BOSTON–Berkshire Group has closed on its second multifamily debt fund with equity commitments of $1.25 billion.
The fund will consist of Freddie Mac's multifamily debt investments and will also invest opportunistically in mezzanine debt, B-notes, and discounted notes that are secured by apartment properties.
“The Berkshire Multifamily Debt Fund is a continuation of our efforts to create products that meet our clients' needs by expanding and customizing our scope in rental residential real estate investment offerings,” said CEO Chuck Leitner in a prepared statement.
As of December 31, 2017, Berkshire Group had approximately $7.3 billion in real estate assets under management.
Berkshire Group was unable to comment to GlobeSt.com for this article.
In a video interview posted on the Pension Real Estate Association website, Leitner discussed the current state of the multifamily market, noting that while there were questions whether the asset class is going through the long end of the cycle, Berkshire views the market as balanced with the vacancy rate creeping up to a more normalized rate. There are less rental rate increases as a result, he said, but the market is still showing moderate growth in rents.
The company approaches the asset class on a market by market approach favoring such cities as Washington, DC and Dallas, Texas, Leitner also said in the video.
Other cities the company likes include Los Angeles and Miami. Last year it acquired a 177-unit, six-story mid-rise property in the Koreatown neighborhood of Los Angeles. “Los Angeles is one of Berkshire's top target markets as it meets all of our criteria for sustained growth over the longer term,” Eric Schrumpf, SVP of Multifamily Acquisitions said at the time. It also purchased Aviva Coral Gables, a 276-unit apartment community outside of Coral Gables for $100 million.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
