UNITED STATES - ING Clarion Partners has signed $202m through the capital raising on its latest commingled fund, Clarion Development Ventures III, following support from seven institutional investors, including New York State Teachers Retirement System.
The value-added fund will now take the fundraising and invest it over a three-year period which will hopefully tap market growth once the economy picks up again, according to Doug Bowen, director with ING Clarion and the portfolio manager on the fund.
“We think this commingled fund is timed well for where the marketplace is sitting now. The work being done for either new developments or value-added plays will be completed when the economy starts to turn around,” said Bowen.
The fund - now worth $600m once 60-70% leverage is added - currently holds one asset: a 104,000 square foot office development project in Redmond, Washington which is in pre-leasing stage.
ING Clarion has made a $12m equity investment in the project and around one-third of the space has been pre-leased, including 30,000 sf to Group Health as its regional headquarters.
There is a three-year investment period on Development Ventures III which starts from the first closing on the fund and is being developed to hold a diversified US value-added portfolio, according to Bowen.
“We will be investing in the four main property types and hotels. There also might be some situations where we take a look at buying some land held by distress owners. Another possibility is becoming a new equity partner in an existing partnership.”
Investment transaction size is expected to be between $5m and $35m while projected returns for investors in the commingled fund are a 16-18% net IRR over a three-year holding period.