Carroll’s Hefty Fundraising Keeps It All-In on Multifamily

Funding flowing to Carroll, a national real estate investment firm specializing in multifamily housing, continues at a strong pace as the company announced this week the final closing for its seventh investment vehicle, Carroll Multifamily Venture VII, L.P.

This seventh investment vehicle closed in excess of more than $340 million, more than double the size of CARROLL’s prior vehicle.

The company said in a release that it will target multifamily assets “in line with the firm’s value-add and core-plus investment strategy across the Sun Belt region” with $5.5 billion in total buying power. 

To date, Fund VII has acquired 14 properties in five states – Georgia, Florida, North Carolina, Texas, and Arizona – valued at $1.3 billion.

Institutional Investors ‘Defensive,’ But Like Apts

Emily Zhu, Head of Marketing Strategy at New Empire Corp., tells GlobeSt.com, “Institutional investors are pursuing defensive investment strategies as the uncertainty in the global markets grows. 

“Investors continue to deploy capital and reallocate their investment portfolios to value-add, core plus, no leverage, multifamily assets that are located in hot markets and managed by reputable investment firms.

The high frequency of the fundraising demonstrates strong demand for opportunities that meet the investor’s expectations including optimal locations, quality property operators, successful fund managers, and prospects for positive returns. This elevated frequency also shows that investors are confident in real estate investments as a whole.” 

Funding Environment ‘Choppy’

That said, the funding environment has gotten choppier, Thomas Foley, CEO of Archer.re, tells GlobeSt.com. “Many buyers have shifted into pencils down mode and sellers decided to pause – both to understand the likelihood of an improvement in the interest rate environment. Because of the slowdown in deal velocity, there has been a slowdown in fundraising – this spring/summer has certainly reflected that.”

For example, Paul Letourneau, Senior Manager, Commercial Loan Originations at Alliant Credit Union, tells GlobeSt.com that he is seeing volumes slow down across all asset classes, including multifamily loan opportunities during the second half of this year.

“While sellers have had the upper hand as we have navigated through the last several years, there are gaps forming now between seller expectations and where buyers are,” Letourneau said.

But multifamily has been quite resilient, and for stronger firms with demonstrated track records and exposure in the most desirable markets in the US, they’ve been able to raise relatively quickly. 

“When they’re managed exceptionally well and the market timing is right, apartment assets can withstand the ebb and flow of market fluctuation,” Neil Schimmel, CEO of Investors Management Group, tells GlobeSt.com. “Multifamily investors have to be extremely patient and future focused.”