Greystar launches $1bn US multifamily fund – exclusive

The Charleston-based company is said to have started fundraising for its largest ever value-add multifamily fund  

Greystar Real Estate Partners, the largest operator of apartment buildings in the US, has launched its next value-add multifamily fund. PERE can reveal that the Charleston-based company is targeting to raise $1 billion for the discretionary commingled vehicle.

Greystar Equity Partners IX, the next in the firm’s series of value-add vehicles that are invested in multifamily assets across the US, is believed to have been launched last month.

Greystar declined to comment on the fundraising. However, PERE has learnt that a first close is likely to be held before the end of the year.

The fundraising target for Greystar Equity Partners IX will be the firm’s most ambitious capital raising exercise to date. The fund’s predecessor, Greystar Equity Partners VIII, successfully raised its $800 million target in June last year.

According to a statement released at the time of the fund closing, the firm said the equity for GEP VIII was raised from a range of LPs, including domestic and international pension funds and private wealth managers.

The details of the investment strategy for Fund IX are not known yet. For Fund VIII, the firm has been implementing a strategy of “aggregating a nationally diversified portfolio of high-quality multi-family assets in target markets that are poised for outperformance”, according to the 2014 statement. The firm also allocated $150 million via the fund toward a seed portfolio of 10 properties, including an asset in Los Angeles.

Greystar Equity Partners VII, which closed on $600 million, is now fully invested.

The firm has also been expanding geographically and increasing its exposure in markets such as Mexico and the UK. In April this year, it acquired a student accommodation portfolio in London from Round Hill Capital, the London-based real estate and energy investment management firm, for £600 million (€855 million; $914 million). The Nido London portfolio comprises three premium student housing assets in London’s Kings Cross, Notting Hill and Spitafields with a total of 2,375 beds.

Greystar, launched in 1993, has more than 400,000 units in over 140 sub-markets.