Add The Bascom Group to the list of firms raising money in recent months for value-add and distressed acquisitions.
The Irvine, California-based real estate investment firm has launched a new Rule 506(c) fund offering to target $500 million in value-add, discounted and distressed apartment acquisitions.
Bascom Value Added Apartment Investors VI is the company’s sixth private investment fund and is seeded with five multifamily properties acquired at an average 29% discount to peak pricing, according to a news release.
Bascom, which specializes in value-add multifamily, commercial and non-performing loans and real estate-related investments and operating companies, says that apartment prices dropped 20% to 30% from their peak values due to capital market dislocations, rising interest rates and oversupply in certain markets.
"Capital market dislocations are creating considerable opportunities to acquire attractively priced apartment investments,” Jerome Fink, managing partner at Bascom, said in the release. “This coupled with shortages in single-family housing supply and growing affordability challenges continue to drive demand and forecast rent growth for apartments.”
With the fund, Bascom plans to target newer constructed properties trading at discounts to replacement cost, over-leveraged apartments facing loan maturities, assets in out-of-favor markets with attractive going-in cap rates and buildings needing capital to compete with newer properties.
"Fund VI is focused on acquiring apartment properties throughout the U.S. that can be repositioned through value-add renovations, management improvements, recovery from being over-leveraged and distressed or may be trading at a significant discount,” Bascom Fund Manager Chad Sanderson said in the release.
A rise in funds
Several groups have recently launched vehicles to acquire properties at discounted costs.
Earlier this month, Clear Investment Group announced it plans to raise $300 million through its Clear Opportunities Fund II to acquire workforce properties nationwide. The Chicago-based apartment owner is focusing on properties with strong fundamentals and untapped potential in stable markets where workforce housing supply is low.
Also, earlier this month, Wellington, Florida-based apartment owner, manager and developer The Bainbridge Cos. held a first closing of approximately $150 million in commitments for the Bainbridge Multifamily Acquisition Fund I.
With a target raise of $250 million in commitments, Bainbridge plans to acquire 1990s and newer apartments at discounts to replacement cost in Sun Belt and mid-Atlantic markets.
“When you are a vertically integrated operator like we are, a fund gives you the ability to move very quickly to find opportunities,” Bainbridge Executive Vice President and Chief Legal Officer Brian Doppelt told Multifamily Dive.
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