REAL ESTATE- CS Capital Management is set to have a final closing in March on its commingled fund, Los Angeles Development Partners. The projected total raise is in the neighborhood of $250m (€193m).
There will be a total of eight or nine pension funds that will be investing in the fund. One potential investor in the fund could be the Los Angeles Fire & Police Pension System.
The investors in the fund are projected to achieve a 14% leveraged IRR. This yield assumes around a four-year holding period. Some assets could he held longer or shorter. The entire life of the fund is seven years.
Bill Chadwick is a managing director with CS Capital. He said, "We think that there are many investors who have an interest in owning real estate in the Los Angeles area. This region is one of the strongest real estate markets in the country. Having Jim Hahn, former mayor of the city, as president of the fund should give us some access to unique transactions."
The investment strategy for the fund is to make equity investments in development projects in the five country area of Los Angeles. The counties it will be investing in are Los Angeles, Orange, Ventura, San Bernardino and Riverside.
A variety of property types will be considered. These would include office buildings, apartments for rent or sale, industrial, mixed-use and hotels.
A typical size deal would be in the range of $50m of gross value. CS Capital figures that the commingled fund could have around 12 assets in it. On the property level, it’s anticipated that the leveraged IRRs will be around 17.5%.
The total capitalization of the fund will be around $750m. This will be achieved by employing 65% leverage.
All of the projects for LA Development Partners will be setup as joint ventures with development partners. These companies will be required to make a co-investment for each project.
LA Development Partners is a follow on commingled fund to Multi-Employer Development Partners. This was a commingled formed several years ago by CS Capital. It had a national development strategy. The total equity raised for the fund was $212.1m.