Kevin Smith didn’t need to get up to speed on The Yorkshire Apartments in the White Oak neighborhood of Silver Spring, Maryland, when they first came to market in January 2025.
“We're very familiar with the asset,” said Smith, who is chief investment officer at The Donaldson Group and managing partner for Donaldson Impact Investments. “We wanted to buy it for a while.”
The apartment community, listed at a high price, didn’t trade in early 2025, according to Smith. However, when it was marketed again, Donaldson Impact Investments pursued it. Built in 1990, the 326-unit property boasts significantly larger homes than its competitors, with an average apartment size of roughly 1,005 square feet.
Eventually, Donaldson landed the asset for $79.4 million, partnering with New York Life Investment Management and not-for-profit developer Housing Initiative Partnership, according to a June 3 press release.
“It's very challenging to source equity right now for deals in Montgomery County because Montgomery County put rent control in place,” Smith told Multifamily Dive. “So, a lot of institutional players do not want to play in Montgomery County. But New York Life was familiar with us, familiar with the property, knew how we managed assets and was very comfortable with that.”
The buyers tapped into Montgomery County's by-right Payment in Lieu of Taxes program, which provides long-term tax abatements that support housing affordability. “This might not have been traded without the benefit of the county's assistance with the PILOT,” Smith said.
New York Life Investment Management, the majority investor, and Donaldson Impact Investments provided market-rate equity. JP Morgan handled the financing. JLL served as the selling broker and assisted Donaldson in securing debt financing.
Preserving affordability
Under new ownership, Yorkshire Apartments will transition from market-rate housing to a mixed-income affordable housing community.
Fifty percent of the apartment homes at Yorkshire Apartments will be affordable to households earning up to 60% of the area median income, while the remaining 50% will remain market-rate, according to the press release.
HIP will be the nonprofit partner and resident services provider, as the new ownership provides enhanced onsite support services aimed at improving quality of life and long-term economic mobility. Residents will have access to bilingual onsite staff, financial wellness programming, educational resources, food assistance programs and other supportive services.
“We're allocating capital to provide a full-time resident services staff member on site to work with the residents, advise them with regard to financial concerns or issues and educate them with regard to financial literacy,” Smith said.
In addition, Yorkshire Apartments will be upgraded with modern amenities and community spaces. “Most of the physical upgrades are capital improvements that the property needs right now, so we've allocated a fair amount of capital for that,” Smith said.
The acquisition is the second investment by Donaldson Impact Investments, but it is already eyeing more opportunities. Smith formed the affordable platform with Carlton Einsel, the CEO of Donaldson Capital, an owner and manager that has acquired billions of assets in the mid-Atlantic over 30 years.
“We're actively pursuing other deals in Maryland, we're pursuing deals in Virginia, and we're starting to look at deals in the Carolinas as well,” Smith said. “So we're constantly looking at other opportunities, whether they're for the impact side of the business or the market rate side of the business.”
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