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Origin Launches $250M Fund Targeting Ground-Up Development
Chicago-based Origin Investments is launching Growth Fund IV, a $250-million closed-end capital fund targeted to invest in up to $1 billion of ground-up multifamily developments in high-growth markets across the Southwest and Southeast. The fund will invest as both a general and limited partner alongside sponsors.
“Growth Fund IV has been designed to maximize risk-adjusted returns,” said Origin co-CEO Michael Episcope. “We see the greatest opportunity in ground-up development given changing multifamily housing market conditions.
“There is too much investment capital targeting value-add opportunities today, and it’s pushing pricing on existing deals well above replacement cost,” he continued. “Developing is just a better way to enter these markets because we will have a portfolio of Class A properties at a lower basis than properties 10-15 years older.”
Origin’s analytics show ground-up development can fetch 10% to 30% above replacement cost, while value-add properties trade at or above replacement cost.
- ◦Development
- ◦Financing
