Carter Multifamily Growth & Income Fund II, a division of Carter Funds focused on acquiring and managing value-add multifamily real estate, announced in a letter to investors that the fund is suspending distributions to investors and that its advisor has agreed to defer 100% of its asset management fee beginning in October 2023. The company also reports that the advisor will subordinate the repayment of the deferred fees to the investor’s return of capital.
Launched in 2020 and with approximately $193 million in equity raised, Carter Multifamily Growth & Income Fund II acquired a diversified portfolio of eleven multifamily assets aggregating $582 million of acquisition price financed with $412 million of mortgage and other debt.
The company cites the significant increase in interest rates since March 2022, with the U.S. Federal Reserve having raised the federal funds target rate from 0.25% to 5.50%. In turn, secured overnight financing rates have been driven from 0.08% to more than 5.31%. The company also explains that other costs, including insurance, have also increased significantly.
Carter Funds is a vertically integrated, full-service real estate acquisition and fund management company based in Tampa, Florida. Carter has $3 billion in assets under management and is built on over 300 years of real estate experience.