Dallas-based national real estate investment manager S2 Capital has closed its S2 Real Estate Fund II LP, with total capital commitments of $373 million, exceeding fund commitments of its inaugural fund, S2 Multifamily Value-Add Fund I LP.

S2 said that Fund II is actively executing investments aligned with its strategy of
“repositioning underperforming assets with targeted renovations and improving operational efficiencies, with a focus on long-term value creation.”

“We’re incredibly grateful for the continued support from our existing limited partners and are equally excited to welcome a diverse group of new institutional investors,” S2 founder and CEO Scott Everett said in a statement. “Surpassing the capital raised in Fund I highlights investor trust in our team’s ability to identify and execute multifamily investments in high-growth markets.”

S2 said that Fund II received broad institutional backing from a mix of U.S. and European investors including global asset managers, public pension, multi-family offices, and sophisticated wealth management firms, further demonstrating the platform’s global appeal.

The firm said that consistent with S2’s established, value-add investment thesis, Fund II is aimed at distressed multifamily opportunities across high-growth markets including Texas, Arizona, Colorado, Florida, Tennessee, Georgia, and the Carolinas. S2 said that more than 60% of Fund II already has been deployed across 14 assets in nine markets, allowing the firm to capitalize quickly on opportunities that exist due to the recent market dislocation.

“The current environment has created exceptional opportunities for disciplined, well-capitalized investors,” said Patrick Connell, head of capital formation & investor relations at S2 Capital. “Higher interest rates and elevated supply have introduced stress into the multifamily sector, and we’re leveraging our extensive relationships and operating capabilities to create value and drive performance.”

Founded in 2012, S2 Capital has acquired more than 50,000 units across high-growth U.S. markets.

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