S2 Capital has closed on the one of the largest private real estate funds of the year.
Launched in February with a goal of $250 million, S2 Multifamily Value-Add Fund I closed at $400 million in investor and co-invest commitments. It was the only first time fund this year to be launched and closed in 2022, according to PERE, and is the second largest so far this year.
“We are grateful for the support of our investors in raising our first fund, especially through the challenging financial markets of recent months,” said CEO Scott Everett.
Everett says S2 transitioned to third-party fundraising in an effort to bring office and retail investors over to the multifamily market. About 60 percent of the fund was built from support of S2’s existing investor relationships, while the remaining 40 percent was raised from new relationships. The new investors apparently leaned on the existing investors for their due diligence, which helped speed up the process, says Everrett.
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The Dallas-based investor currently has $6 billion of multifamily assets under management and is one of the most active multifamily investors in the country.
The company focuses on Class B multifamily assets in the Sun Belt— primarily Texas, Florida, Georgia and the Carolinas. In North Texas alone, the investor has a total of 4,455 units across 11 properties.
In July, S2 surpassed Blackstone in as the most active buyer of multifamily properties in the DFW area with the purchase of a major multifamily portfolio stretching across the DFW and Houston metros, totaling 4,445 units in 14 buildings.
“The run up in mortgage rates for the single-family market has exacerbated a broader affordability issue leaving a lot of people looking to rent as the more affordable option,” said Ryan Everett, VP of Acquisitions at S2, in a statement at the time.
— Maddy Sperling