Waterton Climbs Higher with $1.73 Billion Fund Closing

Major Fund Milestone for Waterton

Waterton has successfully closed its Waterton Residential Property Venture XV, L.P. with a remarkable total of $1.73 billion in equity commitments. This fund has emerged as one of the largest dedicated multifamily value-add funds, driven by an extensive collaboration of global institutional investors. The company intends to strategically allocate this capital amidst a period of price volatility within the sector.

Investment Strategy and Market Insights

According to David Schwartz, the chairman and CEO of Waterton, significant investment opportunities are anticipated in the multifamily sector, primarily due to ongoing disruptions driven by rising interest rates and an oversupply in specific markets, which still display promising long-term fundamentals. Schwartz emphasizes that the fund's creation reflects Waterton’s nearly three-decade commitment to this sector, which presents unique opportunities for generating excess returns in the present market situation.

Confidence in Fund Success

Michelle Wells, managing partner of investor relations at Waterton, highlighted that the successful fundraising took place amid a challenging market. This success is a testament to Waterton's proven track record as a multifamily specialist and the solid relationships the company has cultivated with its investors. Wells expressed her enthusiasm regarding the impressive consortium of both established and new global investors participating in the fund, emphasizing the prospects of investing within an anticipated favorable cycle.

Investment Progress and Focused Acquisitions

The initial closing of Venture XV was marked at the close of 2022, followed by a selective investment approach throughout 2023. The first major investment for Venture XV included a prime 2020-construction, 346-unit high-rise located strategically in a desirable urban core area. Subsequent acquisitions have spanned diverse markets, including properties close to Seattle and areas near New York City, highlighting Waterton's expansive investment reach.

Targeting Growth and Distressed Properties

Venture XV aims to explore both distressed properties and traditional value-add investments that align with Waterton's comprehensive operational strategy. The vision is to invest approximately $5.0 billion in gross assets, combining both equity and debt, across a portfolio of 30 to 40 multifamily properties nationwide. Consistent with the preceding $1.5 billion fund launched in 2020, Venture XV will focus on opportunities in urban and suburban markets, prioritizing well-located workforce housing in areas exhibiting job growth and reliable employment metrics.

About Waterton

Waterton, established in 1995, operates as a real estate investment and property management firm primarily targeting U.S. multifamily and hospitality assets. The company implements value-add strategies while managing a vast national portfolio for an array of institutional clients, family offices, and financial entities. As of mid-2024, Waterton boasts a portfolio inclusive of approximately $10.0 billion in real estate holdings, positioning itself as a key player in the multifamily investment landscape.

Frequently Asked Questions

What is the total investment amount for Waterton's latest fund?

The total amount raised for Waterton Residential Property Venture XV is $1.73 billion.

What types of assets will Venture XV target?

Venture XV will focus on both distressed properties and traditional value-add investments in major U.S. markets.

When was the first close for Venture XV?

The first close for Venture XV took place at the end of 2022.

How long has Waterton been in business?

Waterton was founded in 1995, making it nearly three decades of experience in the real estate sector.

What is Waterton’s strategy regarding investor relationships?

Waterton focuses on building long-term relationships with investors to foster trust and collaboration.

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