Group One Investments, a private equity real estate investment and management company in Chicago, has a $125 million fund targeting multifamily properties in Southeastern and Southwestern markets.
Fund I will not invest in single properties, but rather in a portfolio of properties that is diversified by geography and by property class. According to Group One, this allows the fund managers to balance appreciation and cash flow amongst the different investments, while deferring tax liabilities.
Multifamily developments in Atlanta, Charlotte, N.C., and Albuquerque, N.M., with a combined total of 850 rental units already have been acquired. The company expects to add additional portfolios in several more cities this year.
Fund I will consist of $25 million of equity, including a $2 million stake from the fund managers, with the balance of the fund being leveraged. A minimum investment of $250,000 will be required for all participants.
"Our private equity structure allows us to take maximum advantage of the currently favorable interest rate market," says Group One founding principal Robert Weitzman. "This leverage helps generate important tax-deferral benefits, which can effectively boost investor returns by up to 400 basis points over the rate of return of the fund."