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Attracting Value

Chicago-based Capri Investment Group invests in Detroit’s resurgence

By Dawson Bell

Page 30

Capri Investment Group Chairman Quintin Primo III is asked whether major investment in urban real estate – like the one his company is putting together in Detroit – is caused by renewed economic vitality making investment more attractive or if that kind of investment is spurring renewed economic activity. “Both,” he said.

Clearly, Primo and Capri Investment Group, in the midst of a $200 million capitalization for its Detroit Urban Investment Fund, regard residential development in Detroit as a win-win.

Capri, a Chicago-based real estate investment firm with a more than $3 billion portfolio, has specialized since its founding in 1992 in seeking out opportunities in overlooked or underserved markets. And Detroit, despite a recent resurgence in downtown and midtown real estate, fits that profile, Primo said.

Compared to New York, Chicago and Los Angeles, Detroit is still regarded as a relatively small market by most institutional investors, he said, many of whom also retain outdated notions about the city’s decline. Capri believes there is strong evidence that Detroit’s turnaround is real, Primo said, and that the market for high-quality multifamily residential property is “an extraordinary opportunity.”

Primo said he witnessed that turnaround up close last year when he attended last fall’s Detroit Homecoming for Detroit expats, a collection he called an astounding group of “powerful, important and interesting people” committed to a resurgent Detroit. The event also confirmed his view that Detroit’s business and governmental leaders are engaged in an extraordinary level of cooperation and shared vision.

Primo likened the civic atmosphere in Detroit to the historic commitment Chicago’s business and community leaders exhibited at the turn of the last century, adopting a plan for the city’s landscape and culture, which shaped its development and “created the extraordinary city you see today,” he said.

“I see that … in Detroit,” Primo added. “It’s a strong harbinger for what we can expect in coming years.”

Gwen Butler is leading Capri Investment Group’s Detroit project and has been meeting with potential investors over the last year. Part of her marketing strategy has been to conduct mobile tours of a seven- to nine-square-mile area around downtown with those investors to familiarize them with development that is underway and the availability of real estate. They’ve poured over research showing multifamily occupancy rates in Detroit’s urban center in recent years hovers above 97 percent.

They’ve also met with economic development officials, major players in Detroit development like Rock Financial and Ilitch Holdings, and toured the preview center for the new Red Wings arena.

Butler said each of the participants “has walked away with a greater appreciation of the investment opportunity in Detroit … and the positive momentum underway in the city.”

That was true, she said, even for those based relatively close to Detroit, but who had not seen firsthand what was happening in neighborhoods around the city’s core.

Capri Investment Group invests on behalf of corporate pension fund plans, public retirement systems, foundations and endowments, Taft Hartley funds and other institutional investors.

Primo said the company’s objectives go beyond creating an attractive investment vehicle.

“For Capri, making money is not enough. We believe that we exist as a business to serve society (even as) we make our investors very attractive returns,” he said. “It’s more than simply dollars and cents. It’s about the formation of a great middle class in a predominantly African-American city.”

Like a 400-unit twin tower apartment building Capri acquired in Koreatown near downtown Los Angeles, Primo said his company’s goal is also about creating high-quality housing in transitioning urban centers.

“We embrace the transition. It makes us feel great about America…about the extraordinary potential of our urban centers,” Primo said. “We believe in American cities … in serving underserved populations. If we can help get Detroit into the mainstream of our economy, if we can get South Central L.A. into the mainstream, America’s national competitiveness improves. … A better economy, better schools, better housing, better health care improves our global competitiveness. It’s in all our interests.”

A Detroit Duo

After graduating from the University of Michigan in 1977, Detroit native Gwen Butler left home to launch a professional career in Chicago, working as a money manager in the banking sector and, since 2007, as a top executive at the real estate investment firm Capri Investment Group.

But asked about her relationship with the city of her birth and she responds without hesitation. “Oh, I’m definitely a Detroiter,” Butler said.

She rattles off the names of every school she attended on Detroit’s northwest side, including Mumford High School’s class of 1973, where she was president of her senior class and captain of the cheer team. “I’m a proud product of the Detroit Public Schools. My father still lives here,” she said.

It’s easy to understand why Butler, and Capri Capital Chairman Quintin Primo III, who spent a significant part of his formative years in Detroit and as a student at Cass Tech, regard their firm’s Detroit real estate initiative – a $200 million fund to develop multifamily residential and commercial real estate in and around Detroit’s core – as deeply personal.

“I don’t think you can even visit the city of Detroit and not feel a connection to it,” Primo said. “The people of Detroit are some of the warmest, most accepting people I’ve met.

Primo said his time in Detroit – from 1969 to 1972 when his father served as an Episcopal minister at St. Matthew’s and St. Joseph’s Church on Woodward Avenue –”left an indelible mark.”

“I saw for the first time what people of color are able to achieve … in music, in industry, in art,” Primo said. “Yeah, as a person of color, I want Detroit to win.”

Butler said she feels like the opportunity to participate with Capri in Detroit’s resurgence is almost cosmically ordained.

“For me, personally, it just seems like that, at this moment in time, my entire professional career has been spent developing skills that will help me and Capri participate in (Detroit’s) revitalization,” she said. “It’s like a perfect confluence of events and skills because of our ties to Detroit, our clients and our previous work here, Quintin’s background. … Most importantly, Capri’s focus as urban multifamily specialists. It’s a natural fit.”