Mandel Group and Cottonwood Communities Announce $600 Million Multifamily Portfolio Merger

Milwaukee-based Mandel Group, Inc. has agreed to merge 13 multifamily properties valued at more than $600 million into Cottonwood Communities, Inc., a Salt Lake City-based, non-traded real estate investment trust focused exclusively on the multifamily sector. The companies announced the transaction on September 4, 2026, with Mandel receiving Cottonwood operating partnership units and cash in exchange for the contributed assets.

The deal extends beyond a straightforward asset transfer. As part of the agreement, Mandel and Cottonwood will also merge their property management platforms, creating a combined management company that will oversee all Mandel assets — including properties not part of this transaction and others currently under development.

Deal Structure and Timeline

Of the 13 properties involved, membership interests in one were already acquired at the end of July. Mergers for the remaining 12 properties are expected to close in the coming months, subject to lender approvals, approval by the members of the property-owning entities, and other closing conditions. Cottonwood's operating partnership, Cottonwood Residential O.P., LP, will prepare and distribute a private placement memorandum containing a consent solicitation for members of the property-owning entities. Additional transaction details were filed in a Current Report on Form 8-K with the SEC on September 4, 2026.

Jones Lang LaSalle Securities, LLC is serving as financial advisor to Mandel on both the portfolio mergers and the property management platform combination. Robert A. Stanger & Co., Inc. is acting as financial advisor to the property-owning entities. DLA Piper LLP (US) is serving as legal counsel to Cottonwood, while Proskauer Rose LLP and Foley & Lardner LLP are acting as legal counsel to the property-owning entities and Mandel.

Post-Transaction Scale for Cottonwood Communities

Upon completion of the transactions, Cottonwood will hold approximately $3.3 billion in total assets, encompassing 13,400 apartments across 16 states and 21 markets. The combined platform will also provide property management services for an additional 2,346 multifamily units beyond its owned portfolio.

Before the transaction, Cottonwood reported a portfolio of $2.7 billion in total assets as of June 30, 2026, comprising 48 multifamily investments operating in 18 U.S. markets and representing more than 12,600 multifamily units, including 11,141 units from operating properties, 198 units from development properties, and 1,307 units associated with structured real estate investments in which Cottonwood does not own the underlying real estate.

Cottonwood's sponsor, Cottonwood Communities Advisors, LLC, together with its affiliates and predecessors, has operated as a multifamily real estate platform since 2004.

Mandel Group Retains Independent Status and Development Pipeline

Following the close of the transactions, Mandel Group will continue to operate as an independent, privately held real estate development and asset management company. The Milwaukee firm will retain ownership and asset management of approximately $900 million in assets and plans to continue pursuing existing and new development opportunities.

Barry Mandel, chairman and CEO of Mandel, will join Cottonwood's advisory board as part of the transaction. All of Mandel's site associates and nearly all of its corporate management group are expected to be retained by the newly merged entity.

"This transaction brings together two organizations with complementary cultures and core values and a shared commitment to acquiring, developing and managing exceptional multifamily communities," Barry Mandel said. "By combining a significant portion of our portfolio and our management operations with Cottonwood, we're creating a platform with greater scale, enhanced operational capabilities and geographic diversity in high growth metropolitan markets."

Daniel Shaeffer, CEO of Cottonwood, characterized the deal as aligned with the REIT's expansion objectives. "This partnership with the Mandel Group accomplishes our objective of growth and expansion in the best possible way," Shaeffer said. "This transaction not only adds high-quality properties to the combined portfolio but also brings many talented and well-trained people to our team. We are delighted about both the financial advantages and the cultural and other intangible benefits these transactions produce for both Cottonwood and Mandel."

Market Context

The transaction comes against a backdrop of tightening conditions in Milwaukee's multifamily market, where vacancy is forecast to fall to 3.6% in 2026 and new completions are projected at roughly 1,050 units — representing only about 0.6% inventory growth. That constrained supply environment supports rent performance and creates conditions in which stabilized assets can be recapitalized or contributed into a larger platform.

In Salt Lake City, where Cottonwood is headquartered, multifamily fundamentals have been more mixed due to elevated supply deliveries. Vacancy stood at 7.3% in the first quarter of 2026, with cap rates around 5.3%, and stabilized occupancy was reported at 94.7% in February 2026. Asking rents were still down 0.4% on a trailing three-month basis as of that period, reflecting a market working through a recent wave of new supply.

Founded in 1991, Mandel Group has developed or transacted more than $2.4 billion of residential and commercial real estate in the Milwaukee metropolitan area and select Midwestern markets. Among its projects are East Pointe, a nine-block redevelopment of a vacant freeway corridor north of Milwaukee's central business district; University Club Tower, a 37-story luxury condominium high-rise on Milwaukee's lakefront; and The North End, a multi-phased mixed-use neighborhood developed on the site of the former US Leather Tannery.

Sources

Mandel Group — Official Announcement, September 4, 2026