Hudson Valley Property Group, a New York–based manager that focuses on investment and restoration in the affordable multifamily sector, has closed its second private equity real estate fund with $292.4 million in capital commitments, PERE can reveal.
Hudson Valley Preservation Fund II received commitments from institutional investors including family offices, banks, endowments, foundations, insurance companies and healthcare companies, surpassing its target by $42 million. The fund will target Community Reinvestment Act-eligible properties and focus on the renovation and preservation of existing affordable housing.
“We experienced a very high rate of investors not only recommitting but also upsizing with the latest fund,” Jason Bordainick, managing partner and co-founder of HVPG told PERE.
The manager lined up 83 investors for its second fund, 77 percent of which were institutional. The remainder of the fund’s investors comprise high-net-worth investors and family offices. About 70 percent of the 40 investors that made commitments to the firm’s first fund also participated in its latest offering.
Bordainick said investors wanted to grow their exposure to the strategy while at the same time prioritizing strategies that perform well during inflationary times and market downturns.
“Affordable housing preservation is a resilient real estate strategy that is expected to continue to do well in the market environment,” Bordainick said.
HVPG has been very active in the private equity real estate market over the past three years. In March 2019, the firm’s first preservation fund closed with $60 million in capital commitments. The fund went on to make 13 investments in 25 properties – preserving more than 4,000 units on an assemblage of projects valued near $1 billion.
On behalf of the second fund the manager has already acquired nine properties across New York, New Jersey, Pennsylvania, Maryland and Rhode Island, including in new geographic areas, like Philadelphia and East Providence, expanding HVPG’s portfolio to seven states. HVPG anticipates preserving more than 10,000 units with the latest investment fund.
“We’re continuing to build the platform and adding talent to the team,” Bordainick said. “We will launch a third vehicle only after we have deployed 70 percent of the current vehicle, which could happen in 12 to 18 months.”
To date, HVPG and its funds have utilized equity and capital to leverage more than $2 billion of investment into affordable housing.