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3/18/22
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Interstate Equities Corporation (IEC) has closed its fifth institutional fund, “IEC Institutional Fund V,” with $445 mil in equity commitments. The fund, which will invest in acquiring, renovating, and repositioning value-add multifamily properties across California and Washington, follows the firm’s closing of its “IEC Institutional Fund IV” in 2018 that garnered $300 million in equity commitments.
According to Marshall Boyd, Co-President and Chief Investment Officer of IEC, the company was able to close Fund V oversubscribed after seeking a waiver to surpass the initial hard cap of $400 mil just seven months after the funds’ initial launch and without using a banker in the process. IEC had a 98% reinvestment rate from “IEC Institutional Fund IV” institutional investors and a few special new investors which each add something unique in terms of causes they serve and deep investment experience.
IEC invests in value-add multifamily communities in California and Washington with an emphasis on workforce communities and takes a vertically integrated approach across its portfolio, which includes 19 cities. The company targets dated multifamily apartment properties and transforms them into modernized, boutique-style assets at attractive price points.
“We take a multipronged approach to our investment strategy that allows us to capture both ends of the value-add multifamily market,” says Boyd. “We specialize in renovating and repositioning value-add assets in durable infill markets throughout California and Washington – specifically the Bay Area, Orange County, Greater Los Angeles, San Diego, and Seattle – where there is a tremendous opportunity for value creation and a lack of housing. We also target larger-scale institutional-quality assets that require a more strategic approach to renovation.”
IEC acquired more than $700 mil of apartment assets in the past 12 months. Most recently, this included a 146-unit community in Mission Valley from families who owned the asset for decades, and The Bryant, a 400-unit community in Yorba Linda. Both properties reflect strong value-add opportunities in markets with robust fundamentals and are representative of IEC’s strategy of acquiring assets that are positioned for long-term growth.
Goodwin Proctor LLP provided legal advice related to the fundraise.
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