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Multifamily value-add fund, with a focus on Sun Belt assets, closes at $1.04 billion.
American Landmark Apartments, based in Tampa, Florida, has closed American Landmark Fund IV, exceeding its target of $975 million with a final fund size of $1.04 billion.
This is the owner-operator’s fourth closed-end value-add real estate fund focused on the acquisition, renovation, and management of multifamily communities in 15 key markets—from Jacksonville, Florida, and Charlotte, North Carolina, to Nashville, Tennessee, and Dallas—in the Sun Belt. The fund generated demand from existing and new investors, receiving commitments from high-quality, domestic, and foreign institutions, including sovereign wealth funds, pension funds, endowments, and insurance companies.
While 2023 was a challenging year for fundraising, American Landmark executives say multifamily remains attractive to investors.
“We’re always worried about the changes in the economic climate on both the macro and micro basis, but we still feel superior risk-adjusted returns for investors are found in the multifamily space and, in particular, the Sun Belt,” says CEO Joe Lubeck.
David Tepperman, global head of capital markets at American Landmark, says Fund IV was appealing to investors.
“Our target markets are across the Sun Belt, and that’s where you’re seeing most of the population in-migration and job growth. You continue to read about large, national employers relocating or opening new offices in our markets. And this is critical because a key metric we focus on is ‘new jobs to new apartments,’” says Tepperman. “We’ve also been doing this for 27 years. This is all we do—multifamily in these markets. Investors really like that because they’re not worried we’re looking to the left or to the right, we’re only looking at multifamily in the same markets with strong fundamentals. That’s our expertise.”
American Landmark has invested about 50% of the fund to date, acquiring 28 assets across its Sun Belt markets.
According to Lubeck, the firm will continue to look at its key markets for acquisitions.
“We feel like we have boots on the ground and a competitive advantage in the markets we’re in,” he says. “And we do feel that the multifamily market is going to rebalance both in terms of pricing and interest rates. We will be using our utmost discretion as we continue to invest in the portfolio.”
He notes that while there is a lot of equity on the sidelines looking to invest in multifamily, a lot of newcomers to the value-add market will be closed out because of the tightened lending environment. He also expects to see some distress in the market, largely from firms that were overleveraged and paid too much for assets over the past five to seven years.
“We will use dry powder to seek out opportunistic acquisitions,” says Lubeck.
For American Landmark, which owns and manages 35,000 units, its goal is to add value through management, renovation, upgrades, and cost controls.
Over its history, the firm has done thousands of resident-in-place renovations. Interior renovations include quartz countertops, updated cabinetry, stainless steel appliances, and upgraded light and plumbing fixtures.
For common areas, it focuses on adding Class A amenities, such as pickleball courts, pet spas, package systems, and 100% high-speed Wi-Fi penetration, to all its properties.
“Residents are extremely pleased with our standard upgrades,” Lubeck explains. “We upgrade the services, amenities, and units to drive us to reasonable increases in rents and increased resident retention.”
Looking ahead to the coming year, he says operations will be the No. 1 priority. “Our focus is going to be on fundamentals—great service, great assets, fair pricing, great maintenance, and solid operations.”
He says the firm also wants to continue upgrading its environmental, social, and governance efforts, including water conservation, waste management, and solar, as well as expand its unique programs, such as its Artist in Residence and tenant engagement.
