1789 Capital has closed its inaugural Real Estate Development Fund with $1.2 billion in assets under management, giving the investment firm a sizable pool of capital to pursue more than $8 billion of projected real estate development across fast-growing U.S. markets.
The fund is focused primarily on the Sun Belt, targeting Florida, Texas, Tennessee, Georgia, North Carolina, South Carolina and other states where 1789 Capital sees sustained population, employment and business growth.
1789 Capital has selected Easton Street Capital as the fund’s exclusive operating partner.
The partnership combines 1789 Capital’s investment platform with Easton Street’s real estate development and operating experience, including three decades in the industry and more than $700 million of South Florida real estate transactions completed during the past five years.
Rather than separating capital management, development and operations across several outside firms, the new fund is being structured around a more integrated model.
1789 Capital believes bringing investment decisions and operating capabilities closer together can reduce friction, improve the speed of information sharing and eliminate some of the layers of fees and outsourcing associated with conventional institutional real estate structures.
The fund plans to invest across a diversified range of real estate asset classes.
Its strategy includes workforce housing, community revitalization and urban development along with digital infrastructure, manufacturing and other infrastructure-oriented projects.
1789 Capital is also tying the real estate strategy to its broader investment activity in artificial intelligence and digital infrastructure.
The firm believes its experience investing in AI infrastructure can help inform development of powered land and hyperscale data center projects as demand for computing capacity expands.
That creates potential overlap between 1789 Capital’s existing technology-focused investment activity and the physical real estate and infrastructure needed to support AI workloads.
The firm sees the migration of population and businesses toward Sun Belt markets as another central component of the strategy.
1789 Capital said the targeted markets have outpaced the national average in population and employment growth since 2020 and accounted for more than half of net U.S. job creation over that period.
The fund is designed to deploy capital into markets where those demographic and economic shifts are creating demand for new housing, commercial development and infrastructure.
1789 Capital believes the movement accelerated by the COVID-19 period represents a longer-term restructuring of where Americans live, work and build wealth rather than a temporary migration trend.
The fund has already assembled a development pipeline consisting of multi-phase equity investments across the Sun Belt.
In total, 1789 Capital aims to invest in and execute projects representing more than $8 billion of projected capitalization.
The size of the development target means the $1.2 billion vehicle could serve as equity capital within substantially larger projects funded with additional financing and investment partners.
The real estate vehicle also broadens 1789 Capital beyond its existing investment activities and moves the firm toward what it describes as a multi-pillar asset management platform.
1789 Capital positions its broader investment strategy around businesses, technologies and assets it believes can contribute to U.S. economic growth, domestic infrastructure and productivity.
For the real estate strategy, that includes housing serving workers and families as well as infrastructure supporting manufacturing and artificial intelligence.
Easton Street will provide the development and operating capabilities needed to execute those projects.
The firms believe combining institutional capital with an experienced operating platform can allow the fund to identify, underwrite, develop and manage projects at greater scale.
KEY QUOTES:
“1789 Capital has a proven track record of identifying unmet needs in the market, and having the conviction to act on them. That same thinking shaped how we approached real estate.”
“With this development fund, we’re seeking to advance American exceptionalism while also recognizing the post-Covid great migration is a structural reordering of where Americans live, work, and build wealth. We are thrilled to partner with the talented team at Easton Street, for operational support, whose vision fits perfectly into our investment thesis.”
Omeed Malik, Founder and CEO of 1789 Capital
“With the launch of our Real Estate Development Fund, 1789 is quickly expanding into a multi-pillar asset management platform. This new Sun Belt-focused real estate development fund is committed to backing the regions that are driving America’s economic growth.”
“We’re investing where families and businesses are moving and building the future of this country. This is a bet on American strength, American workers, and the momentum of the American South.”
Donald Trump Jr., Partner at 1789 Capital
“In an era where AI is transforming how decisions are made, competitive advantage belongs to organizations that learn the fastest, not those with the biggest balance sheets.”
“Capital and operations have to become one integrated system like the one we’ve built, which provides the structural advantage that compounds over time. We are incredibly excited about the synergies between our two fund strategies, specifically 1789’s AI and digital infrastructure investment track record informing our buildout of powered land and hyperscaler projects.”
Paul Abrahimzadeh, Partner at 1789 Capital
“We developed our business on the belief that great real estate does much more than generate returns. It improves how Americans live and thrive for generations. The 1789 Real Estate Development Fund is a natural extension of that commitment.”
“Together, we’re not only identifying where America is heading, we’re building the places that will define it.”
Cody Crowell, Co-Founder and Managing Partner of Easton Street Capital
