SAN FRANCISCO—Carmel Partners has held a final close of its fifth US multifamily value creation fund, Carmel Partners Investment Fund V. The Fund closed in less than nine months from launch in October 2013.
The fund was oversubscribed on its $1.025 billion hard cap. With the closing of Fund V, Carmel Partners has successfully raised $3.16 billion since inception of the fund series in 2003 of which more than half, or $1.845 billion, has been raised post-global financial crisis through Funds IV and V, according to the firm.
More than two-thirds of Carmel’s investors participate in multiple funds. The capital raised for Fund V represents more than 50 equity commitments from a mix of existing and strategically-targeted new investors.
Ron Zeff, founder and CEO of Carmel, notes that “Consistent with our prior funds, Fund V will seek the best risk-adjusted opportunities across multifamily renovation, development and debt investments in relatively supply-constrained, high barrier-to-entry markets in the US. In the current market cycle, we are continuing to see more development opportunities where we believe our vertical integration enables us to mitigate the risks in execution and construction. Therefore, similar to Fund IV, we expect Fund V to have a high percentage of investments in ground-up development.”
The firm did not have anything additional to add regarding the Fund’s closing by deadline. According to a recent GlobeSt.com article, one major place that San Francisco-based Carmel Partners is looking is New York City. Recently, the firm was said to be the buyer of a $170-million development site at 112-118 Fulton St., in Lower Manhattan. That site would be the second development site in Manhattan for Carmel, headed by Zeff, which owns and develops property nationally. Carmel is part of a joint venture that is building a residential tower at 325 Lexington Ave., between 38th and 39th streets in Midtown. In January, Carmel purchased the 151-unit rental tower 15 Cliff St., in Lower Manhattan, for $95 million, and in 2012 it grabbed the 163-unit apartment building the Electra at 354 E. 91st St., also for $95 million.
In October of 2012, the firm closed its Carmel Partners Investment Fund IV. At the time, a firm spokesperson told GlobeSt.com that Carmel had recently invested in cash flow-challenged assets that are not easily financeable, that require certainty of close and that may require structuring creativity and solutions, including a large multifamily acquisition/rehab transaction in Hawaii, a large ground-up development in California and two debt deals. For that closing, the spokesperson also told GlobeSt.com that Carmel’sFund III was $700 million, so the slightly larger $820-million fund size “is commensurate to the firm’s recent investment pace and strong deal pipeline.”