Legendary LBO billionaire David Rubenstein sees opportunity in multifamily housing and industrial properties, raising $400 million fund, sources say – Fortune

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An investment firm backed by Carlyle Group Inc. co-founder David Rubenstein and other members of the world’s rich is looking to bolster its US property investments during a downturn in the sector.

Declaration Partners is seeking to raise about $400 million from wealthy individuals and family offices to make investments in areas including multifamily housing and industrial properties for the firm’s second real estate fund, according to people with knowledge of the matter.

The New York-based firm has already raised a portion of that figure with Rubenstein providing an anchor allocation along with other investors from Declaration’s first US real estate fund, which closed in 2022, the people said, asking not to be identified as the details aren’t public. 

Buy/sell, rent/lease residential &
commercials real estate properties.

A representative for Declaration and Rubenstein declined to comment.

Wealthy investors are eager to seize on opportunities from the upheaval in US commercial properties, whose landlords are being squeezed by higher borrowing costs, sinking valuations and bank lending curbs.

About $3.1 trillion of property assets have debt maturing through the end of 2025, and more than three quarters are in the US, according to brokerage Jones Lang LaSalle Inc.

Market Bottom

The US is also furthest along in its price-correction cycle, which is appealing to buyers hoping to catch the bottom. Major players from Morgan Stanley’s real estate platform to Evercore Inc. are looking to capitalize on opportunities that may arise as loans mature and more owners struggle to refinance. 

Declaration invested in Florida and North Carolina sites last year to develop self-storage facilities with 4 Rivers Property Group, the people said. It also completed two deals in late 2023 for residential properties: a 442-unit multifamily property in Pittsburgh and preferred equity financing for a 364-unit near Chicago, the people said. 

Rubenstein, 74, a former White House staffer who became a leveraged-buyout legend, built Carlyle into one of the world’s largest managers of alternative assets. He has a net worth of about $5 billion, according to the Bloomberg Billionaires Index, and also hosts a Bloomberg Television show.

Declaration, which was created in 2017 with an anchor investment from Rubenstein’s family office, initially relied on the billionaire’s money with executives at the firm investing alongside him. It later raised capital from other wealthy individuals on a deal-by-deal basis before deciding to launch a fund.

The company, which also invests in private equity and venture capital, now has more than two-dozen staffers with about nine in its real estate division, led by Declaration co-founder and former JBG Smith Properties executive Todd Rich. It has invested in at least 10 properties since early 2020, including student housing in Pittsburgh, a multifamily development near Atlanta and an office building in Washington.

Participant Capital, an advisory firm for family offices and institutional investors, is assisting on Declaration’s fundraising, the people said. A Participant representative declined to comment.

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