UNITED STATES - Shorenstein Properties LLC had one of the fastest fundraising periods in recent memory with its latest commingled fund, the Shorenstein Realty Investors Nine.
Around 85% of the investor commitments for the new fund had previously invested with Shorenstein previously and most of the investors in the commingled fund were foundations and college endowments alongside some pension funds and high net worth individuals.
Shorenstein put in $100m of its own capital as a co-investment. But it took the real estate manager around two months to raise $1.3bn ($963.8m euros) for the commingled fund, said Richard Chicotel, Shorenstein’s chief financial officer.
"There are two main reasons for this. We have very loyal investors who have been investing with us for a lone time and believe in our strategy. There are also still many investors who like the asset class of real estate," said Chicotel.
Investors Nine will focus on investing in office buildings and is looking for value-added transactions, many of which will involve some kind of leasing issues. At the same time, there will be some deals in the commingled fund offering mixed-use property with an office building component.
The fund’s strategy is to invest in the major markets of the United States such as New York, Washington, DC, San Francisco, Los Angeles, Boston, Chicago, Seattle and Portland.
This is a blind fund at this stage as there are currently no assets in Investors Nine. But Shorenstein has a four-year investment period to find all of the assets for the fund, intending also to place a 60-65% leverage on the commingled fund.
Shorenstein will be using a variety of investment structures to invest in properties, including a straight purchase of single assets or a portfolio of properties, as well as the use of preferred equity investments, mezzanine loans and structured joint ventures.