Nearly three years after closing its first real estate fund, Boundary Cos. has raised more than twice as much money for its follow-up.
Boundary Cos. principals Ryan Fowler, John Wilkinson and Alex Caffrey.
The Bethesda-based real estate firm closed its vehicle, called the Rendezvous Fund, with the ability to leverage up to $750M in investments, Boundary Cos. Managing Partner John Wilkinson told Bisnow. He didn’t disclose the amount of money raised.
The fund is targeting the residential, industrial, self-storage and data center real estate sectors, Wilkinson said. The first fund, which closed in March 2021, invested $300M in 1.8M SF of properties across those same asset classes.
“We love these asset classes because of the durability of the cash flows,” Wilkinson said in an interview Monday, adding that the properties have been able to withstand the rising interest rates and other economic headwinds of the last two years.
“All asset classes have been affected to some degree, but these certainly less than others,” he said. “They’re operating well.”
Boundary made the investments within a year of closing the first fund, and it has since sold 30% of the assets, Wilkinson said. Those sales included the June 2022 disposition of a six-property self-storage portfolio in Virginia for $90M, twice what it paid for the properties. The sales allowed it to pay back investors 140% of their contributions, Wilkinson said.
“We were in the right asset classes at the right time in the cycle,” he said.
Boundary was founded in 2014 and made investments on a deal-by-deal basis before raising its first fund. Wilkinson previously worked at The JBG Cos. and The Meridian Group before founding Boundary. The firm’s other principals, Ryan Fowler and Alex Caffrey, previously worked at JBG and the Carlyle Group, respectively.
Around 90% of the investors from the first fund contributed again for the second fund, Wilkinson said. Those investors were primarily institutions and high net worth individuals.
Boundary Cos. hasn’t closed any investments with its second fund yet, but he said it has deals in the pipeline and expects to begin closing in the second or third quarter. The company’s investments include a mix of value-add acquisitions and ground-up developments.
“Development is certainly more challenging given where debt markets are,” Wilkinson said. “That being said, we still like development in certain locations. In residential, it’s all about buying land at the right basis.”
In April, Boundary and Couloir Ventures started construction on a 73-unit build-to-rent townhouse project in Waldorf, Maryland. In May, Boundary acquired 16 industrial assets in Northern Virginia’s Prince William County with plans to redevelop them into data centers as the county becomes a hotbed for that booming sector.
“There are certainly tailwinds supporting the data center asset class,” Wilkinson said.