National real estate investor and operator Waterton has closed on its $1.5 billion multifamily value-add investment fund. The fund, Waterton Residential Property Venture XIV, has equity commitments from a diverse group of global institutional investors and is one of the largest dedicated multifamily value-add funds in the U.S.
“We expect to see significant opportunities in the multifamily sector across the country due to the disruptive nature of the COVID recession,” said Waterton chairman and CEO David Schwartz. “This fund represents a unique opportunity to invest in a strategy we’ve been executing for 25 years that evolves to capitalize on cycle-specific opportunities, which should be plentiful in the current market environment.”
Waterton held the first close for the fund in May 2020 and the final close this month, which was completed virtually due to the COVID-19 pandemic. The capital raise was led by the firm’s in-house investor relations team without the use of a placement agent. Kirkland & Ellis served as legal counsel.
“The Venture XIV fundraising process speaks to our long-term performance and the strong investor relationships we’ve built over the years,” said Michelle Wells, head of investor relations. “We have a great group of global institutional investors in the fund—both long-term and new partners—and especially appreciate the trust they placed in us during such an unusual time.”
Venture XIV is similar to Waterton’s $920 million predecessor fund formed in 2018 and will pursue urban and suburban opportunities in major markets that have favorable job growth, employment metrics, and transportation options, with an emphasis on well-located and well-maintained workforce housing. According to the firm, it also will target cycle-specific distressed opportunities as well as traditional assets that would benefit from its vertically integrated design, construction, and operations. Waterton plans to invest more than $4 billion, including debt, in more than 50 multifamily communities.
The first deployment from the fund occurred in November for the acquisition of a four-property multifamily portfolio with 1,824 units in the Atlanta metro area. This acquisition more than tripled Waterton’s presence in the metro Atlanta market.
Subsequent acquisitions include the 106-unit Palms of Kilani in Wahiawa and the 50-unit Waikele Towers in Waipahu on the island of Oahu, the firm’s first foray into Hawaii, as well as three multifamily communities in California—eaves Diamond Heights in San Francisco, The Vue in San Pedro, and OLiVE DTLA in Los Angeles.
