Brookfield closes $1bn US multifamily value-add fund

Brookfield Asset Management and Fairfield Residential’s third multifamily value-add fund has raised $1bn (€860.3bn) at final close.

Brookfield Fairfield US Multifamily Value Add Fund III (VAMF III) seeks to invest in multifamily assets throughout the US by acquiring and renovating existing apartments and engaging in ground-up development in select coastal markets.

The target returns for the fund are 12-13% net and 14-16% gross, with a gross multiple of 1.8x. A cash-on-cash return of 4-6% is projected during the holding period of the fund.

IPE Real Assets reported in March that Brookfield had raised $503m for VAMF III and received a $75m commitment from Ohio Bureau of Workers’ Compensation.

The managers said investors in the fund are a diverse group of more than 25 institutional investors, including public and private pension plans, registered investment advisors, financial institutions, endowments and foundations and family offices.

Brookfield will co-invest $300m in the fund, while Fairfield will also provide 5% of aggregate commitments up to $30m. Fairfield is majority-owned by Brookfield and minority-owned by the California State Teachers’ Retirement System.

Trey Stafford, a portfolio manager at Fairfield, said: “We are grateful for the strong commitment and support we have received from our investors in raising our largest multifamily fund ever.

“Today, the multifamily space has great market fundamentals alongside strong demographic trends that create a compelling opportunity for us to apply our fully integrated platform to generate and execute on multifamily investments.”

To date, the fund has 16 investments closed or under contract throughout the east and west coast of the US with almost $470m of equity committed to those investments.

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