On a recent summer afternoon in Manhattan, Daryl Carter, founder, chairman and CEO of Irvine, California–based Avanath Capital Management and a member of the ULI Global Board, was walking along Lexington Avenue when he—like a superstar—got recognized on the street. The passerby, who previously worked at Freddie Mac, simply wanted a minute of Carter’s time.
Carter—who began his career 41 years ago, in the real estate department of Continental Illinois Bank in Chicago, and who is always a ready advocate for people of color in the industry—was in New York on business and happy to oblige.
“We started talking right then and there, but, you know, we need the pipeline of people coming in,” he says. “It should be addressed on multiple fronts. One [front] is getting more people—young folks of color—into the industry, and mentoring them, so they can rise in the industry. One of the reasons that we’re very diverse is that I keep an eye on talent.”
Many of the eight to 15 summer interns at Avanath—named after Carter’s daughter, Ava, and son, Nathan—are diverse. Carter’s goal is to provide novices with more exposure to the industry.
For example, Buwa Binitie, founder and CEO of Dumas Collective, a real estate and social impact conglomerate in Washington, D.C., has benefited from Carter’s guidance. Referring to Carter as “an awe-inspiring unicorn figure,” Binitie says Carter allowed him to intern earlier this year and taught him how to scale a business.
“He embodies the essence of a trailblazer, defying all odds and shattering barriers that were once deemed unthinkable,” Binitie says. “Daryl’s remarkable success has not only given us hope but has ignited our dreams to reach unprecedented heights and [to] aspire to be the next generation of giants in the industry.”
Dionne Nelson, president and CEO of Charlotte, North Carolina developer Laurel Street, agrees. She says looking out for others is second nature to Carter. “He has never seen his success in isolation,” says Nelson, who is an industry veteran and ULI trustee.
He is also zealous when it comes to seeing the next generation of leaders achieve the same level of success he has, according to Faron Hill, chair of the ULI Foundation and a ULI Global Board Trustee.
“In all of my conversations with Daryl, the fact that he is passionate about housing, building communities, and being impactful in the industry comes across,” Hill says. “He is always willing to share his knowledge, past experiences, and ideas on best practices so that others might benefit from leveraging his expertise as we travel our individual journeys in this industry.”
Some of Avanath’s previous interns have been hired as permanent employees. (And many of his employees have been with him for decades.) Part of Carter’s mission is to make an impact on the future. “The pipeline needs to continue, and then the other thing is, obviously, getting people opportunities to grow in the business,” Carter says.
Building an empire
Before starting Avanath, Carter founded the real estate investment firm Capri Capital Finance, around 1992, with his high school friend Quintin Primo. The company acquired $8 billion in real estate equity and debt investments under management before they sold the majority in 2005 to an affiliate of the Related Companies.
Carter founded Avanath in 2008, just three years later. Avanath has a holistic investment strategy that involves eyeing investments via an ESG perspective and focusing on operating its communities in a manner that aims to lessen any negative environmental impacts they might face. The firm also designs daily programming and community activities for residents.
The company’s first open-end affordable housing fund, Avanath Affordable Housing Renaissance Fund, was initially backed by international investors, including anchor investor, UBS Asset Management. Avanath used to raise value-added, closed-end funds but no longer does so.
Avanath currently has $3.7 billion of assets under management, with properties in 14 states that encompass more than 15,000 units.
The affordable housing guru seized such opportunities early on, including setting up a meeting in the late 1980s with his now close friend Victor MacFarlane, executive chairman of real estate investment management and development firm MacFarlane Partners. MacFarlane remembers their first meeting.
“Daryl is a memorable kind of guy,” MacFarlane says. “He’s tall, a former college basketball player [at the University of Michigan] who went to MIT.”
Since then, MacFarlane has been impressed not only with Carter’s “charisma and brilliance” but also the way he conducts business. “I think he’s a really good investor, and I think he’s able to see trends and where they’re going,” MacFarlane says.
“He picked a niche in affordable housing that, at one point, was solely the province of banks and their CRA [Community Reinvestment Act] departments, but it has become a major institutional force in terms of solidity of cashflows and ongoing capital increases over time, [yet] at the same time, providing a needed resource in this country in terms of affordable housing,” MacFarlane explains.
Carter says MacFarlane not only helped him directly but also in indirect ways, as well. It boils down to Carter maintaining a “certain temperament,” which he says young people of color can benefit from today.
“I’m six feet, seven inches. Victor’s, like, six feet, five inches, so people would come up to me and say, ‘Oh, are you Victor McFarlane?’” Carter says of early commercial real estate conferences he attended. “I said, ‘No, Victor is older and richer, and I’m taller.’ I would not be offended by [the error]. I [would say], ‘You know, if you have a meeting with me, you can get to know me, and you won’t make that mistake anymore.’”
Carter’s confidence and work ethic stem from his earliest mentors—his parents. His father, an employee at an auto factory in Detroit, never took a sick day over the course of about 20 years.
His parents’ providing a house and housing stability for his family helped fuel Carter’s dedication to affordable housing. Making affordable housing pencil out can be difficult, so creativity is required, he says, but it’s worth the effort, given the proven correlation between housing security and success. “It’s important to me—particularly in communities of color—to create very safe, well-managed, well-maintained housing,” he says.
A kindness approach
When it comes to managing his properties, Carter abides by a principle that stems from his upbringing: the notion that kindness goes a long way. This principle includes making a point of treating all residents the same way, regardless of income, and offering them more than simply a stable place to live.
