American South Fund Mgmt. Raises $174M for Second Affordable Housing Fund

American South Fund Management, a strategic collaboration between SDS Capital Group and Vintage Realty, has successfully concluded the closing of American South Real Estate Fund II with an impressive $174 million in committed funds. This momentous development sets the stage for substantial investments in affordable housing projects throughout the Southern United States.

The size of this fund is a testament to its significance, dwarfing its predecessor, ASREF I, by nearly threefold. Notably, this accomplishment includes an influential contribution of $50 million from funds managed by GCM Grosvenor - a pivotal milestone as it marks the first-time public pension capital has been invested in ASFM's funds. Managing emerging manager capital in real estate for over a decade, GCM Grosvenor has shifted the paradigm by investing in ASREF II on behalf of five public pension plan investors. Remarkably, GCM currently oversees an extensive real estate emerging manager program valued at more than $5 billion.

Deborah La Franchi, accomplished managing partner of AFSM and founder and CEO of SDS Capital Group, expressed her enthusiasm about this groundbreaking collaboration. La Franchi attested that, without the remarkable GCM Grosvenor platform, securing public pension fund capital would not have been possible for ASREF. This platform, through its skillful suballocation and bundling of pension fund capital, brings forth scaled amounts tailored to the specific requirements of emerging managers like ASFM.

GCM Grosvenor Identifies Promising Partnerships with ASREF II Investment

GCM Grosvenor's managing director, Peter Braffman, recently highlighted the company's focus on identifying firms that offer compelling strategic partnerships. In line with this pursuit, the ASREF II investment has emerged as a significant opportunity for the organization.

The ASREF II funds primarily source their remaining equity investments from financial institutions. However, the funds also extend preferred equity and equity financing to real estate sponsors operating within ten Southern states.

These states include Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Texas. The ASREF I and II funds have invested a total of $106 million across 22 projects, facilitating the creation of 5,147 housing units. Notably, 81 percent of these units are affordable to families with incomes below 80 percent of the area median income.

Elevating Communities with Affordable Housing

The success of ASREF II speaks volumes about the innovative investment strategy employed by ASFM. As the managing partner and CEO of Vintage Realty Co., David Alexander emphasizes their commitment to financing affordable housing units in communities where the demand is high but the supply remains stagnant.

In a recent acquisition, co-funded by ASFM and Elizabeth Property Group, a portfolio of six Texas LIHTC properties was obtained from an undisclosed seller. These properties include the 336-unit Willow Green in Houston, the 232-unit Woodglen Park I & II in Duncanville, the 232-unit Pine Club in Beaumont, the 232-unit Ridgewood West in Huntsville, the 232-unit Saddlewood Club in Bryan, and the 180-unit Tealwood Place in Wichita. With the assistance of ASREF II, ASFM and Elizabeth Property Group plan to make renovations while ensuring the units remain affordable at 60 percent of the Area Median Income (AMI) until 2042 and 2043.

Not stopping at acquisitions, ASREF I also played a crucial role in funding the construction of Preserve at Ridgeville, a 240-unit community located in Ridgeville, S.C. Developed by Portage Real Estate, this vibrant community in the suburbs of North Charleston offers 50 percent of its units at affordable rates, set at 80 percent or less of the AMI.