Borrower profile: Targa aims for workforce housing expansion, new banking relationships

Moss Family Office subsidiary targets Texas, Florida housing projects with first $40m fund.

Targa 1 closed its first fundraise on $40 million and has its sights set on its next fundraise and cohort of new financier relationships heading into the back half of 2022.

The Fort Lauderdale, Florida-based private real estate investment fund completed capital raising efforts on July 7 and has already used its inaugural strategy for three construction projects and one acquisition in both Florida and Texas.

Chad Moss, principal at Targa and CEO of its parent company Moss Family Office Worldwide, said the firm has put an estimated $25 million of the vehicle to use at present and plans to start raising funds for the next iteration of the Targa strategy soon, with a target of $80 million.

Moss said the firm plans to expand its relationships with banks and related lending partners as part of Targa’s ongoing business strategy. David Greer, the fund manager and co-founder of Targa, underwrites the firm’s deals and serves as a point of connection with the banking community specifically, Moss noted.

Targa’s capital needs fluctuate according to each project’s requirements, Moss said, adding that the firm has put together financing for projects needing $50 million to more than $300 million of capital to date, with room for deals of all sizes in and outside the range.

Targa can also participate within the capital stack when it comes to solidifying deals, including issuing construction loans, providing some preferred equity or facilitating developer equity for workforce housing projects. Moss said the firm’s focus on workforce housing investments in select Sunbelt markets has been bolstered by the general population migration trend from Northern US states to Southern US states, noting the current flow is the tip of the spear in his view.

Moss said while C-suite professionals have been relocating to places such as South Florida, their workers are still set to follow once leases in their former base are broken or expired, houses are sold and any children are relocated to new school in the region. Citadel founder Ken Griffin represents one such chief executive relocating his own and his company’s operations down to South Florida in recent months.

Inflation and population migration are both top of mind for Moss and Targa heading into future months, as well as sourcing land in a market such as South Florida compared with a more plentiful locale such as Dallas. Moss said the firm is also tracking aging housing stock for potential development opportunities down the line.

The firm’s current investment portfolio comprises 1,205 units under construction or acquired, and kicked off with an initial investment in Affiliated Development for workforce housing projects in Palm Beach County. Moss said Targa is not limiting itself to South Florida for opportunities and has eyes on Tampa, Dallas and Hawaii for future projects. The firm maintains construction offices in each locale.