Carroll Corrals Equity for Rental Fund
Multi-family specialist Carroll Organization has raised $40 million of initial equity for its fifth fund.
The Atlanta operator pursues a 12-16% return by acquiring apartment properties, primarily in the Southeast and Texas. It is also becoming more active in the Mid-Atlantic region.
The vehicle, Carroll Multifamily Real Estate Fund 5, has a $75 million equity goal, which would make it the sponsor’s largest to date. The $36.5 million predecessor vehicle held a final close last year and is fully invested.
The sponsor’s strategy is to invest via joint ventures. Carroll’s funds take minority stakes of 5-15% and bring in institutional investors as majority partners. With leverage, the fund could own stakes in some $2 billion of multifamily properties. Previous partners have included AIG, Bluerock Residential Growth REIT, Carlyle Group, Crow Holding and Goldman Sachs Asset Management.
Carroll, which held the first close this month, doesn’t use a placement agent. It previously raised equity for its funds from family offices and wealthy individuals, but Fund 5’s marketing campaign is aimed only at institutional investors. The operator believes the switch will enable it to attract more capital. The fund is being seeded by seven apartment properties that Carroll recently bought. The portfolio encompasses 2,500 units in Dallas-Fort Worth, Jacksonville, Fort Lauderdale, Fla., and Charleston, S.C.
Patrick Carroll founded the company as a development firm in 2004 and began setting up funds in 2011. President and chief investment officer Josh Champion and vice president Andrew Zelman lead acquisitions. Vice president of finance Stefanie Bertcher, who joined two years ago from Morgan Stanley, heads investor relations and reporting.
Carroll’s first four funds raised a combined $70 million of equity, and with its joint-venture partners have spent $1.5 billion. The firm, which manages both its own and third-party properties, has interests in about 22,000 units in
SOURCE: www.realert.com
