New York-based GFI Capital Resources Group and Washington, D.C.-based private equity powerhouse The Carlyle Group today announced a joint venture that will provide GFI with $300 million in equity, leveraged to $1.2 billion, to invest in real estate assets nationwide. The partnership will allow GFI to more than double the size of its existing 20,000-unit portfolio. No investment timeline has yet been determined.
"GFI was looking for one JV partner who valued our expertise and experience in the multifamily sector," said Michael Weiser, GFI's executive vice president of acquisitions and dispositions, about the relationship with Carlyle. "Having one partner as opposed to seeking out capital on a deal-by-deal basis allows GFI to focus on what we do best, which is buy and operate deals."
GFI, which currently owns property in New York, Texas, Georgia, Florida, and Michigan, recently expanded its staff to help ferret out suitable properties. "[We are] ready for significant expansion over the next few years," Weiser said. 'We have already purchased a few properties as part of this venture [and] are seeking distressed, non-performing real estate and debt assets to acquire immediately."
The fund will focus on acquiring Class B and C properties, particularly rehab and value-add assets, Weiser said, but "we will look at Class As if the price is right." The company plans to actively focus on the Carolinas, Las Vegas, Baltimore, Md., the Washington, D.C., corridor, and the Midwest. Still, the venture will "go where the opportunities are," Weiser added.
Recent GFI acquisitions in the Atlanta area include the 994-unit, three-property East/West portfolio for $26.6 million; the 224-unit Willow Trail apartments for $11.6 million; and the 722-unit Village at Stone Mountain. The firm has also purchased three non-performing loans on condo projects in Brooklyn, N.Y., that are in various stages of development.
The Carlyle Group is one of the largest private equity firms in the world. Its U.S. real estate investment arm has five active funds with a total of $5.2 billion under management. The firm declined a request for additional comment.