(Save the date: RealShare Apartments comes to the Westin Bonaventure, Los Angeles, October 24.)
SAN FRANCISCO-In order to continue pursuing its proven strategy of investing in the multifamily sector through value-add acquisitions, certain ground-up developments, debt investments and joint ventures with appropriate risk/return profiles, Carmel Partners has closed its fourth discretionary institutional real estate investment fund. Carmel Partners Investment Fund IV, targeted to raise $700 million, reached its “hard cap,” with total commitments of $820 million.
Carmel will continue its strategy in supply-constrained markets with high barriers to entry throughout the country. Consistent with prior funds, Carmel also invests in new development and high-yielding multifamily debt opportunities with compelling risk-adjusted returns. Since beginning investment activity in March 2012, Fund IV has committed approximately $250 million of equity, or 30%.
A firm spokesperson tells GlobeSt.com that Carmel has recently invested in cash flow-challenged assets that are not easily financeable, that require certainty of close and that may require structuring creativity and solutions, including a large multifamily acquisition/rehab transaction in Hawaii, a large ground-up development in California and two debt deals.
“We continue to find compelling risk-adjusted opportunities, and we are uniquely well positioned to take advantage of them,” said Ron Zeff, the firm’s founder and CEO, in a prepared statement. “With 26 return investors and 17 new investors, we have a top-tier investor base that has shown us a lot of support.”
The spokesperson also tells GlobeSt.com that Carmel’s Fund III was $700 million, so the slightly larger $820-million fund size “is commensurate to the firm’s recent investment pace and strong deal pipeline.”
Fund III concluded its investment activity in April with 36 transactions. That fund is composed of multifamily acquisition/rehab, new development and debt investments and recently reported a net IRR of 16.7% as of June 30.
As GlobeSt.com previously reported, in May Grosvenor Properties and Carmel Partners sold Grosvenor Suites, a multifamily high-rise atop Nob Hill here, to Bridge Capital Partners, a unit of Friedkin Realty Group, for more than $80 million. At the time, the new owner was planning reposition the 205-unit, 19-story property as luxury apartments.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
