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Groma Launches Second Boston Area, Multifamily Closed-End Fund

GromaCorp Inc., a real estate and financial technology startup, launched a closed-end fund focused on small-unit-count multifamily properties in the Boston area. Groma Boston Fund II LLC is intended to continue Groma’s exploration of emerging trends in multifamily investment.

Groma Boston Fund II seeks to raise $25 million in equity from accredited investors with a $100,000 minimum investment. It expects a three- to five-year hold period, with distributions beginning after portfolio stabilization and exit upon stabilized portfolio sale or recapitalization. It will be managed by Groma, with advisory board seats available to strategic investors.

Groma Boston Fund II follows on the heels of Groma Boston Fund I, which launched in 2020 with a similar mandate to invest in small-unit-count multifamily properties under Groma’s value-add modern urban rental strategy. Three years in, Groma reports that Fund I is providing investors annual distributions in excess of 6%.

“Fund I’s performance benefited enormously from Groma’s custom-built tech platform, which enables us to acquire, modernize, and operate [modern urban rentals] more efficiently than has previously been possible,” said Christina Dorobek, Groma’s head of investor strategies. “In the years since Fund I closed, we’ve continued to upgrade our tech stack and operational processes, including the official launch of Grobot, our AI property management system, in order to improve our opex ratio.”

“In addition to our operational improvements, we believe that broader market conditions for 2024 present a unique opportunity for the small multifamily asset class,” said Michael Rosenstein, Groma’s vice president of acquisitions. “Stresses from the pandemic mean that many of these properties are still undervalued. Coupled with expected rate cuts later this year, it’s possible that we won’t see a better buying opportunity than this for quite some time.”

Earlier this month, Groma shared the launch of its third Delaware statutory program, Groma DST III.

Groma is a vertically integrated real estate and technology firm. The company was founded in 2020 and is headquartered in Boston.

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