Waterton Closes $1.7B Fund To Pounce On 'Historic Pricing Disruption' In Multifamily

Real estate investment firm Waterton has closed a $1.7B fund to pursue value-add multifamily properties in Chicago and other major cities during what it calls a “period of historic pricing disruption.”

The Chicago-based company announced the closure of the Waterton Residential Property Venture XV fund on Monday. The fund secured equity commitments from a wide-ranging group of institutional investors and will target distressed multifamily opportunities and traditional value-add properties.

“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,” Waterton Chairman and CEO David Schwartz said in a release. “This fund represents a strong conviction in a sector and a strategy we’ve been executing for almost 30 years.”

Schwartz said this market cycle with high interest rates offers a unique opportunity to generate additional returns. The company plans to invest roughly $5B in gross assets, including debt, in 30 to 40 multifamily assets across major U.S. markets. 

Waterton has already used the fund to help acquire properties in Chicago, New York and Washington state. The fund is planning to close on several investments in September and throughout the fourth quarter.

Venture XV closed its first stream of equity commitments in late 2022, Commercial Observer reported, acquiring a 46-unit high-rise in Chicago's Loop and multifamily developments in White Plains, New York, and in the Seattle suburbs.

“We are so pleased with the impressive group of global institutional investors we have in the fund — both long term and new partners — and look forward to continuing to invest in what is expected to be a compelling cycle,” Michelle Wells, Waterton managing partner, investor relations, said in the release.