Spotlight: Cottonwood Communities and Its UPREIT Multifamily Platform

The Utah-based REIT has absorbed two whole operating companies in nine months, paying in operating-partnership units rather than cash.

September 10, 2026

Cottonwood Communities, Inc. is a publicly registered, non-traded, NAV-based perpetual-life REIT that invests only in multifamily. It is externally managed by an affiliate of its sponsor, Cottonwood Communities Advisors, LLC, and holds its assets through the operating partnership Cottonwood Residential O.P., LP, known as CROP. As of June 30, 2026 the firm reports $2.7 billion in total assets and 48 multifamily investments operating in 18 U.S. markets, covering more than 12,600 units — 11,141 in operating properties, 198 in development, and 1,307 tied to structured investments where Cottonwood does not own the underlying real estate.

Recent growth has come from merging entire portfolios, and the companies running them, into that partnership. In December 2025 Cottonwood closed on RealSource Properties, an 11-property, 3,565-unit portfolio, in a stock-for-stock and unit-for-unit transaction the firms valued at approximately $500 million. It extended the footprint into Ohio, Colorado and Kentucky and brought third-party management of five additional properties.

The Mandel merger

On September 2, 2026 CROP signed a series of merger agreements with entities controlled by Barry R. Mandel covering 13 Milwaukee-area properties the companies value at more than $600 million, in exchange for operating partnership units and cash. One property, Park Lafayette Towers, was acquired at the end of July 2026; the remaining twelve are subject to lender approvals and to approval by the members of the property-owning entities. Cottonwood says that once completed the transactions would leave it with $3.3 billion in assets, 13,400 apartments across 16 states and 21 markets, and property management for an additional 2,346 units.

The unit currency is what makes transactions of that shape available. CROP units may be redeemed for cash equal to the value of one Class I common share or, at the company’s election, exchanged one-for-one into Class I stock, and RealSource’s chief executive pointed to tax efficiency for his equity holders in explaining that deal. Cottonwood has used the same currency at property level, issuing CROP units in March 2023 to acquire an additional 45.4% of the tenant-in-common interests in Alpha Mill at a stated value of $19.8 million.

Fees and offerings

At the RealSource closing the advisor reduced its asset management fee from 1.5% of NAV to 1.25%, a cut of 16.7%, and Cottonwood’s executive officers stated an intent to invest an aggregate $3 million, split evenly between Class I common stock or CROP units and Series A convertible preferred stock.

Cottonwood raises equity on three tracks at once: a public common stock offering and two Rule 506(b) preferred placements limited to accredited investors at a $10.00 stated purchase price. The Series A convertible preferred launched in September 2023 and had 13,102,608 shares outstanding as of August 20, 2026, after the company lifted the program ceiling to $200 million from $150 million. The Series 2025 program launched in December 2024 with a $150 million maximum and had 12,231,353 shares outstanding as of August 2, 2026. Preferred stock sold in those private placements accounted for $438.9 million of capital raised as of June 30, 2026, running slightly ahead of what the REIT has raised from common stock across its public offerings.

The operating side

Property management sits inside the company rather than with a third party. Cottonwood traces the platform to 2004 and to funds sponsored by Daniel Shaeffer, Chad Christensen and Gregg Christensen, who together beneficially own roughly 73.5% of the sponsor. In May 2021 the REIT completed mergers with Cottonwood Residential II, Inc. and its operating partnership, combining four portfolios and bringing the affiliated property manager and its employees in-house. Cottonwood Residential, the operating brand, reported integrating 16 communities from the RealSource transaction and puts average on-site associate tenure above five years.

The Mandel transaction extends that pattern to the manager itself. The two property management platforms will merge, and the combined manager is to run all Mandel assets, including properties outside the merger and others under development. Barry Mandel joins Cottonwood’s advisory board, and the firms say Mandel’s site associates and nearly all of its corporate management group will be retained.