Gatsby’s Year in Review: Strategies and Results for 2024
As we close out 2024, this is the perfect time to reflect on the year in real estate - a year filled with challenges, opportunities, and significant milestones for Gatsby and our investors.
We want to let you in behind the scenes by sharing our 2024 review with you!
Here is a transparent look at the difficulties we faced, the strategies we employed, and the results we achieved. We’ll also share how we’re positioning ourselves for an even more successful 2025.
2024: A Shifting Market with New Challenges
Real estate is never static or boring! The market is always shifting and creating new challenges and opportunities. Rising interest rates earlier in 2024 slowed the pace of transactions, resulting in fewer deals and longer sales timelines.
Furthermore, regulatory and procedural changes slowed down development timelines:
- Permit Delays: Increased bureaucratic inefficiencies are causing projects that once took three months to approve to take closer to six months in 2024.
- All-Electric Building Mandates: While we are in favor of sustainable building practices, new AMP and Green Building Code requirements added complexity to developments in 2024. These regulations, which push for all-electric buildings, increased costs, reduced design flexibility, and delayed completion timelines. For example, upgrading electrical systems from 400 amps to 600 amps for smaller projects (6 units or fewer) became a time-intensive process requiring lots of back-and-forth with the Department of Water and Power (DWP).
- Election Uncertainty: The presidential election temporarily stalled the market, as buyers and sellers hesitated to make decisions without clarity on the upcoming political and economic landscape.
This slower market made our once lucrative house-flipping projects less attractive. Luckily, our ability to adapt to market dynamics ensured that we stayed ahead of the curve. We focused on what we do best: multi-family developments (built-to-sell)! And we quickly pivoted from house flips to Tenancy-in-Common (TIC) projects which create attainable housing solutions for moderate-income households.
Turning Challenges into Opportunities
We answered 2024’s challenges by leveraging solid opportunities where they could be found. Thanks to our deep industry connections and established relationships with real estate agents and brokers, we were able to locate rare high-quality deals. In this landscape where the best lots generate fierce competition from multiple buyers, Gatsby often secured deals before these lots were even listed on the market!
This competitive edge comes from years of trust-building and a reputation as a reliable, results-driven developer in the Los Angeles market.
2024 Performance Results
Gatsby once again delivered strong results for our investors despite the slow 2024 market conditions! We are proud to close 2024 with an average annualized return of 15.30% bringing our company-wide average return from 2016 to 2024 to 22.04%.
Gatsby’s Competitive Advantage
Our 2024 performance is a testament to our data-driven approach and unwavering commitment to maximizing value, even in a complex market. We attribute much of our success to these enduring strengths:
- Industry connections. Our network of agents, brokers, and bankers gives us access to deals that others can’t match.
- Specialized expertise. Gatsby’s team is uniquely equipped to navigate the complexities of the LA market, ensuring lower risk and higher returns.
- A resilient market. Los Angeles real estate has its ups and downs, but its long-term strength and value remain unmatched.
Looking Ahead: Gatsby’s Focus in 2025
The year ahead promises exciting developments as we continue to evolve and expand our offerings. Here’s what we’re focused on for 2025:
- Multi-Family Developments (Build-to-Sell). We remain committed to this flagship product line, which has consistently delivered strong returns and aligns with Gatsby’s expertise. It is our privilege to develop high-quality buildings that help ease the housing shortage in Los Angeles.
- TIC Projects. While these opportunities are more limited due to specific property requirements, we will continue to pursue select TIC projects that meet our high standards.
- New Product Line: Multi-Family Build-to-Rent. This highly requested model allows investors to participate in both the equity-building phase of development and the long-term rental-holding phase. Benefits include lower tax rates, passive income, and long-term property appreciation, making this an ideal option for investors seeking to grow their portfolios over time.
- Exclusive Offering: Built-for-You Developments. For investors seeking 100% ownership, this model provides full control of a multi-family property after the property is built. Gatsby manages the entire ground-up development process, ensuring the experience is completely passive for you. This opportunity is best suited for vetted real estate investors with an established rental portfolio, offering a seamless way to expand your holdings.
Leverage Gatsby’s Strategies for Your Portfolio in 2025!
As we look ahead to 2025, we encourage you to consider diversifying your portfolio with real estate syndication. By investing with Gatsby Investment, you get to leverage the knowledge and strategies of an experienced real estate investment company with a solid track record of strong returns. Plus, Gatsby’s innovative investment models, ranging from multi-family developments to TICs and custom ownership opportunities, offer something for every investor.
Have questions? Schedule a call with a Gatsby representative today to discuss your investment goals and how we can help you achieve them.