Embrey is planning on building a $500 million portfolio of build-to-rent communities in the Sun Belt region after closing one of its funds at $160 million.
The Embrey Horizontal Living Fund I is a discretionary equity fund that first opened to investors in the third quarter of 2021, Garrett Karam, CIO at Embrey, told Multi-Housing News. The fund was led by Fortune 100 institutional investors and saw a lot of interest from new investors, who accounted for approximately 70 percent of the fund commitments, Karam told MHN.
The fund will focus on developing build-to-rent communities that are typically between 200 and 300 units. The fund’s communities will feature duplexes and townhomes in one-, two- and three-bedroom layouts, which will be built with individual yards and private garages. The communities’ amenities are expected to include pools, clubhouses, fitness centers, dog parks and full-service management.
Karam told MHN that Embrey already closed on the fund’s first project in New Braunfels, Texas, last quarter, and is expecting to start construction on it next month. As for the rest of the projects, Embrey is planning to start construction on the other communities over the next two years, anticipating to fully deploy all of the $160 million in equity within approximately 18 months, Karam told MHN.
EXPANDING TO OTHER SUNBELT MARKETS
While the fund’s first project is located in Texas, Embrey is looking to expand the fund’s footprint to other Sun Belt markets. Karam told MHN that the fund will likely include additional markets like Nashville, Tenn., Orlando, Fla., and Charlotte, N.C.
Karam said in prepared remarks that the Horizontal Living Fund I was a major step for the company’s goal of expanding its fund platform, adding that Embrey is expecting to scale its fund platform in the coming years. The company was created in 1974 and has since developed nearly 43,000 units and has more than 4,000 currently under construction. Embrey’s development portfolio also includes a 252-unit community in Gruene, Texas, that it acquired the land for in February.