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Mesirow Financial Raises $567 Million for Third Real Estate Value Fund

Fund Set To Acquire Up to $1.6 Billion in Multifamily Housing for Upgrades
September 12, 2018
Mesirow Financial Real Estate Value Fund III's most recent buy in May was the 293-unit Landing Double Creek in Austin for $42.5 million.

Mesirow Financial has raised $567 million for its third real estate value fund, pulling in about 30 institutional investors from across the U.S., Europe and Australia as they seek double-digit returns on their investment in upgrading properties.

Launched in March 2017, the fund was targeting raising $750 million in capital in a crowded field of value-add funds, pools of investments that focus on properties they can reposition or upgrade to increase their return on investment.

Seventy value-added funds have held final closings so far this year, raising about $10.8 billion, according to Preqin, a provider of private equity data. These types of investment have proven popular in private equity circles because returns can top 12 percent annually.

The amount raised exceeds its previous fund close of $542 million. Fund III positions Chicago-based Mesirow to acquire more than $1.6 billion in real estate assets.

Mesirow Financial Real Estate Value Fund III is focused on the U.S. multifamily sector with a secondary focus on the student-housing sector.

Assets sought are typically diversified across suburban and urban properties and U.S. geographic regions, as well as by construction type and vintage year. The properties are generally in close proximity to public transit and are located in areas with significant differentials between costs-to-own and costs-to-rent.

The strategy leverages the firms "relationships in the market," Alasdair Cripps, chief executive and co-chief investment officer for Mesirow Financial's Real Estate - Direct, said in a statement announcing the close. "As stewards of capital, we will continue to be opportunistic and disciplined as we evaluate opportunities."

Over the past five years, Mesirow Financial's Real Estate - Direct team has raised more than $1.5 billion in equity and has invested in nearly 13,000 multifamily units in 23 cities nationwide.

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