October 1, 2020 — Boston Capital Real Estate Partners (“BCRE”), an affiliate of Boston Capital, today announced the first closing of Boston Capital Income and Value U.S. Apartment Fund II (“BCIV Fund II”) at over $133M. BCIV Fund II, continues BCRE’s successful strategy of investing in and rehabilitating market rate rental apartments positioned at an affordable price point relative to new luxury rental housing. This segment appeals to financially resilient middle income residents seeking renovated communities in lower density, suburban locations in attractive primary and secondary markets throughout the U.S. Similar to BCIV Fund I, typical investments will include under-performing Class B apartment communities experiencing mismanagement, under-investment, and/or capital event liquidity constraints. In addition, BCIV Fund II will take advantage of other acquisition value-add opportunities amidst current and emerging Covid-19 related market conditions.
First close investors include prominent pensions, financial institutions, foundations, and family offices. As with BCIV Fund I, BCIV Fund II is structured to tax-efficiently accommodate both qualified and non-qualified foreign pension funds, as well as other non- U.S and U.S institutions and individuals.
“We are very pleased to have held such a strong first close, particularly during the Covid-19 pandemic, and are thankful for the continued support from our existing and new investors. As demonstrated during the GFC, institutional apartment properties provide the most resilient cash flow and greatest liquidity of all asset classes in uncertain times, and Boston Capital has developed specialized expertise over its 46-year track record in identifying and executing on opportunity in the U.S. apartment sector throughout the market cycle,” said Jeffrey Goldstein, Managing Partner.
Commenting on the first close announcement, Mark Dunne, Managing Partner, said: “While market participants continue to assess the pandemic’s impacts on current and future asset pricing, supply and demand fundamentals within the US apartment space remain very favourable for our middle-income value-add strategy. The demand for high-quality, price competitive rental housing in low-density suburban locations is anticipated to increase as a result of aging millennials seeking more space and better school districts, the cost and inflexibility of homeownership, and de-urbanization brought on by the pandemic.”
“We are actively sourcing and underwriting potential acquisition opportunities across our target markets, while remaining cautious on pricing. BCIV II is well-positioned to continue to execute hands-on repositioning of investments and take advantage of select distressed seller opportunities that we anticipate will arise over the investment period”, said Duncan Woodard, Fund Portfolio Manager.
BCIV Fund II is targeting a total commitment size of $300M – $350M and is expecting a final closing by the end of 2021 or before.
Notes to Editors:
About the Fund
The Fund’s strategy is to acquire capital-deprived and/or under-managed Class B apartment communities in high-growth markets with strong demographics across the US. Additionally, select distressed asset opportunities will be pursued. Assets are targeted where there is potential for significant NOI growth through renovation programs, repositioning, market recovery and management efficiency. While classified as value-add, the risk profile is comparable to core-plus strategies, with nearly half of investment returns expected to derive from quarterly income. BCIV II is advised in its fundraising by Capra Global Partners.
About Boston Capital
Boston Capital has been a leader in multifamily housing since 1974 and has invested across all 50 states and U.S. territories. Boston Capital has a combined track record of investing in $20.6B in apartments across 3,530 properties and is experienced throughout multiple real estate cycles. Boston Capital agreed on 9/14/20 to sell a majority of its affordable housing portfolio. Within Boston Capital, BCRE has invested in over $1.7B of value-add/opportunistic, market rate property and is focused on value-creation through active asset management. BCRE will continue to build its investment products and services to maximize value for investors in the market rate apartment space.