GreenLeaf Partners has secured a $20 million equity commitment from 29th Street Capital, as the operating partner and investment firm target multifamily deals in the western US.
The two firms said the equity would be used to source joint venture deals with other institutional investors and private equity real estate firms, with expectations up to $60 million of capital could be raised.
San Ramon, California-based GreenLeaf told PERE the firm spent much of the past year working with 29th Street founder Stan Beraznik on the equity investment. A former private wealth advisor for Goldman Sachs and Citigroup Private Bank, Beraznik has raised capital from high-net-worths, particularly in the US but also internationally.
For GreenLeaf, the commitment comes after the operating partner tried a debut institutional real estate fund in 2007 only for the vehicle to collapse amid the credit crisis. “It was a frustrating scenario for us,” explained co-founder and chief financial officer Tom Hall.
A multifamily investment, management and development firm since 1998, GreenLeaf will target Class B assets in markets such as Denver, Austin, Salt Lake City, Portland and San Antonio, Hall said. “We want to find product from the 1980s and 1990s where it’s at discount to replacement cost but where there has also been little capital invested over the past five years.”
With 60 employees and around 2,100 existing apartment units, Hall said GreenLeaf and 29th Street hoped to partner with investors or other fund managers to develop a programmatic JV. “There is a perfect storm focused around multifamily currently, as the single family market moves away from homeownership and new households start to form, predominantly with the intention of renting,” Hall said.
He added the $20 million commitment would be used as “significant” co-investment for deals with other partners. “We’re likely to want to invest at least 20 percent into the deals we do,” he said.