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Spencer Hayes' Blog

By Spencer Hayes | Agent in 36117

CAPREIT Preps for $500M Multifamily Buying Spree

ROCKVILLE, MD-Locally-based CAPREIT is poised to embark on a $500-million asset commercial real estate acquisition spree, principals of the firm tell GlobeSt.com. To be precise, the $500 million refers to the total property value in value-add multifamily acquisitions it plans to make over the next 18 months. To fund these transactions, it will be turning to both existing and new partners to raise $150 million of JV equity that will be leveraged between 65% to 70%, president Dick Kadish says.

“We typically don’t raise funds ourselves,” he notes. “Instead, we utilize the vast array of funds out there that are raising money for multifamily.” CAPREIT has been a player in the multifamily space for more than 20 years. “But we’ve never seen such a good time to step up investments as we do now.”

To that end, the firm has made its first hire in more than a decade, recruiting Kevin Smith, the former director of Mortgage Banking at Centerline Capital Group, to join as senior vice president. He will be tasked with identifying the best sources of capital for this investment push. The firm has partnered with Blackrock, Principal, Apollo and Praedium Group in the past and intends to maintain those relationships, Ernie Heymann, CAPREIT SVP and principle, tells GlobeSt.com.

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“But—and this is one of the reasons Kevin joined us--over the past five years we’ve seen such an explosion of funds formed to invest in apartments,” says Heymann. “Previously there were maybe 15 to 20 private equity firms that focused on apartments and maybe a dozen or two insurance companies and pension funds that did the same. Today it seems like those numbers have grown tenfold.”

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