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Chicago’s Redwood bought by Swedish investor eyeing multifamily market

Second Chicago multifamily landlord to score big private equity investment lately

From left: Redwood Capital Group's Mark Isaacson, EQT Exeter's Ward Fitzgerald, and Redwood Capital Group's David Carlson (Redwood Capital Group, EQT Exeter)
From left: Redwood Capital Group's Mark Isaacson, EQT Exeter's Ward Fitzgerald, and Redwood Capital Group's David Carlson (Redwood Capital Group, EQT Exeter)

Chicago apartment owner Redwood Capital, which oversees more than $1.7 billion of assets, was bought by Stockholm-based EQT, marking the second time in a month that a local multifamily landlord has drawn a big investment from a private equity firm.

Redwood, founded in 2007 by Mark Isaacson and David Carlson, owns 30 U.S. rental properties, including eight in suburban Chicago and others in states including Texas, Florida and Colorado, according to a statement from EQT. The terms weren’t disclosed.

The move comes within days of Chicago apartment landlord Waterton, headed by CEO David Schwartz, receiving an infusion from New York’s Almanac Realty, the real estate arm of Neuberger Berman. Almanac bought a 20 percent stake in Waterton, which owns 26,000 apartment units nationwide, including the West Loop Presidential Towers complex of four 49-story towers totaling more than 2,300 homes.

Chicago multifamily properties are in the spotlight as single-family home costs and mortgage rates keep rising, preventing many renters from making the leap into home ownership and fanning bets that apartment rents will keep rising. Office investors, including Chicago’s Ameritus, have turned toward multifamily assets as stubborn work-from-home preferences limit the growth of the commercial real estate market.

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“Expanding our multifamily offering is a crucial step in our growth,” Ward Fitzgerald, head of EQT Exeter, the Stockholm company’s real estate arm, said in the statement. “This combination offers a fantastic opportunity to build on the significant track records of both our firms.”

Redwood’s 35 full-time employees will join EQT Exeter’s U.S. multifamily team. The expanded firm will include more than 50 investment professionals and Redwood’s in-house property management staff. Carlson will lead the combined group and report to Fitzgerald. EQT Exeter has more than 1,800 properties worldwide in sectors as varied as offices, life science centers and housing.

Redwood’s acquisition by EQT is expected to close in the third quarter.

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EQT ExeterSuburban Chicago