,000
Liquidity: Quarterly; subject to discounts during the first 5 years
Portfolio Target Leverage: 50-70% LTV
About Ginkgo Residential
The Ginkgo Residential team has extensive experience in property management, renovations, acquisitions, and asset management, with a strong focus on sustainability and resident satisfaction. Inspired by the resilience and adaptability of the Ginkgo tree, the company seeks to implement value-enhancing strategies across its multifamily communities while striving to deliver strong returns to investors.
Since its founding in 2010, Ginkgo Residential has prioritized environmentally conscious operations and long-term investment strategies in high-growth markets.
Vertically Integrated Platform Generates Operational Efficiency
With in-house property management, asset management, and construction management teams, the company seeks to maintain a competitive operational advantage, streamlining processes and enhancing efficiency across its portfolio.
Key Investment Focus
Strong Performance History for Investors
Since its inception in July 2019, the REIT has achieved an average annualized return of 11.8% with dividend reinvestment through December 31, 2024. While past performance does not guarantee future results, this return has exceeded the NAREIT Public Equity Index (+3.29%) and the NCREIF ODCE Private Index (+2.87%) over the same period.
High-Yielding, Monthly, Tax-Deferred Dividend
The REIT currently provides a monthly dividend of $0.63 per share (5.56% annualized yield), offering investors the opportunity to reinvest dividends and potentially enhance long-term compounding. Since inception, 100% of dividends have been classified as non-dividend distributions (return of capital) on IRS Form 1099-DIV. For investors in the highest marginal tax bracket, the 2024 Tax-Equivalent Yield is calculated at 9.53%. Future dividends are not guaranteed and are subject to change.
Exclusive Focus on Workforce Housing in the Carolinas
The REIT focuses on workforce housing investments in North and South Carolina—regions experiencing strong population and job growth. CNBC has ranked North Carolina as the #1 state for business for two consecutive years, reinforcing the state's economic expansion and demand for rental housing.
Hybrid Investment Structure
Approximately 60% of the company’s communities are owned through joint ventures in which the REIT serves as the managing partner. This structure allows the REIT the opportunity to participate in promote distributions earned through outperformance, potentially enhancing shareholder returns. However, returns are not guaranteed and depend on market conditions and investment performance.
Management and Investor Alignment
More than 35% (approximately $75 million) of the REIT’s total equity is held by employees, their family members, and members of the Board of Directors. This ownership stake reflects a commitment to alignment between management and investors, though it does not eliminate investment risks.
Disciplined Investment Strategy
The company has maintained a selective acquisition approach, purchasing fewer than 300 units per year over the past three years—compared to approximately 1,000 units annually from 2014 to 2019. This adjustment reflects a strategic response to evolving market conditions, including shifts in interest rates. Most recently, on February 12, Ginkgo REIT acquired The Preserve at Pine Valley, a 219-unit garden-style apartment community in Wilmington, NC, for $32.1 million in an all-cash transaction with a joint venture institutional investor.
Investment Strategy
The REIT aims to generate long-term, stable returns through the ownership and management of a portfolio of multifamily communities that meet the following criteria:
Targeted Property Characteristics:
- Investment in existing multifamily communities that were generally constructed before the 2000s, are well maintained, and have strong curb appeal
- Properties with opportunities for value-add renovations to enhance revenue potential
Strategic Enhancements to Increase Operational Efficiency:
- Improve cash flow through targeted interior, exterior, and infrastructure improvements
- Reduce future operating costs and optimize property performance
- Lower utility costs for residents through energy-efficient upgrades
- Extend the economic and functional lifespan of property components
Resident-Focused Approach:
- Enhance tenant retention through improved amenities and housing quality
- Promote habitable living environments and enhanced safety measures
Commitment to ESG and Sustainability Initiatives:
- Prioritize improvements that reduce energy consumption and environmental impact
- Align with responsible investing mandates to support long-term value creation
Holding Periods and Portfolio Management:
- REIT-owned properties: Target long-term holds of 10+ years
- Joint Ventures: Typical holding period of 3-7 years
- Implement community upgrades and proactive maintenance programs to support asset value
Operational and Financial Strategy:
- Optimize operational efficiency through economies of scale
- Acquire adjacent or proximate properties to enhance portfolio synergies
- Leverage technology and centralization for improved property management practices
Risk Management and Capital Structure:
- Maintain debt leverage below 70% of the fair market value of REIT-owned assets
- Current leverage is less than 63%
- Structure portfolio to mitigate risks in adverse market conditions
- Provide income potential through dividend distributions, subject to market performance and board discretion
The Ginkgo Residential Management Team
The Ginkgo Residential management team has a strong track record of managing and improving workforce housing communities while seeking to generate competitive returns for investors.
Industry Experience & Historical Performance:
The team previously led BNP Residential Properties, Inc. (AMEX: BNP), achieving a total return of 403% from 1997 to 2007, compared to the S&P 500’s 126% return over the same period.
Community Impact & Housing Initiatives:
Ginkgo Residential is committed to expanding access to quality, affordable housing while integrating environmentally responsible practices. The company collaborates with the Lotus Campaign and other local nonprofits to help address housing challenges and support sustainable community solutions. By partnering with for-profit and nonprofit organizations, Ginkgo aims to create positive social impact while pursuing long-term investment objectives.
William Green, Principal & Co-CEO
Bill Green joined Ginkgo in 2012. Before joining Ginkgo, Bill worked in banking, advisory, and investing. His most recent activities have been in private investing, having co-founded and managed two investment advisory firms. He was a fund partner and fund manager at Starwood Capital from 2007 to 2009, global head of real estate capital markets at Wachovia Bank from 1999 to 2007, and head of commercial mortgage securitization at Bank of America from 1990 to 1999. He has been a member of the board of directors at Arbor Realty Trust since 2012, where he is the lead independent director and a director on the board at Royal Oak Realty Trust since 2018.
