Thompson Thrift is asking accredited investors for as much as $230 million to build apartments in five states, on the argument that the multifamily development cycle has already bottomed.
The Indianapolis-based developer announced the launch of Thompson Thrift 2027 Multifamily Development, LP on Sept. 24. It is the firm’s ninth multi-project development partnership, and it is seeking roughly $200 million to $230 million in total capital commitments to build a portfolio of Class A communities.
Six development sites have been identified, spread across Colorado, Kentucky, Montana, Arizona and Nevada. One of them would be the company’s first multifamily project in Montana. Investors commit once and take exposure to all six rather than underwriting deals individually.
The cycle call
The timing is the substance of the announcement, and the company is explicit about it.
“After four years of correction in the multifamily market, we believe we are clearly entering the next cycle,” said Paul Thrift, chief executive and co-founder of Thompson Thrift Development. “New starts have been declining for several years, the record wave of new supply has largely been absorbed, and we are beginning to see improvement in rents and concessions, alongside continued strong demand and healthy occupancy. We believe these fundamentals create a compelling window for new development in the right markets.”
That is a developer’s read on its own market, and it is worth setting against what other measures show. Multifamily developers themselves were not describing conditions that way three months ago: NAHB’s index of multifamily developer sentiment weakened in the second quarter. And overall construction activity has been erratic rather than recovering in a straight line, with total construction starts falling 24.8% in August as a July surge of megaprojects unwound.
Where the two views converge is on timing. Capital raised now funds sites that will not deliver apartments for years, by which point the supply wave the company says has been absorbed would be further behind the market. Committing capital while competitors are still digesting deliveries is the standard argument for developing into a trough, and it is the one Thompson Thrift is making.
The firm frames its market selection as tactical rather than regional. “One of the advantages of our business model is the ability to move in and out of markets across the country and deploy capital where we believe the fundamentals create the greatest opportunity at any given point,” said Josh Purvis, managing partner of Thompson Thrift Residential. The five states in the 2027 partnership continue a westward tilt; the company opened an expanded Denver office in August and said on Sept. 14 that a project in Ingleside, S.C., had taken its footprint to 25 states
Terms and track record
The partnership is offered only to accredited investors under Rule 506(c) of Regulation D, which permits general solicitation but requires the sponsor to verify each investor’s accredited status. Securities are being offered through North Capital Private Securities, a member of FINRA and SIPC. The company’s own disclosure language is blunt about the risk: private offerings of this kind are “speculative, illiquid, and may result in a complete loss of capital.”
Thompson Thrift is closing its 40th year. It says it has invested more than $7.3 billion since its founding, employs more than 660 people, and has started more than 27,000 residential units while deploying about $2 billion of equity capital since 2010.
“We are especially grateful for the equity partners who continue to place their trust in us,” said JR Plyler, the company’s chief investment officer, describing the ninth partnership as a reflection of long-standing relationships and “our confidence in the opportunity ahead.”
The raise lands in a market where private capital has been moving back toward apartments in increments rather than waves. Neology Group closed a $175 million raise this year to expand beyond South Florida multifamily. Whether $230 million funds against a backdrop of rising interest rates will be the practical test of Thompson Thrift’s cycle call, and the company did not say how much has been committed so far.
