Continental Closes Another Multifamily Fund With Eye on Long-Term Investors

On April 20, 2021, Continental Properties Company closed the $206 million Continental Properties Real Estate Income Fund II. Immediately afterward, it used the fund to acquire a $588 million portfolio of 10 suburban multifamily communities that it developed.

In January 2021, the company closed Continental Properties Real Estate Development Fund I, which closed with $180 million of equity and up to $700 million of total construction costs. In November 2019, it closed Continental Properties 2019 Real Estate Income Fund with a total equity of $158.5 million and a total portfolio value of $598 million.

Before creating these income funds, Continental would sell a portion of its developments each year. But the company says many of its investors prefer to be long-term owners of the communities in which they invest.

“Our income funds enhance our development offerings by providing investors with the option to create liquidity after our apartment communities are completed and fully leased,” said Jim Schloemer, founder and chairman of Continental Properties and treasurer of the National Multifamily Housing Council, said in a prepared statement

Alex Wagner, director of Investor Relations for Continental, says the company expects to continue the income fund series of funds with another offering in the second half of this year.

Dan Minahan, president and COO of Continental Properties, said the interest received in Income Fund II surpassed the company’s expectations. He said the newly constructed suburban communities in the fund were attractive to investors. Other draws for investors included regular quarterly distributions starting at the end of June 2021 and the ability to capitalize on low-interest rates and lock in long-term interest-only debt.