Waterton Raises $1.74B and Seeks Major Multifamily Play

The company is planning to invest $5 billion.

Waterton has raised $1.73 billion from its latest funding round and plans to take advantage of a slow multifamily market.

It comes from the property management firm’s final closing of Waterton Residential Property Venture XV, L.P. Waterton in a statement referred to the money raked in as “one of the largest dedicated multifamily value-add funds in the United States.”

Also, the Chicago-based firm said it plans on investing roughly $5 billion in 30-40 assets across major U.S. markets in both suburban and urban areas, focusing on key fundamentals including favorable employment figures, and transportation logistics. Plus, the new funding will target traditional value-added properties and distressed opportunities.

“We expect to see significant opportunities in the multifamily sector as a result of the current, interest-rate driven disruption and the near-term oversupply in certain markets with healthy longer-term fundamentals,” David Schwartz, chairman and CEO of Waterton, said.

“This fund represents a strong conviction in a sector and a strategy we’ve been executing for almost 30 years, and a unique cycle-specific opportunity to generate additional alpha in the current market environment.”

In 2024, the multifamily sector has been met with challenges of high supply. That’s led to issues with rent growth and absorption. However, things might be starting to turn around. Since the third quarter of last year, nearly 70 percent of all apartment supply in the Sunbelt and Salt Lake City has witnessed negative rent growth – but prices are expected to rise in those regions by mid-2025, according to a CBRE report.

The initial close of Venture XV occurred in December 2022 before starting to pursue investments a year later. Some moves supported by the fund include the construction of a 346-unit property in Chicago Loop, and purchasing a garden-style community in Lake Washington, WA. Plus, $100 million has gone toward credit-focused investments.

In 2020, Waterton’s predecessor fund raised $1.5 billion.