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Law360 (December 8, 2020, 9:42 PM EST) -- Real estate investor Turner Impact Capital said Tuesday it closed a new affordable housing fund with over $350 million in commitments with guidance from Goodwin Procter LLP, clearing the path for $1.25 billion in investment potential.
Turner Multifamily Impact Fund II will acquire and manage up to 10,000 housing units and has already acquired seven multifamily communities, the announcement said. The fund was unveiled in 2019 and can further boost its investment capabilities by borrowing against the $350 million in committed capital.
California-headquartered Turner Impact Capital bills itself as the largest private equity real estate firm that exclusively focuses on social impact. The firm said its investments focus on residents who may not qualify for subsidized housing but still struggle to find affordable housing in their areas.
CEO Bobby Turner noted that the pandemic will likely exacerbate current issues with housing affordability.
"The pandemic and resulting financial crisis have highlighted just how fragile our most vulnerable populations are to unforeseen emergencies and underscored the critical and growing demand for affordable workforce housing in the U.S.," Turner said in the announcement Tuesday.
Rather than making pricey upgrades and then raising rents, Turner Impact said it seeks to lower costs in part by targeting resident satisfaction, which reduces expensive vacancies and turnover. The firm also partners with local community groups on initiatives such as health services, employment assistance and homework help, according to the announcement.
"We're proud that our apartment communities are meeting the needs of so many people, especially during this public health crisis, and we are looking to significantly expand our portfolio in high-demand areas throughout the country," Gee Kim, president of the firm's multifamily housing division, said in the announcement.
The fund builds on the theme of its predecessor, Turner Multifamily Impact Fund I, which deployed nearly $700 million and acquired roughly 7,840 workforce housing units, the announcement said.
The Pershing Square Foundation, an investor in the latest fund, praised Turner Impact's strategy and mission.
"Bobby Turner and his team have demonstrated an ability to create a sustainable and scalable for-profit solution to address the current affordable housing crisis," foundation trustee Bill Ackman said in the announcement. "In the wake of this pandemic, continuing to preserve affordable, high-quality housing for families with close proximity to their workplaces, schools, and other community resources could not be more important."
Turner Impact is represented by a Goodwin Procter LLP funds team including Mandee Gruen, Michelle Kim, Christina Erickson, Hanna Lipman and Elisabeth Teixeira de Mattos, with tax counsel provided by Kelsey Lemaster and Benjamin Gossels.
--Additional reporting by Benjamin Horney. Editing by Janice Carter Brown.
Update: this story has been updated with counsel information for the fund.
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