Mitsubishi Affiliate Launches First US Development Fund

Diamond Realty will use a total equity of $51 million to finance two multifamily projects in Texas and Colorado, as well as a logistics building in California.

Diamond Realty Management Inc., a wholly owned subsidiary of Mitsubishi Corp. has launched a development fund in the United States, the DREAM US Fund, DRM announced late last week. The launch represents the first outbound overseas fund-raising offered to Japanese domestic investors by DRM, which will act as an asset manager for the fund.

Alexan Fairmount
Alexan Fairmount

The fund reportedly will co-invest (for less than 49 percent interests) in multifamily and logistics development projects in the United States that have been undertaken by DRM’s sister company, Diamond Realty Investments Inc., a U.S.-based real estate investment company. DRI is a wholly owned subsidiary of MC Americas.

With total equity commitment of $51 million from Japanese institutions, the fund will invest in three projects: multifamily development projects in Texas and Colorado and a logistics development project in California.

The fund has an expected life of four years and plans to exit through third-party sales of the properties after their completion and stabilization. The total cost of the projects is approximately $250 million.

DRM plans other multiple overseas initiatives, including a series of the fund.

Neither DRM nor DRI replied to Commercial Property Executive’s requests for additional information.

From one of the photos released by DRM, however, CPE was able to identify one of the multifamily projects as the Alexan Fairmount, a 368-unit project by Trammel Crow Residential that was included in our round-up of the 15 largest multifamily developments in metro Dallas in 2015. That property was sold to a Canadian investor in late 2016 for $71 million, according to dallasnews.com.

Image courtesy of Diamond Realty Investments