UNITED STATES - The Jamestown Group is going after the institutional investor capital source for the first time as it teams up with Griffin Realty Advisors to form the Griffin Realty Fund.
Jamestown had previously invested $3bn (€2.2bn) of equity from German individual investors into $8bn worth of US real estate transactions.
Matt Bronfman, managing director for Jamestown said believes the two companies are a good fit.
"It allows us to tap into a new capital source for our company and look at investing in a different kind of real estate. Right now, it's a tough market for investing in core properties," said Bronfman.
Jamestown had, until now, mostly been a buyer of core commercial business district (CBD) real estate, investing in 24-7 cities like San Francisco, New York, Washington, D.C. as well as major metropolitan areas in the Southeast.
But this will change with the Griffin Realty Fund as the companies are looking to invest capital in value-added real estate in US secondary markets seen as being in ‘growth mode'.
Its first project is Cinnamon Shore, a residential project under contract near Corpus Christi, Texas, while there are also three other deals in the pipeline, all involving hotels.
The commingled fund will target a total equity raising of $300m and have access to 65% leverage but both companies will also co-invest 5% of the total equity, raised up to $10m.
Anticipated returns for the commingled fund are a leveraged mid-teens IRR, assuming a 3-5-year holding period.
Hotels and all of the major property types worth $20m to $40m will be considered for investment from both existing properties and new developments, and improved by releasing, redevelopment or repositioning.