Carmel Partners Closes $1.4B Fund in Sizable Multifamily Bet

Carmel Partners is coming to a multifamily property near you after sealing another massive investment fund.

The California-based company announced the final close of Carmel Partners Investment Fund 9 on Tuesday. The multifamily real estate value creation fund raised $1.35 billion and is already on the acquisition path, buying nine properties through the vehicle. It’s open to existing properties, development projects and debt acquisitions.

“Fund 9 has a well seeded portfolio with $477 million in committed equity and is deploying into what we believe is the most attractive multifamily opportunity set that the firm has seen in almost 30 years of investing,” chief executive officer Ron Zeff said in a statement.

Among the investors for the fund were U.S. and international pension funds, endowments, foundations, family offices and high-net worth managers. Carmel plans to target supply-constrained markets across the country, including California, Boston, Denver, Hawaii, New York, Seattle and Washington, D.C.

Since beginning a series of fundraises in 2003, Carmel has secured more than $8.5 billion. Founded in 1996, the company has renovated or developed more than 57,000 apartment units with a combined estimated gross value of $23.7 billion. It has also made 22 debt investments.

In January, Carmel was nearing a deal to buy MetLife’s minority stake in a five-building, 710-unit portfolio near Columbus Circle in Manhattan worth $500 million. Four of the five buildings are free market and the fifth is subject to an older 421a agreement under which an owner could raise rents by 47 percent before hitting their legal rent limits.

And in October, Carmel bought Stella, a 244-unit apartment building in Marina del Rey, from Nuveen for $141 million. The sale marked the priciest multifamily trade in Marina del Rey in more than a decade, though it was a cut of about 15 percent from the $167.3 million that Chicago-based Nuveen paid for the Stella property in 2013.

Other firms raising money in the multifamily sector include Fort Lauderdale-based Affiliated, led by Nick Rojo and Jeff Burns, which in October was looking to raise $250 million to provide equity capital for mixed-income multifamily projects across Florida.