CHICAGO, January 20, 2022–(BUSINESS WIRE)–Origin Investments, one of the most successful private real estate managers, launches Growth Fund IV, a $250 million closed-end fund to invest in up to $1 billion growth markets in the southwestern and southeastern United States The Fund will invest both as a general partner and as a limited partner alongside sponsors in Origin’s target markets. Origin secured seed assets for the Fund, including a 310-unit single-family rental community in a booming, job-rich suburb of Austin, Texas.
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Origin Investments’ Growth Fund IV targets bottom-to-bottom growth and a net equity multiple of 1.7 to 1.8x. (Graphic: Business Wire)
“Growth Fund IV has been designed to maximize risk-adjusted returns. We see the greatest opportunity in developing from scratch given changing conditions in the multifamily housing market,” said Michael Episcope, co- CEO of Origin Investments. “There is too much investment capital targeting value-added opportunities today, and that is pushing the prices of existing transactions well above replacement cost. Development is simply a better way to enter these markets. because we will have a portfolio of Class A properties at a lower price than properties 10-15 years older.”
Earlier in January, Origin predicted that the pace of building from scratch would increase this year because development fundamentals favor both equity and debt financing and there is so much capital available to invest in these investments. Origin’s analytics show that development from scratch can yield 10% to 30% above replacement cost at disposition, while value-added properties trade at replacement cost or above.
Invest for growth, stay for tax-efficient income
The main advantages of Origin Growth Fund IV include:
A targeted and opportunistic net internal rate of return (IRR) of 14% to 16% and a net equity multiple of 1.7x to 1.8x.
Investment in 10-12 new development projects, diversified in performing markets with the greatest long-term potential in the Southwest and Southeast United States
One of the shortest fund durations on the market; The initial term of the Fund ends four years after the end of the capital raising period.
Access to a proprietary deal flow pipeline based on Origin’s longstanding relationships and prolific track record as one of the most active investment managers and developers in multifamily housing over the past 12-18 years last months.
An option to stay after four years to enjoy a high-yield, tax-efficient income stream of 7% to 9% on invested capital.
A unique feature of Origin’s Growth Fund IV is a flexible holding period option. Four years after the end of the capital-raising period, investors can redeem up to 100% of their interest in Growth Fund IV or choose to remain in the Fund and continue to receive tax-efficient distributions .
“Historically, the most effective investment strategy for creating wealth has been to invest in quality real estate assets for the long term. beneficial and additional appreciation. Investors are beginning to realize that the buy-fix-sell strategy does not maximize wealth,” Episcope said. “However, investment goals can change, it’s why we added cash on an annual basis after the first four years as a flexible option to meet investor needs.”
Origin’s First Growth Fund IV Investment in Suburban Austin
Growth Fund IV’s first investment is Preserve at Star Ranch, through a joint venture co-general partner with Houston-based Guefen Development. This will be the third joint venture between the two companies in less than two years, with three more expected to be concluded between the companies later this year.
“Launching a fund with multiple projects already in place offers investors tremendous value,” Episcope pointed out. “In addition to putting capital to work immediately, investors can see and assess where their money is going.”
Preserve at Star Ranch is a 310-building horizontal single-family residential community located in Pflugerville, Texas, a rapidly growing suburb of Austin. The community will capitalize on recent single-family home rentals and feature state-of-the-art amenities including a swimming pool, fitness center, and expansive common and community building areas.
Including the development of Preserve at Star Ranch, Origin already has a pipeline of development deals totaling approximately $350 million that could close in the first quarter of 2022.
Origin will accept commitments from accredited investors for Growth Fund IV until it raises $250 million in capital or the end of March 2023. For more information on investing in Origin Growth Fund IV, visit at https://origininvestments.com/offerings/growth -fonds-iv/. Origin is actively fundraising for Growth Fund IV as well as its three other funds: IncomePlus Fund, Origin Qualified Opportunity Zone Fund II and Multifamily Credit Fund. The four funds have been designed to meet different investment criteria based on the needs of high net worth individuals. In 2021, Origin raised $500 million for equity investment in four funds.
About Origin Investments
Origin Investments is a private property manager that provides best-in-class property solutions for individual investors, family offices and advisors to build and preserve their wealth. The company builds, buys and finances multi-family real estate projects in fast-growing markets across the United States Since its inception in 2007, Origin has executed over $2.6 billion in real estate transactions and our principals have invested over $60 million alongside our investors. Origin prides itself on providing unparalleled service to its investors and its performance ranks us in the top decile of top performing private real estate fund managers ranked globally by Preqin, an independent provider of alternative investment data. Origin is currently accepting new investors for its Open Growth Fund IV, Qualified Opportunity Zone II, IncomePlus and Multifamily Credit Funds, which seek to provide tax efficiency, enhance portfolio yield, maximize growth and minimize market volatility. wallet. To learn more, visit www.origininvestments.com.
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Michael Millar, Open Slate Communications