As a result of its efforts, Avanath recently received the Certified Organization for Resident Engagement and Services, or CORES, certification. In some instances, Avanath will even renovate the apartments of long-term residents without raising their rents. “When that happens, everyone in that community thinks you’re amazing,” Carter says.
These business practices not only create goodwill but also reward renters who have stayed the course, in some cases, for decades. Part of Avanath’s strategy is to uplift all of the residents in its portfolio and help them attain the lifestyles they desire. When it comes to Section 8 residents, Carter says that although many people are critical of them, the program’s issue is not with the residents but with “some bad owners and managers.”
Carter says he has found success in the communities where he has properties due to the unique perspective Avanath provides. “Part of serving them well is having team members who understand those neighborhoods, who grew up in those neighborhoods. I’d say our residents value the fact that we are a very diverse company. I think it translates into certain metrics. For instance, our turnover is very low.”
Indeed, Avanath’s renter turnover was 14 percent last year, compared with industry average turnover of 40 percent to 60 percent. Because properties with high turnover often indicate problems—including high crime rates—what makes the difference is neighbors knowing each other. “As low a turnover as you can maintain, it will become safer,” he says.
Avanath’s properties also have a high standard of cleanliness and maintenance. Carter says that it is important to him to create “very safe, well-managed, well-maintained housing” for the benefit of the communities.
Board work
Ken McIntyre, CEO of the Real Estate Executive Council (REEC), says Carter has an astounding commitment to his work. “He’s willing to listen,” McIntyre says. “He’s willing to learn. He’s willing to take chances, but he’s committed to moving forward and achieving a better outcome—and by ‘better outcome,’ I mean successful returns for his investors, as well as the improvement of the communities that he’s operating in.”
Carter is a founder, alongside MacFarlane, of REEC, a not-for-profit that aims to increase opportunities for Black and LatinX professionals in commercial real estate. This goal is also something he stresses as a member of the Urban Land Institute Global Board of Directors, where he says it is vital that members make a concerted effort to focus on diversity.
“It’s a key initiative of ULI, but one of the things I do is, I challenge even my global board members to look at their companies,” he says. “Many of our other global board members, their companies aren’t very diverse, and I challenge them and say, ‘Hey, we can do better.’”
Even joining the ULI global board was a hard sell for Carter. When initially approached, he turned down a couple of people, including Doug Abbey, chairman emeritus of Swift Real Estate. Abbey describes Carter as a “pioneer” in the industry. “He’s very knowledgeable about real estate, and he’s knowledgeable about cities, and he’s knowledgeable about housing,” Abbey says. “He was able to put all of those skills together to basically create a new business in bringing institutional capital to the affordable housing business.”
Carter credits Abbey as a “great mentor and friend.” Even so, Carter says. “If you really want to know the true story, I served on the ULI global board 30 years ago, and it was not the most pleasant experience,” Carter recalls.
One example was when he and some other younger members expressed concerns about a global board meeting occurring on Halloween. After the younger members voiced their desire to be at home with their children, other members suggested that the younger members be content with their wives’ taking their kids trick-or-treating instead.
Carter’s skepticism about joining the global board this time ended after he was contacted by a ULI “secret weapon,” new global chair Diane Hoskins, with whom Carter has shared a friendship since their days as students at MIT. “I couldn’t say ‘no’ to Diane,” Carter recalls. “I knew she was a possibility for being chair . . .. So, yes, Diane is the one who recruited me on the board, and particularly now that she’s chair, I’m happy to be on her board.”
Hoskins says that when it was time to look for potential board members, she had no questions about how valuable Carter’s presence there would be. His expertise and insight regarding housing are also invaluable as ULI shapes its initiatives.
“We need him,” Hoskins says. “We need people like Daryl. We need people with his deep knowledge and experience, and his optimism, and, frankly, Daryl is outspoken . . . he tells it like it is. It’s important to have people like that in the room, because that’s how progress is made.”
Also a former chair of the National Multifamily Housing Council, and its first African American one, Carter was a Multifamily Executive Hall of Fame inductee last year. He notes that there are some NMHC initiatives he is convinced that ULI could benefit from adopting. One is the fact that diverse companies receive free memberships.
ULI Senior Vice President of Diversity, Equity, & Inclusion Sonia Huntley says, “Daryl has been, and continues to be, a key member on whom we rely to provide strategic guidance for ULI’s DEI efforts. I respect him as a giant in the industry—when he talks, I listen because he always walks his talk.”
Contrarian buyer
Whereas many pulled back during the pandemic, Carter made the decision to buy. “We felt that, before the pandemic, there was a crisis in housing affordability,” Carter explains. “We felt that it would only get worse, and that there would be greater demand, meaning that the demand for affordable housing would only increase during the pandemic.”
In 2020–2021, Avanath’s average rent rates increased, the company’s occupancy went up, and “every metric from a performance standpoint went up during Covid.” As a result, Avanath purchased properties worth more than $1 billion during that time. “I think those are some of our best buys that we’ve made as a company.”
Seventy percent of his company’s properties are in communities of color. Avanath also has investors not just in the U.S. but also in Europe, as well. But he’s most grateful for the support of those he knows in the industry.
“I am incredibly blessed by the number of great colleagues I have that have embraced our mission,” Carter says. “There’s nothing better than that.”
KAREN JORDAN is a freelance journalist, filmmaker, and author based in Los Angeles.
