Atlanta–Carroll Organization has closed its first private equity fund, Carroll Co-Invest Fund I, for the purpose of jumping into the heated world of multifamily investment. According to Carroll, an Atlanta-based owner-operator of multifamily properties, the fund will realize the acquisition of about $300 million of multifamily properties over the next 12 to 24 months.
The fund is hardly alone in its interest in apartment properties, and for good reason. According to the National Multi Housing Council, annual returns for U.S. apartment properties had returned by 2010 to an average of over 15 percent, recovering almost completely from the trough years of 2008 and 2009.
“Theoretically, you could say that any potential purchasers of A and B+ multifamily properties in the Southeast or in Texas are our competitors,” Patrick Carroll, CEO of Carroll Organization, tells MHN. “Still, in all our investment markets we cultivate key relationships with property owners that allow us to source deals off market. We also have a reputation of being able to quickly execute, which lets brokers know we can close, and provides us with additional off-market deals.”
Carroll adds that the industry is on a major upswing as positive demographics are on its side and investment dollars are pouring into this space. Acquiring properties is only the beginning for the fund, since most of them will be value-add propositions. “We will also continue to use our management capabilities to improve the properties we purchase, as well as those that we manage,” he says.
The goal is to grow the Carroll Organization’s ownership portfolio to 10,000 units over the next two years. Carroll says the recently closed fund is a geographically specific and fully discretionary investment fund, and notes that the company will also continue to partner on a deal-by-deal basis with joint venture equity partners.