ACRE Secures $300M Investment from StepStone Group

The commitment includes a recapitalization of an existing portfolio and future development opportunities.

Example of portfolio properties in Georgia and Florida. Image courtesy of ACRE

Example of portfolio properties in Georgia and Florida. Image courtesy of ACRE

StepStone Group, a global private markets investment solutions and advisory firm, has invested $300 million as part of a multi-pronged capital commitment to ACRE in a new strategic partnership that includes a portfolio recapitalization and plans to invest in multifamily properties across the U.S.

ACRE, a global real estate private equity firm that manages capital for institutional and family office investors through private equity and debt funds, currently has more than $3.5 billion assets under management. The commitment from StepStone, a leading pension fund allocator and one of the world’s largest institutional consultancies, is broad-based and is underpinned by recapitalization of a 1,500-unit multifamily portfolio from an earlier ACRE fund. It also includes a joint venture focused on development opportunities in multifamily opportunities across the risk spectrum such as value-add acquisitions, lease-up and ground-up development across the Sun Belt, Midwest and Texas, and a primary fund investment.

The 1,500-unit portfolio that was recapitalized comprises four properties in the Atlanta and Athens, Ga., areas and three in Florida in the Tampa, Fla., and Cape Coral, Fla., markets. The vehicle has secured 3.2 acres of land in Miami for a 349-unit multifamily project; a 158-unit build-to-rent development site in Port St. Lucie, Fla.; a 337-unit development in Chesterfield, Mo.; and a 331-unit development site in Bluffton, S.C. It has also made investments in two value-add assets in the Atlanta market and two Class A deals in Miami and Tampa.

Alex Abrams, managing director of StepStone Real Estate, said in a prepared statement the investment with ACRE is a strong fit with the firm’s strategy of recapitalizing best-in-class real estate platforms that own high-quality assets and providing those platforms additional capital to expand.

In June, StepStone Real Estate formed a $90 million co-investment partnership with Blue Vista to invest in purpose-built student housing. The partnership’s first transaction was a 671-bed project in Atlanta’s West Midtown neighborhood serving students at Georgia Tech.

Partnership Details

ACRE Managing Partner Michael Van Der Poel said in prepared remarks securing the commitment from StepStone marks a tremendous achievement for ACRE and its latest fund. PERE reported the fund investment and co-investment capital will be part of ACRE Multifamily Fund IV, which is still raising funds. The portfolio recapitalization is for assets within a prior fund, ACRE Equity Fund III, according to PERE.

Van Der Poel stated adding StepStone to its growing list of investment partners is a testament to the power of ACRE’s offering and the firm’s track record of generating value across market cycles. Other high-profile global investors to ACRE’s suite of investment platforms includes Hamilton Lane, OPTrust and Almanac Realty Investors, the private real estate investment arm of Neuberger Berman.

Since inception in 2011, ACRE’s acquisition, development and lending efforts have spanned 22,000 units from more than 90 investments in 33 cities. This week, ACRE broke ground on Pepper Hall, a 331-unit multifamily community in Okatie, S.C., in the Bluffton-Hilton Head area. The project is being developed in partnership with Southeast Partners and is slated for completion in early 2024. Earlier this year, ACRE sold four communities totaling nearly 900 units in Georgia, Florida and North Carolina.

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