The fund's multifamily activity includes Texas, such as Morgan Apartments in Bedford, TX.
DALLAS—Transwestern Investment Group has raised $200 million for TSP Value and Income Fund II, a real estate investment fund that will follow its initial strategy of reducing volatility in the value-add space by focusing on current income while providing value creation. All Fund I investors have made commitments to Fund II, as did new investors, GlobeSt.com learns.
At the final closing for Fund II, 40% of Fund II equity was already committed to seed assets. Fund II is targeting a 12.5% or higher net IRR to investors, with a substantial amount of the return coming from current income.
“We are extremely pleased with our fundraising results, particularly the return of all our Fund I investors, as well as the addition of prominent new institutional investors,” said Jennifer White, Transwestern Investment Group senior managing director. “The resounding success of TSP Value and Income Fund I was a key factor in generating investor interest.”
TSP Value and Income Fund I was fully monetized in March 2019, achieving a 17% net IRR after fees, expenses and carried interest. Fund I targeted property types that deliver strong current cash flow during the value-add process.
“Our fund strategy targets property types with limited capital expenditure profiles that can deliver significant cash flow during the value-add process,” said Scott Fitzgerald, Transwestern Investment Group executive managing director. “We are well positioned to capitalize on the value-add opportunities we've identified in markets with strong economic drivers, supply constraints and liquidity to achieve superior results for our investors.”
Fund II will continue a disciplined focus on generating meaningful current income while simultaneously targeting undervalued properties that will benefit from value-add activity. Transwestern Investment Group will utilize the Transwestern operating platform to transform the assets for higher future values through local market expertise, tactical capital investment and operational enhancements.
“The current investment focus in Fund II is on industrial, multifamily and healthcare opportunities,” Fitzgerald tells GlobeSt.com. “The fund is an active acquirer of industrial distribution assets in regional markets throughout the Midwest and Southeast regions of the country. The fund's multifamily activity is centered on Sunbelt markets, including Texas, which are experiencing significant population and job growth.”
Texas' 2019 population is estimated to be 29.10 million, up substantially from 25.1 million in 2010, according to World Population Review. This is due to its current growth rate of 1.8%, which ranks third in the country.
The last US census was in 2010, so current figures are projected based on the latest estimates. At the time of the 2010 Census, the number of citizens living in the Lone Star State was 25.145 million, making it the second most populous state in the country.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
