Chicago-based Waterton pledges $150M toward multifamily development

Targets include urban markets across nation and Chicago, where plans for Fulton Market housing are in works

Waterton's David Scwartz and Cobbler Square (Waterton and Waterton, Cobbler Square Lofts)
Waterton's David Scwartz and Cobbler Square (Waterton and Waterton, Cobbler Square Lofts)

UPDATED: Feb. 25, 2022, 4 p.m.: Chicago-based real estate investor Waterton pledged $150 million toward new multifamily housing Friday, further illustrating that nationwide interest in the asset class is booming.

Waterton plans to focus on ground-up construction of affordable, garden-style units and mid-rise structures in suburbs and urban areas across the nation, the Chicago Business Journal reported.

“The new supply of multifamily units added in the last five years relative to the existing stock of housing shows supply is still very low in many markets,” Rick Hurd, Waterton’s chief investment officer, said in a statement. “Development yields are much more pronounced today than in years past and this produces extremely attractive opportunities in select markets.”

Waterton has a Chicago portfolio of 6,154 units, including 5,371 units downtown, the CBJ reported, and is in the early stages of planning a new residential building in the Fulton Market area – where new office demand has been strong amid struggles for the rest of the city’s commercial real estate market.

The firm plans to reveal more details about that project in the second quarter this year, the CBJ reported.

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Waterton last year also closed its latest fundraising round with $1.5 billion of equity commitments from a group of global institutional investors, including the $31 billion Texas Employees Retirement System in Austin; the $20 billion Los Angeles City Employees’ Retirement System; and the $17 billion Ohio Police & Fire Pension Fund in Columbus, the CBJ reported. The fund will invest in multifamily assets in large markets across the country, including Chicago, the outlet reported.

“The undersupply of housing in the United States should continue to benefit the multifamily industry as demand is projected to outpace supply over the next five years in certain markets,” Hurd said in a statement. “And, people will increasingly seek more flexible and affordable housing options.”

[CBJ] – Sam Lounsberry

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