Griffis Residential has closed on its fourth real estate fund and its first institutional capital raise.
The Denver-based multifamily investment and management firm raised a total of $407 million for Griffis Premium Apartment Fund IV, exceeding its target of $300 million.
Griffis’s latest fundraise is more than four times the size of its previous offering, Fund III, which raised approximately $100 million last year, along with $100 million in co-investment capital.
The firm had primarily raised and invested capital through single-asset syndications from the mid-1980s to 2004, at which time it pivoted to a commingled fund structure, according to David Birnbaum, the firm’s co-chief executive. Griffis’s first three funds were backed by high-net-worth investors and family offices, he said.
Griffis launched Fund IV in August 2016, according to a filing with the Securities and Exchange Commission. The firm expanded its investor base to include institutional capital, attracting commitments from a major college endowment, a large insurance company, as well as a number of consultants and other advisors. Additionally, the majority of Fund III’s investors re-upped with the fund, which also captured investments from new high-net-worth investors.
Geographically, 98 percent of the fund’s capital came from US investors, with the remainder coming from overseas.
To date, the fund is 41 percent committed to the acquisitions of four Class A apartment communities encompassing 1,475 units in the western US. The fund’s current assets include Griffis Southpark, a 330-unit property located in the Austin metro area; Griffis Union Station, a 400-unit multifamily community in downtown Denver; Griffis Northcreek Apartments, a 524-unit property in the Seattle metro area; and Griffis Pine Avenue, a 221-unit property in Long Beach, California.
Through the fund, Griffis will continue to pursue its investment strategy of buying high-quality multifamily properties and creating value through operational and capital improvements. The firm typically targets assets that contain more than 200 units and have a project cost of $50 million to $150 million. With Fund IV, Griffis is targeting approximately $1 billion in multifamily investments primarily in Colorado, Texas, Washington, Oregon, and California.
The firm declined to disclose return targets for Fund IV and performance data for its previous funds.
New York-based capital raising and advisory services firm Shelter Rock Capital Advisors acted as the sole placement agent for the fund. Law firm Clifford Chance advised Griffis on the fund.