While many investors are leery of the multifamily sector, AFL-CIO Building Investment Trust has a different take. The trust — which sees opportunities in America's largest cities, where demand remains strong and projects are hard to build — has launched an initiative to provide $400 million in equity financing for multifamily construction.

The Building Investment Trust, a $1.45 billion comingled fund with about 125 pension-fund investors, including both unions and public pensions funds like CalPERS, doesn't seem to be affected by multifamily's plateau. The fund already devotes 25% of its portfolio to multifamily. “Multifamily remains a desirable asset class, because of its ability to recover based on short-term leases,” says David Keto, COO of the AFL-CIO Investment Trust Corp.

The trust is looking for deals worth at least $25 million, with 75 to 300 units — particularly those with a percentage of low-income housing. Target markets include Baltimore, Miami, New York, Philadelphia, San Francisco and Washington, D.C.

One project that is receiving $34.9 million from the trust is the 388-unit, $109 million Kew Gardens Hills in Queens, N.Y. The complex is a joint venture of New York-based Dermot Co. and the City of New York, and 20% of the units are earmarked for low- and moderate-income renters. In other words, projects that fulfill the trust's wish list still make sense, even if investors must reach to find them.