Security Properties Closes $200M Multifamily Fund
The firm’s sixth investment vehicle has acquired properties in 11 markets.
Security Properties has closed its latest multifamily fund at $200 million. The investment vehicle, Security Properties Multifamily Fund VI, invested in a total of 28 multifamily properties across the U.S.
Seattle-based Security Properties was initially targeting a fundraise of $150 million for its sixth fund, but expanded the cap to a maximum of $200 million. Fundraising for Fund VI began in the summer of 2021, with the fundraising period expected to take more than two years. However, the fund raised $200 million in equity in six months, according to a prepared statement from Security Properties.
Fund VI invested in several existing apartment communities in 11 metros, including Nashville, Austin, Texas, Salem, Ore., and several other West Coast submarkets. Of its 28 investments, 26 of them had Security Properties as a co-general partner and work with an institutional partner, while the remaining two investments are fully owned by the fund.
The fund combined its $200 million of committed equity, a tenth of which was co-investment from Security Properties and its employees, into joint ventures with 13 institutional partners. Those partners, in turn, contributed an aggregate of $780 million of equity. When combined with Fund VI’s $200 million in equity, the fund collectively acquired $2.1 billion worth of multifamily properties totalling more than 6,400 units. Total leverage on the fund was approximately 60 percent loan to cost.
Strong history of multifamily funds
For Security Properties, its Fund VI is the latest in a series of increasingly large multifamily funds. The firm’s investment vehicles have invested in more than 130 existing, market-rate multifamily properties since 2010.
A full list of the 28 communities acquired by Fund VI was not disclosed, though one was the South Block community in Salem, Ore. Security Properties acquired an Austin-based 304-unit apartment community, Brightleaf at Lakeline, in an off-market transaction last December. More recently, Security Properties partnered with Enterprise Community Investment to acquire the 154-unit age-restricted Hickory Hollow Towers and the 80-unit affordable Colony Square Apartments, both of which are located in Nashville.