He served on the board of trustees at his alma mater, the colleges of Hobart and William Smith, where he earned a bachelor’s degree in economics. He holds a master’s in finance degree from the Stern School of Business at New York University.
Eric Rohm, Principal & Co-CEO
Eric Rohm joined Ginkgo’s predecessor, BNP, in 2002 as general counsel. Before joining Ginkgo, he was a partner at Kennedy Covington Lobdell & Hickman, L.L.P. from 1994 to 2002, where he worked in the real estate practice. Among other duties, he served as the principal outside legal counsel to BNP. Eric earned a bachelor’s degree in government, magna cum laude, from Georgetown University and earned his juris doctorate from The Ohio State University College of Law where he graduated summa cum laude and Order of the Coif.
Eric holds a license to practice law in the State of North Carolina and he is admitted as a member of the North Carolina State Bar, the North Carolina Bar Association, and the Association of Corporate Counsel.
D. Scott Wilkerson, Chairperson of the Investment Committee
Scott Wilkerson joined Ginkgo’s predecessor, BNP, in 1987 and has served in a variety of roles, including president of BNP Residential. Before joining BNP, he was with Arthur Andersen LLP, serving as tax manager. He holds a bachelor’s degree in accounting from the University of North Carolina at Charlotte. Scott holds a license in North Carolina as a Certified Public Accountant and holds a license as a real estate broker as the principal broker for Ginkgo.
He serves on the board of directors of the National Apartment Association and has served as president of the Apartment Association of North Carolina and the Greater Charlotte Apartment Association.
Benefits of exposure to real estate with Ginkgo REIT
Competitive Set Performance
Since launching in July 2019, Ginkgo REIT has reported an 11.8% annualized average total return with dividend reinvestment through December 31, 2024. Compared to various public and non-traded multifamily-focused REITs, Ginkgo REIT has demonstrated performance that, based on historical data, has been competitive within the sector. However, past performance does not guarantee future results, and returns may vary based on market conditions.
Competitive Set Performance: Public
Public multifamily comparables include: AMH, AVB, BRT, BHM, CPT, ELME, EQR, ESS, INVH, IRT, MAA, NXRT, SUI, UDR, UMH, VRE & VTR
Strong Performance Versus Market Indices
Ginkgo REIT has maintained lower historical volatility while reporting an 11.8% annualized total return since inception, with a daily standard deviation of 7.69%. Multifamily real estate investments have historically been used as a portfolio diversifier, though various economic and market conditions influence individual asset performance.
Focus on Multifamily Investing
With rising interest rates and home prices, homeownership has become less accessible for many U.S. households. This has contributed to strong demand for multifamily rental housing, particularly in workforce housing segments. Multifamily real estate investments may provide an inflation hedge and a potential source of income stability during different market cycles.
Growing need for multifamily housing
As home ownership increasingly presents challenges for many households due to rising interest rates and property values, demand for multifamily housing has grown.
- The average monthly new mortgage payment is 52% higher than the average apartment rent, according to CBRE analysis.1
- A 30-year mortgage today on a $430,000 home with a 10% down payment would cost $3,200 in monthly repayments, 60% more than if they had bought the same house three years ago.1
- Mortgage rates moving from 7% to 8% caused 5 million more households to remain as renters. 28 million have been priced out of homeownership since 2021.2
High Interest Rates
With the Federal Funds Rate at its highest since 2000, interest rates are likely nearing their peak. The impact of these higher rates on real estate, including multifamily properties, has already been priced in. Multifamily homes remain a strong investment, offering consistent cash flow and growing demand as more people are priced out of homeownership.3
Source: Board of Governors of the Federal Reserve System (US)
Multifamily Real Estate vs. Other Asset Classes in a Recession
Multifamily real estate, and workforce housing in particular, has historically been resilient during periods of inflation and economic downturns.
- Inflation Hedge: Many multifamily leases renew annually, allowing for periodic rent adjustments that may help properties align with inflationary trends.
- Recession Performance: Workforce housing demand has remained stable in prior economic downturns, as renters may shift to more affordable housing options during times of financial uncertainty.
Focus on North Carolina
North Carolina has become a prime destination for mid-career professionals, attracting over a million new residents in the past decade. With major cities, top-tier universities, a strong economy, and easy access to beaches and mountains, the state’s three largest MSAs have each seen over 100,000 relocations in the last five years. Ranked America’s Top State for Business by CNBC in 2022 and 2023, North Carolina continues to draw workers seeking opportunity in its thriving job market.
Major Cities and Attractions
- Charlotte, home to the world’s sixth busiest airport, is a growing financial hub with Fortune 500 headquarters like Bank of America, Truist, and Duke Energy, supporting nearly 500,000 jobs.
- Raleigh, the state capital, anchors the Research Triangle, providing close to one million jobs and attracting major employers like Apple.
- North Carolina also offers diverse attractions, from premier beaches in Wilmington and the Outer Banks to ski resorts near Boone and Asheville. With top-tier universities, the state continues to draw young professionals and future renters.
Sources:
1 CBRE Research, CBRE Econometric Advisors, Freddie Mac, U.S. Census Bureau, Realtor.com, FHFA
2 *Qualify based on household income Sources: Qualified Remodeler, John Burns Research and Consulting, LLC (Data: 10/20/23)
3 Board of Governors of the Federal Reserve System (US)
Ginkgo REIT is audited by Grant Thornton LLP.
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