Peakhill Capital is forming a joint venture with Declaration Partners to collaborate on various multifamily investments, providing up to $25 million per deal.
While they did not specify any projects at this time, the duo plans on entering student housing, build-for-rent, and other multifamily segments. The JV estimates spending between $5 million and $25 million on preferred equity investments.
Peakhill Capital in a statement said that they plan on providing “gap capital” through CMBS and LifeCo. to residential and property owners with active loans. According to the private real estate group, it has set a $300 million mark for production goals with Declaration Partners. The latter of the two firms manages roughly $2.2 billion in assets.
“Many owners of multifamily properties are finding their lenders are requiring loan paydowns. Declaration and Peakhill can provide friendly ‘gap capital’ to assist those owners in successfully recapitalizing their properties,” Todd S. Rich, co-founder of Declaration Partners and head of its real estate team said.
“We believe that Peakhill’s sourcing and servicing abilities coupled with Declaration’s capital and expertise will provide a competitive advantage.”
The JV comes as the multifamily market has been generally in a slump. Newmark’s first quarter report revealed that rent growth was negative as record supply in the market continues.
Vacancies, which hit 5.9 percent, grew for the ninth consecutive quarter. The surge in deliveries is expected to continue through September, with them likely slowing in the fourth quarter.
Peakhill and Delcaration did not specify areas it will target but noted they will be making “preferred equity investments across the US.”