National real estate investor and operator Waterton announced the final close for its value-add multifamily real estate fund with $1.73 billion of equity commitments from a diverse group of global institutional investors. According to the Chicago-based firm, the Waterton Residential Property Venture XV is one of the largest dedicated multifamily value-add funds in the nation and is 15% larger than its predecessor fund.
“We expect to see significant opportunities in the multifamily sector as a result of the current, interest-rate driven disruption and the near-term oversupply in certain markets with healthy longer-term fundamentals,” said chairman and CEO David Schwartz. “This fund represents a strong conviction in the sector and a strategy we’ve been executing for almost 30 years, and a unique cycle-specific opportunity to generate additional alpha in the current market environment.”
The first close for Venture XV was in December 2022, with Waterton selectively pursuing investments through 2023. The fund’s first deployment was not until October 2023, with the acquisition of a 346-unit high-rise built in 2020 in a core Chicago Loop location. Additional acquisitions have included a transit-oriented community in White Plains, New York; a garden-style community on the waterfront in Lake Washington, Washington; and over $100 million in credit-focused investments, including mezzanine and securitized debt.
Recent investment activity has significantly increased, according to the firm, with several investments expected to close this month and through the fourth quarter.
The fund will target distressed opportunities as well as value-add properties that would benefit from the firm’s vertically integrated design, construction, and operations strategy. Waterton plans to invest approximately $5 billion in gross assets, including debt, in 30 to 40 multifamily assets in urban and suburban locales in major U.S. markets.
The capital raise was led by Waterton’s in-house investor relations team, with Kirkland & Ellis as legal counsel.
“Our fundraising success in the midst of a challenging fundraising environment speaks to our long-term performance as a multifamily specialist and the strong investor relationships we’ve built over the years,” said Michelle Wells, managing partner, investor relations. “We are so pleased with the impressive group of global institutional investors we have in the fund—both long-term and new partners—and look forward to continuing to invest in what is expected to be a compelling cycle.”
