DECEMBER 7, 2012

Carroll Organization holds final close for second fund

by Sara Kassabian

Atlanta-based real estate investment firm Carroll Organization has held a $30 million final close for its Carroll Co-Invest Fund II and sidecar fund for joint venture partners. With its institutional joint venture partners the fund will have approximately $200 million in equity.

Carroll Co-Invest Fund II is part of a core-plus/value-added multifamily fund series that invests in Southeast United States and Texas.

“We like the job and population growth that is occurring in [the Southeast] areas,” says Josh Champion, president of investments. “The REITs and larger institutions are selling out in most of these Southeast and Texas cities, and putting their money in gateway cities such as New York City; Washington, D.C.; and San Francisco. It’s creating a good return environment for capital in these Southeast and Texas cities.”

Carroll Co-Invest Fund II has started to invest its capital. It has completed two acquisitions. In November it acquired the Camden Sweetwater Apartments located in Lawrenceville, Ga., and in October it purchased Villas at Edgewater Apartments, located in Webster, Texas. The sales prices were not disclosed. A third deal is expected to be completed this month, and the firm aims to be fully invested by mid-2013.

“The debt [market] is very attractive,” says Champion. “It’s where we find good investments that are below replacement costs so that we can add value through our management company, and through physical renovations. We want to invest money and take advantage of the attractive financing in the market. “

Fund II’s predecessor, Carroll Co-Invest Fund I, is fully invested. Fund I mixed with capital from sidecar joint venture partners gave Carroll Organization approximately $50 million in equity to invest. The vehicle completed its fifth multifamily property investment in August. It purchased the Archstone Tech Ridge community in Austin. 

In other news, Carroll Organization has plans to launch its third fund for the Carroll Co-Invest Fund series. A launch date was not disclosed; however, Carroll Co-Invest Fund III will follow the same strategy as its predecessors but will be investing in West Coast markets. 

Champion adds, “Our investors and partners want to seek out new markets for investment potential.”  

Carroll Organization was founded in 2004 and manages more than 10,000 multifamily units in the United States. The company’s current investment portfolio is valued at more than $250 million.

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