Introducing Colony Hills Multifamily GP Fund II
Save your spot in a property focused on investing in GP interests for multifamily apartment communities that provides investors outsized returns relative to a limited partner investment.
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Colony Hills Multifamily GP Fund II
What to Know
The Sponsor, Colony Hills Capital, expects to start distributing in Q2 2023 depending on cash flow availability, but the initial value-add strategy remains on track. The Sponsor is an established real estate investment management company that was founded in 2008, and has structured and closed 35 residential properties in eight states totaling more than 11,200 apartment homes for a combined value of over $1B
The Fund intends to target six to nine value-add, class A-/B multifamily properties with 100 units or more located in markets that are business friendly, exhibit strong job growth, high median household income, and demonstrate favorable demographic trends. The Fund’s objective is to seek current income and capital appreciation through the acquisition of multiple, income-producing properties acquired at prices below replacement cost.
‣ The Sponsor has an existing relationship with established property manager, Asset Living, who will serve as the primary on-site property manager.
‣ Asset Living is a real estate property management company with 35+ years of experience and over a cumulative 400+ years of executive experience. The firm manages over 175K units, 125K beds in 140 markets throughout the United States (40 states).
‣ Given its focus on value-add investments (as opposed to ground-up construction), the Fund will offer investors a compounding 8.0% annualized preferred return and will seek to distribute excess investment level cash flow to investors to the extent that it is available.
‣ The Fund has a two-year commitment period but investors will receive the benefit of having their investment accrue immediately upon the close.
‣ According to GreenStreet Advisors, Multi-Family fundamentals have generally remained strong following the pandemic boom and most of 2022, relative to the historical sector growth. The last 3 years have seen a (pandemic-driven) strong housing market/suburban pivot drive median home prices up by a cumulative 40%.
‣ Despite household formations anticipated to lag the 1985-2022 average of 1.2M per year in the next 4 years, financial barriers to homeownership and work-from-home demand provide tailwinds to renter demand.
‣ REIS forecasts a five year average absorption of positive 140K units per year and average asking rent growth of 3.2% annually. Over the same period, vacancy is projected to increase 10 basis points from 4.6% to 4.7%.
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