IEC Closes on California Apartment-Specific Investment Fund

The fund is the firm’s largest one thus far, comprised of equity from new and repeat investors.

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Los Altos, Calif.Interstate Equities Corporation (IEC), an institutional fund manager that invests in California apartments, has closed its IEC Institutional Fund III LP, a commingled fund with $200 million in equity commitments. The fund is the firm’s largest one thus far, comprised of equity from new and repeat investors, including family offices, endowments, foundations and corporate pension plans.

“Our firm specializes in renovating and repositioning apartment communities in California, with a focus on assets that are often under 100 apartment units,” noted Marshall Boyd, who co-leads IEC as president with Julia Boyd Corso. Generally, he added, the funds range from 20 to 400 units.

During the last 12 months, for instance, IEC acquired Citra Apartments, an un-renovated multifamily property near downtown Burbank, and Marin Gardens Apartments, another un-renovated multifamily community in San Rafael, Calif. Both of these acquisitions provided the opportunity for significant value-add redevelopment.

After a history of high-net-worth capitalized discretionary funds and institutional separate accounts, IEC Institutional Fund III is its first commingled, institutional vehicle, according to Peter Casey, director of equity formation. “In this fundraising environment, where the majority of institutional capital is being allocated to larger and more diversified funds, it can be difficult for newer and smaller funds to gain traction in the marketplace,” said Casey.

Founded in 1981, IEC has taken 85 properties full-cycle for its investors, and has completed more than $1.5 billion in real estate transactions since 2006. IEC has also been transacting and managing its own assets since its inception.