Rubenstein-Backed Fund Raises $303M, Buys Into Factory And Apartments
Declaration Partners, an investment firm that launched in 2017 with capital from billionaire David Rubenstein’s family office, raised a $303M fund to target commercial real estate, with nearly 60% of the capital already deployed.
New York-based Declaration has used the capital to enter into deals for luxury apartments in Texas, affordable housing in California and manufacturing in Massachusetts.
Rubenstein, the 76-year-old co-founder of alternative asset management giant Carlyle, contributed capital to the fund with the rest coming from other family offices and wealthy individuals.
The fund has already acquired superconducting magnet company Commonwealth Fusion Systems’ advanced manufacturing headquarters outside of Boston as part of a joint venture. It also made a preferred equity investment in a 381-unit luxury apartment development at 3700 McKinney Ave. in Dallas and entered into a joint venture for an affordable housing project in Los Angeles.
Declaration’s first real estate fund closed in 2022 with $240M raised. Declaration had roughly $2.2B under management at the end of last year and 40 staff, a quarter of which are focused on real estate. Todd Rich, a former partner at JBG Smith and regional managing director at Tishman Speyer, runs Declaration’s real estate business.
“Our family office approach, marked by flexibility and a longer-term investment horizon, enhanced with our strategic partnerships, permit us to find compelling investments when others are sitting on the sidelines or dealing with redemption queues,” Rich said in a statement.
Declaration partner Matthew Cohen told Bloomberg that the firm was finding opportunities to invest in properties that “are below the radar of the largest institutional players.” Its strategy includes joint ventures, preferred equity investments and deals with co-general partner structures.
The investment firm mostly relied on money from Rubenstein after its launch but expanded to bring in other investors on a deal-by-deal basis before launching its first fund and expanding its headcount, per Bloomberg.
Private capital from giants like Blackstone to niche family offices has pushed into commercial real estate over the last two years as banks limited their lending in the space. Private equity firms are continuing to raise billions of dollars and a buying spree has left them owning 10% of U.S. apartment units as of May.
Private fundraising lagged in 2024 but is on track to exceed $125B by the end of the year. Investors are targeting perceived market dislocation where high interest rates, rising operating costs and a glut of construction in some sectors have weighed down values.
