Declaration Partners, an investment firm with backing from renowned billionaire David Rubenstein, is strategically positioning itself to fortify its US property investments during the ongoing downturn in the sector. Rubenstein, who is one of three billionaire founders of private equity firm Carlyle Group, is joined by other affluent individuals in this ongoing venture.
Based in New York, Declaration Partners is actively seeking to raise approximately $400 million from wealthy individuals and family offices. This capital infusion will fuel investments across various sectors, including multifamily housing and industrial properties, constituting the firm’s second real estate fund, according to sources familiar with the matter who spoke on the condition of anonymity.
Furthermore, sources also revealed that Declaration Partners has already secured a portion of the targeted funds, with Rubenstein providing an anchor allocation. This follows the success of the firm's first US real estate fund, which closed in 2022. Details of the current fundraising efforts remain undisclosed, and representatives for both Declaration Partners and Rubenstein have declined to comment.
The move comes as wealthy investors are keenly observing opportunities arising from the turbulence in the US commercial property market. Landlords are grappling with higher borrowing costs, sinking property valuations, and tightening bank lending regulations. A staggering $3 trillion of property assets are set to mature through the end of 2025, with over three-quarters concentrated in the US, as reported by brokerage firm Jones Lang LaSalle Inc.
The United States, being the furthest along in its price-correction cycle, presents an attractive prospect for buyers looking to capitalize on the market bottom. Major players such as Morgan Stanley's real estate platform and Evercore Inc. are also eyeing opportunities that may arise as loans mature and property owners encounter challenges in refinancing.
Declaration Partners has demonstrated its commitment to strategic investments, having engaged in projects such as self-storage facility development in Florida and North Carolina in collaboration with 4 Rivers Property Group. Additionally, the firm completed two residential property deals in late 2023, acquiring a 442-unit multifamily property in Pittsburgh and providing preferred equity financing for a 364-unit property near Chicago.
Rubenstein, a former White House staffer turned leveraged-buyout legend, has a net worth of approximately $5 billion, according to the Bloomberg Billionaires Index. Rubenstein, who hosts a Bloomberg Television show, played a pivotal role in transforming Carlyle Group into one of the world's largest managers of alternative assets.
Declaration Partners, established in 2017 with an anchor investment from Rubenstein's family office, initially relied on the billionaire's funding. Over time, it diversified its capital base, attracting investments from other wealthy individuals before deciding to launch its current fund. The firm, led by co-founder Todd Rich, has a diversified portfolio and has invested in at least 10 properties since early 2020, spanning various real estate sectors.
Assisting in Declaration's fundraising efforts is Participant Capital, an advisory firm for family offices and institutional investors. The firm's involvement underscores the strategic and collaborative approach taken by Declaration Partners as it navigates the complex landscape of real estate investments.
