LTL Investments plans new US multifamily strategy [updated]

US real estate investor LTL Investments is keen to raise finance to invest in multifamily opportunities across the US, according to sources.

IPE Real Assets understands that LTL is looking to raise an initial $200m (€192m) for its new strategy.

LTL has a long track record of investing in middle market multifamily assets, having completed $8bn worth of multifamily acquisitions.

Alex Norman, senior vice president of LTL, declined to comment on the firm’s fundraising plans, but said: “We strongly believe the next 12-18 months will offer one of the best windows of opportunity in a decade to buy high-quality real estate in the US at a discount – but only for investors able to pay in cash, using no leverage. This will be particularly true in the middle market of assets priced between $25m and $100m.

“This is because there are going to be individual assets that are either over-leveraged or a newly constructed property that has a construction loan that needs to be paid. As the US Federal Reserve and the Bank of England continue to raise interest rates, leveraged buyers – who represent most institutional real estate sponsors in the middle market – will not be able to buy because of the cost of their debt. So there are going to be specific opportunities where owners are going to need to sell and the pool of available buyers is going to be much smaller.” 

LTL focuses on workforce housing, which it said tends to be more affordable.

Norman added: “We buy properties in very high-quality markets, but we tend to buy class-B properties. We stay away from the very high-end luxury properties which are less affordable to people. So what we tend to focus on are properties where that affordability level for renting is a significant gap below what people might pay for a mortgage for a single-family home. So we have a truly different segment of customers.”

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