Bridge Investment Group Partners, a Salt Lake City-based real estate investment manager, has garnered about $231 million for its latest multifamily and office fund with a target final close in July.
The firm launched Real Estate Opportunity Capital Multifamily and Office Fund III, a value-add vehicle with a $750 million target, in December 2014. About 60 percent of investors in its predecessor fund have invested to date, with additional commitments expected, sources with knowledge of the fundraising process said. The firm’s investment strategy is a continuation of that deployed in the earlier vehicles in the multifamily and office series, with a focus on Class B assets, operating all of the purchased assets for value-add improvements, and implementing state of the art social programs and amenities. The fund projects substantial current cash flow and meaningful capital appreciation as assets stabilize and optimize.
Founded in 1991, Bridge launched its fund management business in 2009 as a real estate operator focused primarily on the multifamily sector and now manages over $5 billion in assets. The latest fund’s investor base includes pensions, endowments, foundations, funds-of-funds managers, family offices and selected high net worth individuals.
ROC I, a 2009 fund, garnered $124 million equity with $16 million co-investment and ROC II, a 2012 fund, garnered $595.5 million. As of September 2015, the funds generated net internal rates of return of 16.3% and 28.3%, respectively, and net multiples of 1.75x and 1.49x, respectively, according to an investor document PERE reviewed. Because of market conditions, sources with knowledge of the latest vehicle told PERE the firm is targeting a return in the mid-teens.
Bridge plans to make 80 percent of its investments in multifamily assets and 20 percent in commercial office located in rapidly growing secondary cities throughout the US. The firm intends to invest until January 2018, making purchases between $5 million and $50 million. The firm has already acquired 16 assets for $603 million and has an addition three under contract for $164 million, according to a document sent to investors in December. One of these properties, for example, is the Landmark at Banyan Bay, a 646-unit apartment complex in the Atlanta, Georgia suburbs with a tennis court and swimming pool. Bridge purchased the property in July 2015 for $30 million.
In July, the firm closed ROC Seniors Housing Fund Manager with $735 million of equity capital, far surpassing its initial $450 million target for the fund. That vehicle, launched in November 2013, is the real estate investment manager's first offering dedicated to the niche strategies of US seniors housing and medical properties. Bridge also operates a fixed income fund, ROC Debt Strategies, which, along with affiliated vehicles, has raised and deployed about $350 million since it launched in 2014.