Fairfield held its final close in late February for its U.S. Multifamily Value Add Fund IV LP with $1.47 billion of equity commitments, including $350 million of co-investment equity, exceeding its $1 billion target, according to a news release.
The San Diego-based owner, developer and operator will focus on acquiring value-add multifamily assets in more than 30 major metros nationwide with the vehicle, which is its largest to date. It has deployed approximately $385 million of equity to date in 16 assets.
Fairfield, ranked No. 25 on the National Multifamily Housing Council’s most recent Top 50, currently has approximately $12.3 billion in assets under management in various multifamily acquisition, development and debt strategies. The firm’s Value Add Fund III had raised approximately $1 billion of equity.
It isn’t easy to fundraise right now, which Fairfield CEO Richard Boynton acknowledged in the release.
“Having the capital committed and available to invest will allow us to pursue the attractive buying opportunities that we expect to see at an exciting point in the multifamily investment cycle,” Boynton said.
More than two-thirds of the investors are new to Fairfield’s value-add series, Trey Stafford, the head of capital markets, said in the release. Pension funds, insurance companies, registered investment advisors and high-net-worth investors contributed to the vehicle.
“As we continue to expand our multifamily investment strategies, growing our investor base within and outside the U.S. has been a key focus for us,” Stafford said. “We value the confidence that investors have shown in our platform and ability to execute our strategy.”
Fairfield isn’t alone in targeting value-add deals in a market where trades are heating up as more owners face distressed situations.
Denver-based Platte Canyon Capital, founded in January, will use $30 million in capital from funds managed by Culver City, California-based private equity firm Inceptiv to invest in middle-market multifamily value-add opportunities in five markets to start.
“I’m actually starting to have a thesis around trying to invest in the areas that capital has pulled out of,” co-founder Brennen Degner told Multifamily Dive. “So, to some degree, that’s a pre-1990s product in high construction markets with supply challenges. If you can get that stuff at the right basis, in the right markets, with the right fundamentals in your underwriting, you can do really well.”
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