Waterton Closes On $920M Fund, Its Biggest Ever

Presidential Towers, Chicago
Courtesy of The Habitat Co.
Presidential Towers, Chicago

Waterton is ready to start buying real estate again. The Chicago-based real estate investor and operator, which spent much of 2016 in sell mode because of a highly competitive investor market for value-add multifamily, received $920M in equity commitments for its recently closed fund. The total exceeded Waterton's $750M target.

Waterton, which focuses on value-add properties, plans to use the fund to acquire more than $2.5B, including debt, on 25 to 30 properties through 2020, and has already closed or committed to six transactions, totaling $400M, through the fund.

Waterton Chairman and CEO David Schwartz told Crain's Chicago Business the firm will be patient with its acquisition strategy. Schwartz told Bisnow in 2016 the firm looked at 400 deals and only closed on six. Waterton wants to focus on well-located properties and is willing to assume loans with above-market interest rates if the yields the firm seeks are there.

With interest rates continuing to inch higher and apartment values soaring, multifamily is a seller's market. Schwartz said he believes Waterton will have solid investment opportunities in overbuilt markets, and that Waterton's platform will allow investors to achieve the yields they are seeking. Waterton has invested in $6.7B in multifamily transactions, totaling 54,000 apartment units in 23 states, since its formation in 1995.

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