- Cortland raised $1.5B, surpassing its original $1B target due to strong interest from new and legacy investors, including 80% of commitments from institutional firms.
- The firm will target value-add multifamily investments in the Sunbelt, despite challenges like recent rent declines in the region.
- Cortland has already committed nearly 30% of funds raised, capitalizing on discount prices and a stabilizing multifamily market ahead of September.
Atlanta-based multifamily real estate firm Cortland successfully raised $1.5B through its latest private equity funding round, as reported in Globest.
Fundraising Details
The Cortland Enhanced Value Fund initially aimed to raise $1B, but oversubscription from new and legacy investors pushed the total to $1.5B.
Around 80% of commitments came from institutional investors, with about a quarter of the funds from foreign sources.
Cortland manages over 80K homes across 250-plus apartment communities nationwide. With offices in key cities like Denver, Houston, Orlando, Phoenix, and Charlotte, the firm is well-positioned to capitalize on growth opportunities in the Sunbelt and beyond.
Navigating Challenges
Cortland’s president of investment management, Jason Kern, noted the firm has patiently deployed capital in the challenging acquisition environment.
However, with capital markets improving and asset prices becoming more favorable, the firm is now actively investing. Fund VI is already nearly 30% committed, indicating strong investor confidence in Cortland’s strategy.
Eyes on The Prize
Cortland is targeting investments in the Sunbelt region, a popular area for multifamily growth despite recent challenges.
According to CoStar Group, multifamily absorption rates rose from 118K units in Q1 to 166K units in Q2, signaling a stabilizing market.
However, the Sunbelt faces hurdles, with all 10 worst-performing markets for rent growth located in the region. Austin, for example, saw rents drop 5.7% in Q2.
Looking Ahead
As Cortland continues to seek opportunities in the Sunbelt, anticipated interest rate cuts from the Federal Reserve starting as early as September could provide additional momentum.
Analysts at KPG funds estimate a 200 bps reduction over the next year, which could spur greater activity in the CRE market and benefit multifamily investors like Cortland.
