A discussion of 37th Parallel's Fund 2, covering its investment strategy, geographic focus, and fundraising goals. The speakers address how interest rates affect real estate opportunities and timing in the current market.
Let's talk a little bit about Fund 2. Can you talk with us a little bit about where Fund 2 is at right now?
Fund 2 is currently invested in two projects. It's in Grays harbor at Lake Norman, which is a Charlotte deal.
It's also in Bridgehead Trade Winds, which is an Austin project that we own.
So it's sort of that one started. It's funny, both of our funds started at, I think, the worst possible time. Fund one started in 19, right before COVID but it filled at 40 million. And then fund two started right before the interest rate cycle, so it's currently at 14 million and has invested only.
About 11 million of it. But we expect that to accelerate as interest rates start to come back down.
And what's the goal to raise for fund two?
40 to 80.
Okay. And what's the date on when you expect that to close?
We are likely going to close that end of next year. So we may or may not hit target on that. But we don't want to extend it too long long because fundraising for everyone.
Basically slowed down dramatically with the interest rate cycle. And we totally understand that. Someone says, okay, I can get 5% risk free in the bond market. Why would I put it in real estate?
But that's going to change.
And when that does, if you wait.
Too long, you're going to be staring.
At income funds that have sunk a.
Lot more than you wanted and you.
Might miss some of the timing opportunity that's currently coming up in multifamily.
How many states do you expect Fund two to be investing in? All five of those that you mentioned earlier.
North Carolina, South Carolina, Georgia, Texas. At least those four. We'll see about Northern.
We'll see about Virginia.
I mean, we live in Richmond, Virginia.
It's home for us. But it's a demographically sleepier town. And Northern Virginia and Fredericksburg are fantastic. It's just whether their population growth continues, depending on what happens with the next president and how hiring goes in the government side, because that really drives a lot of that.
The hosts of the White Coat Investor are not licensed accountants, attorneys or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.
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