Arizona's Neighborhood Ventures Premiers National Investment Fund

Arizona-based Neighborhood Ventures has launched a national investment fund for accredited multifamily community investors that are raising investment capital from local sources through crowdfunding. The new national fund will expand the firm’s platform and invite a new pool of investors to enter the Arizona multifamily market.

“We started in Arizona and we really focused in the Phoenix market, both from an offering standpoint and from our investors,” Jamison Manwaring, co-founder of the platform, tells GlobeSt.com. “We knew that we ultimately wanted to launch a fund because it allows us to grow. If we are just raising capital from Arizona investors, we can do well, but we can only grow so much because there is only so much capital in Arizona. If we expand to the other 49 states, we have access to a lot more investors that can invest in our projects.”

Co-founder John Kobierowski adds that the fund was essential to reach both accredited and non-accredited investors. “This helps us enhance the community investment. We have been lucky to be in Arizona where we have not only a strong market but an administration that has been very supportive of this,” he tells GlobeSt.com. “We are somewhat restricted in mixing accredited and non-accredited investors in the same investment pool, so by creating this fund, you can add more accredited investors and outside investors. This really turbo charges what we were doing from the beginning.”

There is tremendous demand for commercial real estate investment in the Arizona market. Phoenix is ranked as a top growth market nationally with both inbound population growth and job growth. “There are a lot of people that come to Arizona and have second homes here, but they can’t invest in our current fund,” says Manwaring. “There are also a lot of friends and family of our current investors that want to invest but they don’t live in the state. Investors from other parts of the country are also targeting fast-growing markets. It was a natural extension of what we are doing. Our core business is still the local investor, but now the fund allows us to grow into larger projects with a new group of investors.”

Although the firm is sticking to its original investment strategy, it will have to make some adjustments to respond to the new market conditions brought on by the pandemic. “If we had this fund running in July, we would have been the contrarians out there buying up product without competition,” says Kobierowski. “We haven’t changed our way of doing business, but there is such a strong demand for product right now that it is difficult to be a buyer in this market. It is forcing us to look at different opportunities and underwrite to a different return because we understand how quickly rents are growing. We can factor that into our investment criteria. We are also looking for neighborhoods that are going to grow faster. We are happy to adapt because of the number of people that are flooding into Arizona.”

The fund has a $10 million target, and Neighborhood Ventures doesn’t plan to oversubscribe. It has a minimum investment of $50,000.