Workforce housing is a plain idea: apartments that working households can afford to rent without any subsidy. In our markets that means older, B- and C-class buildings renting to warehouse and logistics staff, healthcare workers, teachers, tradespeople, and the people who keep the region running. It is not glamorous, and that is part of why we like it.
Almost everything built new in Southern California is high-end. Land, labor, materials, and financing cost too much to deliver a brand-new building at workforce rents and still make the math work for a developer. So new construction concentrates at the top of the market, and net new supply at the rents most people can actually pay stays close to flat.
The practical effect is that the existing stock is essential and very hard to replace. Nobody is building more of it, and what exists is decades old. That scarcity does not depend on a forecast. It is a structural feature of how building costs work today.
On the other side, the renter base grows. The Inland Empire has spent two decades absorbing the region's population and logistics growth, and the employment that drives it, warehousing, distribution, healthcare, and education, overwhelmingly rents in our segment. When supply is fixed and demand rises, well-run buildings stay full.
We would rather own essential housing and run it well than chase a trophy asset that depends on the market doing us a favor.
This segment rewards exactly what we are built to do. Returns here come from buying at a sensible basis and operating the property well, not from speculation. The work is hands-on: renovation scopes, contractor management, leasing, expense control. That is the family's background, and it is where attention to detail actually shows up in the numbers.
None of this means the segment is easy. Local regulation matters, particularly in parts of Los Angeles, and we underwrite the rules as carefully as the rents. But the core imbalance, deep demand against fixed supply, is the most durable thing we can build a firm on.