Sustainability Initiatives at 28-Property Portfolio Generate Gross IRR of 37%

Scaling workforce housing across the Sun Belt

In December 2017, RMR Residential and its joint‑venture partner, acquired the Bedrock Portfolio, a 28‑property workforce housing portfolio spanning four states and six high‑growth Sun Belt metropolitan markets. The transaction marked the largest single acquisition in RMR Residential’s history.

Strategic rationale

RMR Residential recognized that quality workforce housing - properties serving middle‑income renters - represented an underserved yet resilient segment of the multifamily market. The Bedrock Portfolio provided a rare opportunity to achieve instant scale, deepen exposure in markets where RMR already operated and position the company for sustained growth in a demographic segment projected to expand for years.

The acquisition also offered meaningful geographic diversification across fast‑growing MSAs in the Sun Belt, where population and job growth continued to outpace national averages. By concentrating on assets with strong existing occupancy and reliable cash flow, RMR Residential could execute a targeted value‑add strategy while minimizing operational disruption.

Operating strategy & value creation

Upon acquisition, RMR Residential pursued a light value‑add program designed to enhance resident experience, extend asset life and unlock incremental revenue. Improvements included:

• Installation of plank flooring in ground‑floor units.
• Addition of washers and dryers in all units with existing connections.
• Completion of deferred maintenance to preserve building systems.

These upgrades were intentionally modest but impactful, elevating the quality of the communities while maintaining attainable rental levels consistent with workforce housing. Complementing the value‑add program, RMR Residential launched a comprehensive portfolio‑wide focus on sustainability and operational efficiency. Over the 4.5‑year hold period, the team implemented initiatives that delivered both environmental and economic returns:

• LED lighting conversion, reducing energy consumption by up to 75%.
• Water‑saving technologies, including aerators, low‑flow toilets and eco‑friendly irrigation systems collectively saving over 50 million gallons of water annually.
• Recycling and trash‑diversion programs that reduced landfill waste and encouraged greener resident practices.

The resulting utility savings benefited both ownership and residents, demonstrating how ESG‑aligned operations can enhance asset performance while improving affordability and community satisfaction. These successes also served as a catalyst for additional ESG initiatives across the broader RMR Residential portfolio.

Financial outcomes

As of March 2023, 27 of the 28 properties in the Bedrock Portfolio had been successfully sold, delivering exceptional returns:

• Gross IRR: 37%
• Gross MOIC: 3.1x

The final property exited later in 2023, completing a highly successful investment cycle and validating RMR Residential’s thesis that well‑located workforce housing, paired with disciplined operations and sustainability‑driven efficiencies, can generate strong and durable performance.

The Bedrock Portfolio exemplifies RMR Residential’s ability to execute large‑scale, multi‑market investments in a sector where demand consistently exceeds supply. Through targeted value‑add improvements, thoughtful sustainability initiatives and operational discipline, the team delivered meaningful financial results while enhancing the quality and longevity of each community. The portfolio continues to stand as a model for how to responsibly and profitably invest in workforce housing at scale.