Financial services firm Mesirow has raised more than $1 billion for a fund to invest in apartment buildings in major markets, real estate it seeks to buy for less than it would cost to build today.
The Chicago-based firm said it closed the Mesirow Financial Real Estate Value Fund V after securing $1.245 billion in investor commitments it plans to invest in multifamily properties in the top 25 to 30 U.S. markets. That’s a 66% increase in commitments over Fund IV, according to the company.
The fund closed amid concerns about the economy, including continued higher borrowing costs and more recent worries about the effects of President Donald Trump’s economic policies. Mesirow joins other firms — such as Brookfield Asset Management, which recently closed a $6 billion real estate fund — in raising money after two years of sluggish property sales because of high interest rates.
“With Fund V, we remain focused on multifamily assets in select major U.S. metropolitan markets, building on a platform with more than $8.5 billion in assets under management," said Alasdair Cripps, CEO and chief investment officer of Mesirow Institutional Real Estate Direct, in a statement announcing the closing of the fund.
He added that "we are especially grateful that new and existing investors have entrusted us with their capital amid ongoing market uncertainty” at a time when the firm is expanding a platform it described as employing "value-added, risk-balanced multifamily real estate strategies.”
Mesirow said it likes the long-term outlook for investing in apartments, including continued high demand from renters.
The statement did not identify specific markets to be targeted, but Mesirow’s recent acquisitions have included a 410-unit complex near San Diego, a 276-unit complex in Denver and a 412-unit complex near Washington, D.C.
“Our investment discipline is both proven and cycle-tested,” Cripps said in the statement. “Fund V will continue our focus on repositioning underperforming Class A multifamily assets, acquired at discounts to replacement cost, in high-growth markets where barriers to entry reduce the risk of oversupply. This strategic approach has underpinned our track record of success and remains central to our value creation model.”
Mesirow is headquartered in a 45-story tower at 353 N. Clark St. in Chicago, which the firm helped develop but no longer owns. The company early this year extended its lease there through 2036 but reduced its space to about 110,000 square feet from about 165,000 square feet previously.