Capital Square, an investment sponsor specializing in tax-advantaged real estate investments, has launched Capital Square Multifamily Development Fund I LP. The fund anticipates raising up to $300 million in equity from institutional investors, with plans to invest more than $850 million to develop a portfolio of ground-up, multifamily real estate communities in the Mid-Atlantic and Southeast regions of the United States.
“There is a shortage of quality housing that traces its origin to the Great Real Estate Recession,” said Louis Rogers, founder and chief executive officer of Capital Square. “The shortage was exacerbated by the COVID-19 pandemic that delayed or halted many new developments. To accelerate the development of new Class A institutional-quality multifamily communities, the fund will focus on shovel-ready, ground-up sites.”
The portfolio is expected to be comprised primarily of multifamily developments sponsored by one of Capital Square’s vetted joint venture development partners. The fund will invest in the limited partner equity portion of the capital stack, focusing on emerging secondary growth markets that lack institutional capital investment including Richmond, Virginia; Charleston, South Carolina; and Knoxville, Tennessee.
Under its current growth strategy, Capital Square plans to launch additional multifamily development fund offerings approximately every two years.
“The housing crisis in this country has created strengthening fundamentals in our target markets, and multifamily investment continues to provide strong opportunities for compelling risk-adjusted returns for investors and will do so for the foreseeable future,” said Whitson Huffman, chief strategy and investment officer.
Capital Square is a national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges, qualified opportunity zone funds for tax deferral and exclusion, an apartment real estate investment trust, and development funds. Since 2012, the firm has completed more than $5.6 billion in transaction volume. Its related entities provide a range of services, including due diligence, acquisition, loan sourcing, property/asset management, and disposition, for high-net-worth investors, private equity firms, family offices and institutional investors.
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