Origin Opportunity Fund raises $105M in 17 hours, citing “insane amount of demand”

An hour after the fund launched, it had already landed $19M in non-binding commitments

Chicago /
Nov.November 20, 2018 01:30 PM

Chicago-based Origin already counts $105 million in commitments from 425 investors.

Origin Investments last week launched a fund directed at three developments being planned inside Opportunity Zones — one in Denver, and two in Charlotte, North Carolina

Less than a day later, Chicago-based Origin counted $105 million in commitments from 425 investors.

The firm would still be interested in the three development sites, two of which went under contract last week, even if they hadn’t been drawn into Opportunity Zones, Origin principal Michael Episcope said. But the benefit created by last year’s Tax Cuts and Jobs Act gave investors an extra reason to dive in.

“There’s so much excitement around the industry right now about the benefit, which I think is one of the greatest tax benefits in my lifetime,” Episcope said. “When you take an investment that you already would have invested in anyway, and you add the tax benefits, it adds demand exponentially.”

The fund raised more than $19 million in non-binding commitments during the first hour of fundraising alone.

The “insane amount of demand” drove investors to commit about a quarter as much capital into the Opportunity Fund in 17 hours as Origin has raised in its entire 11-year history, Episcope said. The firm’s last major fund closed in June 2017, having raised $151 million over 14 months.

Origin counted more than 500 investors on the waiting list for its next major fund, and many of them converted their interest to the Opportunity Fund instead.

Origin Investments principals David Scherer (left) and Michael Episcope

Since the Treasury Department released guidelines last month on how Opportunity Zones can be used, financial managers from coast to coast have rushed to line up billions of dollars in financing to maximize tax breaks before the program sunsets in 2026.

Origin’s tactic of identifying specific projects before soliciting investments stands in contrast to most other Opportunity Funds generated so far, which are raising “blind” investments for developments to be determined later.

“You can raise $500 million, but if there aren’t projects you want to invest in, it doesn’t do you any good,” Episcope said.

Origin lists 39 office and multifamily properties in its investment portfolio, including three in Chicago and three elsewhere in Illinois.

In 2016, Origin and Randolph Street Realty Capital sold the 73-unit Lux24 apartment complex in the West Loop for $35 million, three years after buying the property for $19 million, according to Crain’s.


Related Articles

arrow_forward_ios
Berkadia CEO Justin Wheeler with Moran & Co.'s Tom Moran (Getty)

Berkadia picks up longtime multifamily brokerage

Berkadia picks up longtime multifamily brokerage
The owner of Johnny’s IceHouse East wants to sell the 50,000-square-foot building. (Johnny's IceHouse via Facebook, iStock)

No more ice ice, baby: Indoor skating rink hits market as redevelopment opportunity

No more ice ice, baby: Indoor skating rink hits market as redevelopment opportunity
110 North Carpenter Street and 333 South Wabash Avenue (Sterling Bay, Shvo)

Here are Chicago’s 10 biggest investment sales of 2020

Here are Chicago’s 10 biggest investment sales of 2020
TTX Company CEO Thomas Wells and 101 North Wacker Drive (Google Maps)

Off the rails: Freight train provider lists West Loop HQ for sublease

Off the rails: Freight train provider lists West Loop HQ for sublease
2430 North Halsted Street and Harrison Street's Christopher Merrill (Sterling Bay; Harrison Street)

Harrison Street raises $720M for life sciences real estate fund

Harrison Street raises $720M for life sciences real estate fund
JDL Development's CRP James D. Letchinger and Halsted Flats (Getty, Halsted Flats, JDL Corp)

Luxury building near Wrigley Field hits market for $125M

Luxury building near Wrigley Field hits market for $125M
Roger Romanelli and Mayor Lori Lightfoot (Fulton Market Association, Getty, iStock)

Restaurant coalition to Lightfoot: Reopen indoor dining

Restaurant coalition to Lightfoot: Reopen indoor dining
Industrious CEO Jamie Hodari and 600 West Jackson Boulevard (Google Maps)

Flex-office provider Industrious sued by landlord

Flex-office provider Industrious sued by landlord
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...