After securing $131 million in its first round of funding, Urban Catalyst is set to start construction on seven projects in San Jose, Calif.
The real estate equity fund began its fundraising process for its Urban Catalyst Fund I on Jan. 24, 2019. Since then, Urban Catalyst secured capital from 356 investors by the fund’s end of fundraising on Dec. 30, 2020. The fund noted that 75 percent of the funding raised in 2020 came from tech workers from nearby companies. While tech workers want to see quality developments in the area, major tech companies have also invested into San Jose’s housing stock. Facebook recently committed $150 million to affordable housing projects in the Bay Area, with a San Jose project being one of the first to receive funding.
As for Urban Catalyst’s projects, the $131 million raised will go towards seven ground-up developments. The projects vary in usage including residential, student housing, senior housing, office, hotel and mixed-use. The fund plans to deliver 139 units of co-living spaces through Madera @ Downtown West, 167 units of senior housing with Delmas Senior Living, 222 units for student housing through The Mark and 348 traditional units from The Icon among the projects’ other commercial uses.
“There is so much demand for multi-family housing, we literally can’t build housing units fast enough and we want to contribute to solving the housing crisis one unit at a time,” Erik Hayden, founder of Urban Catalyst, told Multi-Housing News.
BUILDING FOR BETTER DAYS
While funding is secured, Urban Catalyst is still in the process of submitting building permits for its seven projects. The fund also recently closed escrow on the final property, Madera @ Downtown West, in December and is expecting to start construction on all of its projects in 2021 and 2022.
Once construction is underway, Hayden said in prepared remarks that Urban Catalyst will be able to take advantage of the lower construction costs that have been caused by the COVID-19 pandemic. Hayden also added in his prepared statement that 2020 was a year of extreme uncertainty but that Urban Catalyst plans to deliver the seven projects into a recovering economy.