UNITED STATES - Pramerica Real Estate Investors has invested capital in a venture designed to jumpstart a new retail development company.

Through a division called Interra Development Partners, Pramerica contributed 95% or $47.5m (€69.4m) of the initial equity in the company while the other 5% or $2.5m came from the founders of the new development company called Interra-Vision Development.

Paul Curcio, principal at Merchant Banking Group of Pramerica, has been working on the project but notes the initial investment by Pramerica extend its funding in the future if the

first round of projects are successful.

Initial capitalization for Interra Development is $250m but this will also gain leverage of 80% on the initial equity investment.

Several projects are already planned for the new company including a 6.7-acre parcel in Sunrise, Ariz which is being turned into a small power centre totalling 78,000 square feet as well as an 85,000 square feet retail property in Florida City costing $25m to develop.

Interra Development is also looking to construct a variety of retail projects including include neighborhood centres, small power centres and build-to-suit properties for tenants such as those seen in Walgreens.

The company is also looking to invest in markets showing strong employment growth such as Northern and Southern California, southeast Florida, Phoenix and the Chicago metropolitan area.

Pramerica made its investment in Interra Development for its commingled fund, the PRECO III, am opportunity which raised a total of $700m last July to invest in either companies or properties.

Investments for the fund are required to achieve leveraged IRRs north of 20%.

One of its pension funds in the commingled fund was the California Public Employees Retirement System with a $100 million commitment.