Milestone Group Closes $1.1B Fund Targeting Multifamily in Sunbelt and Mid-Atlantic
The Milestone Group has closed another real estate funding round, with this one fetching $1.1 billion — a move that will give the private equity firm flexibility to explore more multifamily acquisitions.
Milestone Real Estate Investors VI, LP marks the Dallas-based firm's sixth discretionary equity vehicle and it was oversubscribed by investors.
The strategy will involve not only buying but also repositioning undercapitalized and undermanaged multifamily assets in suburban middle-market communities. The fund will focus on the high-growth regions located in the Mid-Atlantic and Sunbelt. So far, the fund has invested in properties in a few regions, including Denver, South Florida and Northern Virginia.
This year, Milestone specifically announced two apartment purchases — one in Brighton, Colorado (252 units) and the other in Lake Worth, Florida (206 units). It's unclear if they were both connected to the fund. Since its 2003 establishment, the company has poured more than $9 billion into over 90,000 multifamily units. This has led to "top quartile returns" in all of its previous discretionary funding rounds, according to Milestone.
"We are grateful for the continued confidence and support of our investors, particularly given the dislocation in today's capital markets," Chris Bartlett, chief operating officer of Milestone, said in a statement.
"The strong demand for Fund VI underscores Milestone's 20-year track record of delivering consistent, strong performance across market cycles. Fund VI is well-positioned to capitalize on what we view as an exceptional opportunity to acquire high-quality multifamily assets at attractive pricing, while continuing to execute our disciplined, risk-aware investment strategy."
The move comes as rents have been weakening in major Sunbelt areas, according to a July report from Markerr. This trend was led by Austin, TX (-5 percent, Cape Coral, FL (-4.4%), Denver, CO (-4.2%), Sarasota, FL (-3.3%) and Phoenix, AZ (-3.2%). Meanwhile, six of the top-performing areas in terms of rent growth were in the Northeast, Mid-Atlantic or Midwest.
Source: GlobeSt/ALM