Washington, D.C.-based investment firm Broad Creek Capital completed the first close of its $150 million BCC Multifamily Advantage Fund I — its dedicated U.S. value-add multifamily vehicle — on Nov. 13, according to a press release shared with Multifamily Dive.
With the vehicle, backed by American municipal institutions and family offices across the U.S. and Europe, the firm expects to buy five or six properties, BCC Co-Founder Matt Ruesch told Multifamily Dive. The fund represents a key milestone for the firm, which is now expanding its investment strategy to a broader base of institutional and family office investors.
“The reason we've decided to move forward with launching a fund is because we think that this is a really compelling entry point in the market,” Ruesch said. “We think that we can still go out there and execute the same game plan that we've been running over the past five years.”
Since 2020, Broad Creek Capital has acquired more than 3,800 multifamily units predominantly in the Carolinas, Georgia and Tennessee. It now manages over $500 million in assets, with attainable rental communities that serve the U.S. workforce.
BCC MAF I will target essential-housing communities with a focus on the Southeast and broader Sun Belt. “I think Sun Belt is really our comfort zone,” Ruesch said. “But, we're always open to opportunities in markets where we see the same dynamics at play.”
As part of the close, Broad Creek acquired Loft One35 — a $94 million off-market purchase of a 298-unit, 2018-built property in Uptown Charlotte, North Carolina, purchased below replacement cost with a value-add plan underway. “That was our seed asset,” Ruesch said.
Ruesch said he expects more opportunities to emerge for BCC over the next year as more properties face financial issues.
“We think that there's a really unique entry point in the market to go in and buy assets,” Ruesch said. “We've certainly seen that in our own pipeline, where we've already seen a lot of opportunities to go out and acquire assets that, frankly, are performing quite well, but just have floating rate debt that's maturing. So, the current ownership is just feeling the squeeze.”
In addition, Ruesch believes the sales market has started to “thaw out,” as owners and investors reach a consensus on where interest rates are headed.
“Even if we don't get a cut coming up in the December [Federal Reserve] meeting, I think the consensus is rates are trending down over the next couple quarters,” Ruesch said. “That's just going to set the tone for transactions.”
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