Closing of Fourth Fund Arms Carmel Partners with $820M for M-F Shopping
By Barbra Murray, Contributing Editor
High interest from the investment community has resulted in Carmel Partners’ closing of its fourth discretionary institutional real estate fund with $820 million in commitments. As was the case with the firm’s preceding investment vehicles, Carmel Partners Investment Fund IV will target the booming multi-family sector.
Fund IV will not only focus on the acquisition of rental properties, it will also engage in the purchasing of high-yielding apartment debt and investment in new development endeavors. Activity through the Fund commenced in March of this year; approximately $250 million has been spoken for as of the close of the second quarter.
A range of investor types took an interest in Fund IV, with a total of 43 top endowments, foundations, family offices, and select pension funds either returning from previous Carmel funds or taking part for the first time. The current state of the apartment market undoubtedly helped Carmel exceed its target raise by $120 million and handily reach its $820 million hard cap. According to a report by Marcus & Millichap Real Estate Investment Services, not even a decrease in the pace of employment impacted the thriving multi-family sector.
“Robust demographic trends, including higher levels of immigration, the surge in echo boomers forming their own households, a further shift away from homeownership, and the growing diversity in household composition support continued demand for rental housing,” per the Marcus & Millichap report. The positive demographics bode well for long-term success.
“Carmel is pleased to be oversubscribed in a challenging capital raising environment,” Quinn Barton, managing partner with Carmel, said in a prepared statement. “Investment officers have a broad set of choices among asset classes and real estate managers, and we are excited our strategy and results in the multi-family sector continue to resonate.”
Carmel’s history of success with its funds also surely played a part in luring commitments. Fund III closed in September 2007 with $700 million for multi-family purchases, which ultimately totaled 36 properties. With the closing of Fund IV, Carmel has raised an aggregate sum of roughly $2.5 billion, accounting for 121 properties containing 26,275 residential units.