Commercial real estate firm Grubb Properties announced the launch of its 2021 Grubb Qualified Opportunity Fund, a private real estate investment trust that plans to invest in multifamily properties in designated opportunity zones nationwide. According to the company, the fund seeks to raise $200 million.
The company’s prior two Regulation D funds, 2019 Grubb Qualified Opportunity Fund and 2020 Grubb Qualified Opportunity Fund, had a similar investment focus and raised a combined $200 million from accredited investors.
Grubb Properties indicated that its latest fund plans to focus on essential housing in high growth markets, primarily in areas with strong job centers including universities, health systems and/or governmental agencies.
Grubb Properties’ Link Apartments brand, which include properties developed and professionally managed by the firm, is the core focus of its latest opportunity zone fund. The properties are designed to appeal to young professionals earning from 60 percent to 140 percent of area median income. The buildings are National Green Building Standard certified, and many include electric vehicle charging stations and proximity to bikeways.
Grubb said that demand for essential housing has increased as renters seek apartments in urban, transit-oriented locations close to fixed major employers. Meanwhile, this demand has dramatically outstripped supply, which has dipped to historic lows over the past decade, while rents have risen faster than wages and inflation, the company added.
“Virtually no other new multifamily product is being developed in the essential housing segment in our target geographies,” said Clark Spencer, manager of the Grubb qualified opportunity funds. “Our investment strategy focuses on essential housing because we believe it to be one of the most resilient asset classes, given little new construction and growing demand…”
2021 Grubb Qualified Opportunity Fund plans to target a 10 percent allocation to a community development initiative. Returns on this portion are capped at a 10 percent internal rate of return with any excess donated to community partners in the areas the fund serves, the company said. No asset management fee is charged for funds deployed in community development initiative projects.
Founded in 1963, Grubb Properties is 100 percent employee- and board-owned, and develops, operates, and manages properties primarily within the Southeast U.S., including commercial, multifamily, and mixed-use projects. The firm has corporate offices in Charlotte, Cary, and Winston-Salem, North Carolina, and Atlanta, Georgia.