CityView Raises $55 Million for U.S. Southwest Apartments
CityView, the real estate investment firm founded by Henry Cisneros, raised $55 million from three teacher pension funds to buy and renovate apartment buildings in the U.S. Southwest.
An initial fundraising round was completed today, Cisneros, former secretary of the U.S. Department of Housing and Urban Development and executive chairman of Los Angeles-based CityView, said in a telephone interview. The fund has about $165 million including debt, which will be used to acquire and improve existing multifamily buildings in Texas and Colorado, states with strong energy employment, and Arizona, where jobs have increased for four straight months, he said.
“We’re continuing to raise capital,” Cisneros said. “This first closing was just to get the process going and take advantage of market opportunities immediately.”
Asking apartment rents rose 6.6 percent in Denver (SPCSDEN), 4.4 percent in Dallas and 0.8 percent in Phoenix in the first quarter from a year earlier, continuing a trend that began in 2010, according to property-data firm RealFacts Inc. CityView plans to buy buildings in each of those cities. Demand for rental units nationwide is the strongest in a generation because of record home seizures, stiffer lending standards and a rising number of young adults forming households.
“A lot of people have been renting due to foreclosures, and hiring has gotten better,” Nick Grotjahn, spokesman for Novato, California-based RealFacts, said in a telephone interview. “As occupancies have increased, so have rents.”
Lincoln Property Co., based in Dallas, will manage the apartment buildings for CityView. The fund also plans to buy properties in the Texas cities of Houston, Austin and San Antonio, where Cisneros served four terms as mayor.
The fund’s contributors are the Public School Teachers’ Pension and Retirement Fund of Chicago, the Teachers’ Retirement System of the State of Illinois and the Teacher Retirement System of Texas, all first-time CityView investors, Cisneros said.
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