Waterton Starts Capital Raise on New Residential Fund With Bay Area in Focus

By Jon Peterson

Chicago-based Waterton has kicked off the marketing process for its next commingled fund—Waterton Residential Property Venture XIV—according to sources familiar with the fund details and its initiative.

Waterton declined to comment when contacted for this story.

The San Francisco Bay Area would likely to be one of the fund’s targeted markets, especially since Waterton has acquired apartment complexes in the region over the last two years. Last October, the manager paid $62.9 million to purchase the 147-unit Aventine complex in Hercules, according to public records. This property is located at 1375 Sycamore Avenue.

In December 2018, the investor bought the 260-unit Bay Village Apartments in Vallejo for $64.15 million, as stated in public records. This property is located at 1107 Porter Street, and it was acquired for Waterton Residential Property Venture XIII. The properties in Hercules and Vallejo are the only two assets that the manager currently owns in the San Francisco region, according to its website.

The fund manager had a final closing on its previous fund, Venture XIII, in April 2018. The total capital commitments to the fund were $910 million, as stated by sources that track commingled fund capital raises on a global basis. Waterton had established a targeted capital raise for the fund of $750 million and a hard cap of $1 billion.

It is not clear at this time what will be the amount targeted for the capital raise for Property Venture XIV. One of the initial commitments placed into the new commingled fund is a $50 million commitment issued by the Kansas Public Employees Retirement System, according to information provided by the pension fund.

The new commingled fund has a value-add investment strategy, and it will be focused on acquiring existing assets and employing several strategies to drive property cash flow over the life of ownership. The manager has a nationwide investment strategy, so the fund will likely consider opportunities across the country. Some of those other markets besides San Francisco will likely include Southern California, Virginia and Chicago.

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